Well, Goldman Sachs (GS) and JP Morgan (JPM) are good, Wells Farge (WFC)– not a lot. And Im uncertain I d call JPM “great” as $5.2 Bn of the quarters $14.3 Bn in profit originated from the release of loan reserves that were set aside last year to cover awaited loan defaults. Because the Federal Government threw $6Tn at the economy ever since– it turns out 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 ledger.
I have always challenged Loan Loss Reserve accounting since it enables a bank (and lots of other companies) to take earnings that have currently been declared (and currently moved the stock) out of Cash (showing a loss on demand for taxes, housecleaning, etc) and then back to earnings when they seem like it (to boost the stock rate or save a quarter). Especially for Businesses that are able to redeem their own stock when the cost is depressed due to a loss they deliberately caused and after that, when they wish to offer more stock or take bonuses– they simply re-recognize the revenues on demand. What a fraud!
We were far too conservative with GS when we made it a Top Trade Idea for our Members on October 14th:.
Bank incomes are great..
