I have actually always objected to Loan Loss Reserve accounting due to the fact that it permits a bank (and lots of other companies) to take revenues that have actually currently been stated (and currently moved the stock) out of Cash (revealing a loss on need for taxes, housekeeping, etc) and then back to earnings when they feel like it (to improve the stock rate or save a quarter). Especially for Businesses that are able to buy back their own stock when the price is depressed due to a loss they deliberately triggered and after that, when they desire to offer more stock or take bonus offers– they just re-recognize the profits on need. What a fraud!
Bank earnings are great..
We were far too conservative with GS when we made it a Top Trade Idea for our Members on October 14th:.
Well, Goldman Sachs (GS) and JP Morgan (JPM) are great, Wells Farge (WFC)– not a lot. And Im unsure I d call JPM “excellent” as $5.2 Bn of the quarters $14.3 Bn in profit came from the release of loan reserves that were set aside in 2015 to cover awaited loan defaults. Because the Federal Government tossed $6Tn at the economy since then– it ends up they didnt require the $5.2 Bn to cover bad loans so now the cash (which was constantly in the bank) is relocated to the income side of the journal.
