Dick Bove Says Chance Of Double Dip Is Now 40-60%, Butchers JPM Earnings And Jamie Dimon

Tyler Durden's picture

Something is rotten in the state of Rochdale. One of the most bullish banking analysts ever, Dick Bove, just crucified not only JP Morgan's earnings report, but also said Jamie Dimon "missed it completely on housing", and lastly, has turned extremely bearish on the overall economy, saying there is a 40-60% chance for a double dip, which at last check is probably more bearish than David Rosenberg. Bove throws up all over JPM "good" results, stating it is all a function of loan loss reductions, which the bank is in no way entitled to take at this point, when there is so much negative macro data piling up. As NPLs are likely to continue deteriorating in the future, should the economy weaken further, JPM would have to not only replenish existing accounting gimmicks such as boosting Net Income via balance sheet trickery, but to put even more cash to preserve a viable capitalization ratio. As Bove is the quintessential contrarian indicator, we are preparing for a month long sabbatical to a Buddhist monastery in Tibet to thoroughly reevaluate our perspectives on the universe.

Bove asks: "if the economy is going to expand, how is it going to expand when the money supply is shrinking. If you can't come away with a strong feeling that this economy can plough right through a decline in money supply and continue to grow, then you better not be reducing reserves by $1.5Bn in a particular quarter." On the economy: "There is a "40-60% shot we are going to double dip. If they can't get money supply to turn around and go up there is a very high probability we double dip." The reason: "The Fed has lost total control of money supply and it's in the hand of the banks. The banks make money supply going up by lending money. If you want to force the banks to increase their capital ratios, they can't increase their loans. If they don't increase their loans, you don't get an increase in the money supply. If you don't get an increase in the money supply, it is very difficult to see how the economy can be robust going forward." And some shockingly harsh words on Jamie Dimon: "I would say Jamie Dimon missed it completely on housing. If you look at his housing loan losses there is no indication whatsoever that JPM understood what was going on in the housing market. If you look at the numbers today, the loan losses on prime mortgages are still going up. To assume that Jamie Dimon understood what was going on in housing would be totally contrary to what happened." His conclusion on JPM: "I think JPM took reserves down too dramatically given the fact that we do not have a clear picture where this economy is going to be on December 31 of this year."


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E pluribus unum's picture

Must be time to go long the TBTF

HEHEHE's picture

Seriously, why of all the people in the finance industry does this little mole looking twit get a microphone put in his face every week?  You can't have a double dip if you never left the Depression in the first place.

traderjoe's picture

Because he's been bullish throughout - and makes statements like 'C going to $12'. 

It will be interesting to see if he makes it back on CNBS soon...or if his privileges have been revoked. 

CNBS in full hopium mode today. 

francis_sawyer's picture

Is there a bigger tool on the planet than Dick Bove?

slippery johnny's picture

More pump for QE2.  Getting pretty loud out there.  Do you think anyone is listening.

ZeroPower's picture

How could this tool flip on a dime and now be bearish all of a sudden?

Re JPM, i listened to the c.c (just q&a as the beginning is always bs) and the JPM people seemed a bit shaky with their responses...

nmewn's picture

"and the JPM people seemed a bit shaky with their responses"

Maybe borrowing silver at market rates has them...ummm...distressed ;-)


Oh regional Indian's picture

Truth is beginning to dribble out all around.

When Permabulls turn bearish, is that a bearish sign, or in these crazy times, a bullish one?

Hard to tell.

And this double-dip name makes it sounds like a bun or a biscuit we are speaking of. Should call it what it is.

First leg of the real DEPRESSION has begun.

I think we will start hearing that word even as early as August first week, if the next two weeks prove out what the signs have been saying.....



Traianus Augustus's picture

Dickie B shovelin the shit.

lizzy36's picture

I am willing to bet (net worth) that the over/under on ones stay at said monastery is 2 hours.  I will take under.

mephisto's picture

I'm trying to figure out if everyone here was junked by Jamie Dimon, Dick Bove, or Tyler for that comment.

Boilermaker's picture

Why do I always feel like I have to take a shower after listening to that guy? 

CPL's picture

Yeah he's like a creepy pedo santa.

