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| User Info | JP Morgan Earnings: Mirage? in forum [Ticker] | |||
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Genesis Posts: 71432 Incept: 2007-06-26 
KD^2 
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http://market-ticker.org/archives/1522-J....
---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2009-10-20 08:38:54
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Judgesmales Posts: 1962 Incept: 2008-02-05 
Las Vegas
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Cash deposits at JPM are down 10 percent from Sept. 2008 to Sept. 2009. Excellent! If you've been starving the beast, keep going! If you haven't begun starving the beast, get going! I figure another 20 percent off of JPM's cash deposits ought to force them to unwind so much of their leverage, they'll cease to be a going concern. That's assuming they're even a going concern at the moment. ---------- "The tradition of Festivus begins with the Airing of Grievances. I got a lot of problems with you people! And now, you're gonna hear about it." -- Frank Constanza "What we obtain too cheap, we esteem too lightly; tis dearness only that gives everything its value." -- Thomas Paine Last modified:
2009-10-20 08:58:43 by judgesmales
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Psquared Posts: 997 Incept: 2008-10-11 SE USA
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My greatest fear is that "common sense" (or cents) no longer matters in the present state of the economy. Wishing it were so is now actually making it so; or at least making it appear that way. It is like the Fed got a new Visa card in the mail from Chase with a 10 trillion dollar LOC. It also reminds me of the month or so following 9/11 when Americans were told to go out and spend, spend, spend - to support their country and out of patriotism. This stock market has become just that. I have been out of the market for the most part since January 2008. I've jumped in a few times for quick trades, but I put nothing back in this past March so I've missed the 55% runup. (Kick me!! But then, who knew?) JPM, GS, C, and the Fed obviously have not missed it. So do these paper profits REALLY mean anything? It is safe to go back in the water? Are earnings actually catching up with valuations? I don't know the answer, but I know two things: First, I am not getting into the market now unless it is a quick trade; and Second, if I had gotten into the market in March of this year I would be looking for the exit. Bottom line, with all these fed facilities in the background who can (or should) trust reported earnings for financials? Need to take a look at CAT's earnings, but I suspect they are the result of cost-cutting (i.e., layoffs) and not organic growth. ---------- I have money, therefore I exist. Last modified:
2009-10-20 09:08:30 by psquared
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Psquared Posts: 997 Incept: 2008-10-11 SE USA
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Judge, you are assuming the Fed won't prop them up. They have so far and they will continue to do so. JPM is the linchpin of fraud in our financial system. As goes JPM, so goes the US economy.
---------- I have money, therefore I exist.
2009-10-20 09:12:55
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Snowman Posts: 1040 Incept: 2009-03-09 
avoiding yellow snow
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It should be getting easier for JPM to produce their numbers. It can save them some costs. For instance, the don't to publish a leverage ratio. Because they don't have one.
2009-10-20 09:39:24
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Cjworkman Posts: 5615 Incept: 2007-08-22
Online
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is money set aside for re-purchase of the reverse repo's? in other words... what happens when JPM keeps using reverse repo's to bolster it's cash position that keeps shrinking and then has to buy them back? ---------- Ben is going to create an equity bubble from excess liquidity that tops at 1200... and bottoms at 300. A bubble inside of bearish economic conditions, so that it never reaches new market highs and crashes far below the lows. - me
2009-10-20 11:26:10
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Financeguy Posts: 4946 Incept: 2007-08-10
Charlotte
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The sad fact of the matter is the accounting is so far from economic or cash flow reality it is really hard to say for sure what is driving this. Mortgage Servicing could certainly be a big culprit as could any other asset class that is being carried at whatever value and no longer generating cash flow. One of the big problems for these banks is that assets are going directly to non-accrual in many cases without so much as a missed payment. As individuals and businesses run out of cash to service debt this will ripple through to the banks.... ---------- "Granted, if you are not into Barbara Streisand and creme brulee, South Beach could be a tad lonely." Eleua
2009-10-20 15:20:36
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Light Posts: 9 Incept: 2008-04-07 UK
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Servicer Advances only have to be made if they are "deemed recoverable" by the servicer. This "deeming recoverable" is completely at the discretion of the servicer.
2009-10-20 16:00:49
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Genesis Posts: 71432 Incept: 2007-06-26
KD^2
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Once they're "deemed not recoverable" then the asset has to be marked down to recovery value!
---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2009-10-20 16:02:04
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Light Posts: 9 Incept: 2008-04-07 UK
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Servicer doesn't normally own the asset. The asset may be held in a mortgage backed securitisation. The securitisation doesn't need to mark to market. Interestingly, the servicers often own the junior interest in the MBS and the value of these would be affected. Given how there are very low observable prices for investment grade tranches these would already have been written down close to zero.
2009-10-20 16:07:56
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Genesis Posts: 71432 Incept: 2007-06-26
KD^2
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Quote:Given how there are very low observable prices for investment grade tranches these would already have been written down Hahahahahahahahaa..... Yeah, all those second lines that are ON BALANCE SHEET. You're forgetting those. Once the first is declared "unlikely" the 2nd, if the 1st is for more than the current market value of the property, has to be marked down to ZERO. ---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2009-10-20 16:09:57
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Thelight Posts: 10 Incept: 2009-09-06
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Karl when I view the JPM data and look at the upper management announcements and profit numbers, it looks like a classic Pump and Dump scheme, although I am not sure what they would want to dump? Anyway, it does not look like a long term strategy on the part of upper management. More like the classic Private Equity gouge before exit stage right. To me, the tone of your comments implies responsibility in understanding managements actions, that perhaps there is a long term plan. However, what if they know that the balance sheet risks going forward do not warrant a long term involvement, in light of data that show they will be out of cash by the end of 2010, unless there is a miracle in the US economy. Your thoughts?
2009-10-22 15:12:57
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