Well, Goldman Sachs (GS) and JP Morgan (JPM) are great, Wells Farge (WFC)– not so much. And Im not exactly sure I d call JPM “good” as $5.2 Bn of the quarters $14.3 Bn in earnings originated from the release of loan reserves that were reserved last year to cover expected loan defaults. Since the Federal Government tossed $6Tn at the economy given that then– it turns out they didnt need the $5.2 Bn to cover bad loans so now the money (which was constantly in the bank) is moved to the earnings side of the ledger.
We were far too conservative with GS when we made it a Top Trade Idea for our Members on October 14th:.
Bank revenues are great..
I have always challenged Loan Loss Reserve accounting because it enables a bank (and lots of other business) to take earnings that have actually already been stated (and already moved the stock) out of Cash (revealing a loss as needed for taxes, housecleaning, etc) and then back to profits when they feel like it (to boost the stock price or conserve a quarter). Particularly for Businesses that have the ability to redeem their own stock when the cost is depressed due to a loss they purposely triggered and after that, when they wish to offer more stock or take bonuses– they merely re-recognize the revenues on need. What a rip-off!