Fish Gone Bad's picture

Perhaps Dick has found a conscious, and then again, perhaps not.  It is really hard to be un-labeled as a sell-out and apologist for the banks.

Commander Cody's picture

I listened to the interview.  It wasn't clear because he got cut off at the end, but I'd swear that he said he has a buy recommendation on JPM.  ?

CPL's picture

He stands by his decision of a rock solid maybe and perhaps.

Boilermaker's picture

I'm guessing that he also reserves the right to change him mind...tomorrow...or by the closing bell...or by lunchtime.

Arius's picture


does it really matter?

Cognitive Dissonance's picture

Bove was cut off abruptly but Becky "Is my back straight" Quick was ....um....quick to remind Joe Kernan that he had a "buy" recommendation on JPM, which surprised the hell out of Joe "I'll die before I change my view on anything" Kernan.

Turd Ferguson's picture

DoucheBag Top 5:

1) Krugman

2) Liesman

3) Pisani

4) Bove

5) Roubini

Please feel free to amend/add to list.

CPL's picture

6) CNBC..FAUX news...MSM in general

Boilermaker's picture

Who is the crazy uber-nerd looking perma bull that Kudlow has on frequently...serious, the guy looks like the nerd from the Simpsons...

That guy is over-the-top-and-into-orbit douchey...(Sp?)

traderjoe's picture

Paulson - the money manager guy from Minnesota

Luvornia (spelling?) from DB

Doll from Blackrock

The shill from MS that has the squeaky voice

Sudden Debt's picture

It used to be 50/50 a month ago! Hughe bullish BUY signal! :)

jmf's picture

Moin from Germany,

must be a reason why he has only a BUY and not a STRONG BUY on JPM.... ;-)


Arius's picture

interesting comment on the Fed loosing control of the money supply....bring the Maestro back!

one can hear the cracks in the damn.....

replacing the canary in the coal mine with a fake one doesnt change the fact that deadly fumes are coming out....it will only make sure more miners will be killed...yes, on the positive side one will get a few more hours of coal production because the miners will not be warned and get out in time....is it really worth it??? well...it all depends...we are about to fnd out soon...

Blues Traveler's picture

Jaime Dimond should be charged with racketerring, extortion and tax evaison....then serve justice Utah style.

b_thunder's picture

yes, he absolutely shoud be.

however,  in a few months you will likely hear the following:

"I am pleased to introduce the new secretary of the Treasury, MR. DIMON"


we had Hank, right in time for the TARP.  we're going to have Dimon, just in time for TARP 2.0, b/c we all know that the original TARP was such a success for the too-big to fail banks!


Oso's picture

absolutely audacious that they have the gall to release reserves.  think about how bad everyone else is if JPM needs to do this to meet numbers.


market feels like its being supported unnaturally again, the empire and philly fed numbers should be causing a lot larger down move.

Commander Cody's picture

Its called levitation.  Any decent magician can do it!

Cognitive Dissonance's picture

"Its called levitation." 

I always get a chuckle when I hear or see the commercial for "Levitra" which immediately brings to mind levitation. You just know the marketing guys, who are the people who actually give any new drug it's commercial street name, were laughing when they came "up" with this name.


John McCloy's picture

  Well they are nearly out of suckers to participate in the markets Oso so they release the reserves. I cannot believe the "premier minds in finance" are follish enough not to see how terrible the fundamentals are becoming even with mark to unicorns. HELOCs and Prime mortgages are just beginning their taint and this is a last push to keep the eps up as in order to pay quarterly bonuses.

Meanwhile they deleverage into quarter close..repo it up to make it look they are not leveraged a trillion to 1 so they can squeeze every ounce of profits out of their trading and then resume to ramps after the earnings report which is why we saw the ramps right after quarter close. The efforts are yielding less profits and becoming more risky as the data really heads off a cliff so I take solace in that. 

