So what we have at JPM is a huge “beat” as earnings were forecasted to be $3.10 per $154 share for the quarter and now its $4.50– almost 50% higher than predicted. Even if we presume the bank returns to “regular” $8Bn quarters, were still taking a look at a $40Bn year and you can purchase the whole bank for $473Bn– okay. We currently have Goldman Sachs (GS) in our Long-Term Portfolio (LTP) so were not going to include JPM and GS likewise knocked it out of the park. We were worried about JPM since they have ordinary banking (chase) and we didnt count on those stimulus checks to produce so much company but they did– mainly since the Government wired the cash to your bank and didnt just send you a check to invest. 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 good, Wells Farge (WFC)– not a lot. And Im not sure I d call JPM “good” as $5.2 Bn of the quarters $14.3 Bn in revenue came from the release of loan reserves that were set aside last year to cover awaited loan defaults. Since the Federal Government tossed $6Tn at the economy ever since– it ends up they didnt need the $5.2 Bn to cover bad loans so now the cash (which was constantly in the bank) is transferred to the income side of the ledger.
I have actually always challenged Loan Loss Reserve accounting since it enables a bank (and numerous other business) to take profits that have actually currently been stated (and currently moved the stock) out of Cash (showing a loss on demand for taxes, housekeeping, etc) and then back to revenues when they seem like it (to enhance the stock rate or conserve a quarter). Especially for Businesses that have the ability to redeem their own stock when the rate is depressed due to a loss they intentionally caused and then, when they want to offer more stock or take benefits– they just re-recognize the revenues on need. What a fraud!
Bank revenues are good..
