We were far too conservative with GS when we made it a Top Trade Idea for our Members on October 14th:.
Bank profits are excellent..
I have always challenged Loan Loss Reserve accounting due to the fact that it permits a bank (and lots of other business) to take profits that have already been stated (and already moved the stock) out of Cash (revealing a loss on need for taxes, housekeeping, etc) and then back to earnings when they seem like it (to improve the stock price or save a quarter). Particularly for Businesses that have the ability to purchase back their own stock when the cost is depressed due to a loss they deliberately caused and then, when they desire to offer more stock or take benefits– they just re-recognize the incomes as needed. What a scam!
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 revenue originated from the release of loan reserves that were reserved in 2015 to cover awaited loan defaults. Given That 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 relocated to the earnings side of the journal.