They are however exposing how weak they are to a market pullback since their trading revenues were down about 44% since past quarter. I am sure Ben feels is not liking them just holding onto this money for reserve and paying it out to themselves while lending since it is killing his credibility of any recovery.

b_thunder's picture

this is a very simple plan:

1) reduce loss reserves, which inflates "paper" profits

2) use "paper" profits to pay real bonuses. But hurry, because the "paper" profits may not last

3) right before s**t hits the fan,  move Dimon to the Treasury (just as Goldman did with Hank)

4)  as s**t is hitting the fan, get TARP 2.0 from Dimon and QE 2.0 from Uncle Ben

5) goto step 1


btw,  Lehman, Merrill and Bear bought tens of bullions worth of their own stock in 2H 2007, right as the market peaked.  the sellers (mostly insiders) greatly benefitted from that. the rest of the shareholders, employees and the public - not so much...


Cleanclog's picture

I was thinking the same thing . . . and then along came your post.  Absolutely believe reduced reserves are to take care of business (compensation for special bankers and execs) today anticipating another bailout down the road.  

I have on very good authority that regulators conducting regularly scheduled audits are making community and regional banks up their loan loss reserves big time, and scheduling more frequent call backs and reviews.  The JPM story doesn't add up logically.

Gimp's picture

Ever noticed that when these companies announce a "stock buy back" that they rarely do and if they do it is a tenth of what they initially announced.

Maybe they will say anything to move the market?

I am on to something.

chancee's picture

Weak attempt by Kernen to get Bove to say something positive about JPM at the end of the interview FAILS.  By feigning 'hurt' by what Bove had to say and then hitting him with the 'Harley jab', he was surely expecting some back peddeling.  Which of course, sucker that he is, Bove fell for and hurried to say that 'he does have a BUY rating on the stock.'

jesusonline's picture

Bove is never gonna recover from his Lehman legacy. That's why you take him with a ton of salt everytime he opens his mouth.

THE DORK OF CORK's picture

In a nutshell that is what is wrong with the world economy - we have to build more houses to increase the money supply or is it the other way round.

Whether it is the chicken or egg - increased consumption = increased wealth in these bozos eyes.

A simple message from Dork - increased consumption is ultimately a function of energy supply.

If most of the money created goes to consumption eventually it will hit a energy wall.

If you want long term growth from this point you will have to starve consumption in the short term and redirect this surplus to viable energy investments.

Everything else is just mindless noise.

PS. transferring the surplus from one consumption class to the another such as what happened in the 80s will not work this time - this surplus will have to be invested on wise projects or else the whole western civilisation thingy if there ever was such a entity is Kaput.

Red Neck Repugnicant's picture

I tell you what, that shirt is really spectacular! Butterscotch with a white collar? Jesus Christ.  

He looks like a middle-management representative for a butterscotch factory.  

DosZap's picture

Fed is already talking about  QE 2.0, even while they are talking about removing stimulus.

They have lost it completely.

Commander Cody's picture

How can you lose what you never had?

jdrose1985's picture

The Fed is totally irrelevant at this point as they have succeeded in building the bridge to nowhere. Well they are out of building blocks now. The bond market and some very pissed off citizens are calling the shots in DC now.

LeBalance's picture


Last time I checked the FED and the Owners hadn't used very much in their arsenal yet.

No massive flame thrower QE (on the way), massive eco-disaster (just one, so far), no recent false flag (unless you count GoM, which us tin foilers do.), power plant failures, hurricanes, earthquakes, oh the list is loooooong.

"The Fed is totally Relevant."  They are the heads of this receivership, the shots being called by the Owners in Europe and parts elsewhere.

Glad you at least put a lower case on "citizens" as we are chattel.  Calling the shots? /giggle/

NotApplicable's picture

You're kidding, right?

I keep waiting for the so-called bond "market" to rise up and bitch-slap fedgov for its transgressions, but what do I see but the fabled "flight to safety," and its near record low yields.

At this point, the Fed IS the bond market, the stock market, the repo market, the Forex market, the MBS market, ad infinitum.

The only shots being called by pissed off "citizens" are along the lines of "Don't Taze me bro!"

Rainman's picture

The mark-to-myth carnage has long legs. Forget about organic revenue. The banksters believe they can hold off a FASB fair value challenge forever. They will pay off all necessary parties to keep their own bonus party going as long as possible.

No one should underestimate their ability to continue the game.