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Does JPM Stand For "Just Pulling More Muppet'" Wool Over Analyst's Eyes?

Reggie Middleton's picture




 

The latest Q2 qualitative observations for JPM are now available for all paying subscribers to download: JPM June 20 2012 Observations. This document contains a few interesting tidbits that, of course, you will get from nowhere else. For instance, did you know that the Q1 2012 financial results have many hidden secrets? We have looked at the Bank’s Q1 2012 financial results and have the following observations:

  • The Bank reported Q1 2012 revenues of $26.7 billion , an increase of $1.5 billion , or 6% , from the prior-year quarter. That sounds decent for a big bank in tough recessionary times, eh? However, the increase was primarily driven by a $1.1 billion benefit from the Washington Mutual bankruptcy settlement. Excluding this benefit, the revenues were almost the same as that in Q1 2011. With flat revenues like these, just imagine what could happen to the bottom line when a multi-billion dollar trading loss occurs.
  • The Bank had booked a loss on fair value adjustment of Mortgage Service Rights (MSR) in Q1 2011 of $1.1 billion. Hey, you know they just don't make those ephemeral, totally contrived 2nd order derivative products like they used to, eh?

Excluding the effect of the MSR loss along with the impact of gain from Washington Mutual bankruptcy, the bank’s Q1 2012 revenues actually decreased compared to Q1 2011.

Combine these secrets, derivative trading (oops, I mean hedging) losses and that bland ZIRP sauce that sucks profits in an increasingly expensive compensation landscape and you'll get one hell of a safe return for your 401k, right Mr Bove, et. al.? 

From the 2009 BoomBustBlog "I told you so" archives...

To wit regarding JP Morgan, on September 18th 2009 I penned the only true Independent Look into JP Morgan that I know of. It went a little something like this:

Click graph to enlarge

image001.pngimage001.png

Cute graphic above, eh? There is plenty of this in the public preview. When considering the staggering level of derivatives employed by JPM, it is frightening to even consider the fact that the quality of JPM's derivative exposure is even worse than Bear Stearns and Lehman‘s derivative portfolio just prior to their fall. Total net derivative exposure rated below BBB and below for JP Morgan currently stands at 35.4% while the same stood at 17.0% for Bear Stearns (February 2008) and 9.2% for Lehman (May 2008). We all know what happened to Bear Stearns and Lehman Brothers, don't we??? I warned all about Bear Stearns (Is this the Breaking of the Bear?: On Sunday, 27 January 2008) and Lehman ("Is Lehman really a lemming in disguise?": On February 20th, 2008) months before their collapse by taking a close, unbiased look at their balance sheet. Both of these companies were rated investment grade at the time, just like "you know who". Now, I am not saying JPM is about to collapse, since it is one of the anointed ones chosen by the government and guaranteed not to fail - unlike Bear Stearns and Lehman Brothers, and it is (after all) investment grade rated. Who would you put your faith in, the big ratings agencies or your favorite blogger? Then again, if it acts like a duck, walks like a duck, and quacks like a duck, is it a chicken??? I'll leave the rest up for my readers to decide. 

This public preview is the culmination of several investigative posts that I have made that have led me to look more closely into the big money center banks. It all started with a hunch that JPM wasn't marking their WaMu portfolio acquisition accurately to market prices (see Is JP Morgan Taking Realistic Marks on its WaMu Portfolio Purchase? Doubtful! ), which would very well have rendered them insolvent...

... You can download the public preview here. If you find it to be of interest or insightful, feel free to distribute it (intact) as you wish. JPM Public Excerpt of Forensic Analysis Subscription JPM Public Excerpt of Forensic Analysis Subscription 2009-09-18 00:56:22 488.64 Kb

Recent Articles on JPM

Who Will Be The Next JPM? Simply Review The BoomBustBlog Archives For The Answer

Who Caused JP Morgan's Big Derivative Bust? The Shocker - Ben Bernanke!!!

 

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Thu, 06/21/2012 - 19:11 | 2549104 strangeglove
strangeglove's picture

When JPM goes USGovt goes!

Thu, 06/21/2012 - 16:59 | 2548776 mt paul
mt paul's picture

muppets don't like squid...

Thu, 06/21/2012 - 18:03 | 2548950 EverythingFubar
EverythingFubar's picture

Except the many muppets enthralled by the vampire squid..

Thu, 06/21/2012 - 16:00 | 2548483 Sleepless Knight
Sleepless Knight's picture

Just Pork Muppets, or

Just Porking Muppets

Thu, 06/21/2012 - 16:19 | 2548612 Plymster
Plymster's picture

Just Phisting Muppets?

Fri, 06/22/2012 - 14:31 | 2548705 Conax
Conax's picture

 oops

Thu, 06/21/2012 - 15:12 | 2548292 No Euros please...
No Euros please we're British's picture

But, but what about the profits from their silver and gold manipulation? Or do the Fed pay them off book?

Thu, 06/21/2012 - 13:52 | 2547963 dlmaniac
dlmaniac's picture

Just Plain Mafia

Thu, 06/21/2012 - 14:47 | 2548178 Carl Spackler
Carl Spackler's picture

As usual, strong points you do make Reggie.

We need more REAL Analysts like yourself, as opposed to the muppets that like to show up on CNBC to hear themselves talk. 

(All one needs to do is listen to a Jamie Dimon earnings call when he answers analyst questions...to appreciate the brevity of the issue.  They're his lap dogs, and they bow to him, toss out "softball" questions or ask totally mindless interrogatives in order to hear themselves talk.  And to think, our business schools produce this kind of lowly garbage while charging $50M to $75M a year! That's called POOR ROI.)

 

 

Thu, 06/21/2012 - 13:49 | 2547945 Commander Cody
Commander Cody's picture

JPM: A turd what dropped out of a tall cow's ass.

Billy Clyde Puckett - Semi-Tough

Thu, 06/21/2012 - 12:51 | 2547697 RealFinney
RealFinney's picture

Jamie "Pwns" Muppets?

Thu, 06/21/2012 - 14:27 | 2548113 sgt_doom
sgt_doom's picture

Not being snarky here, but personally I always believed it stood for the American Triad:

Rockefeller---Kissinger---Peterson

David Rockefeller and Henry Kissinger and Peter G. Peterson (although I'm sure there's a bunch of Morgan money in there somewhere).

Thu, 06/21/2012 - 12:45 | 2547650 falak pema
falak pema's picture

the Jamie Dimon hearings were a disgrace they let him get away with murder! 

"we only have derivative positions to protect widows and retirees" lol!

Thu, 06/21/2012 - 12:38 | 2547632 tony bonn
tony bonn's picture

"....Then again, if it acts like a duck, walks like a duck, and quacks like a duck, is it a chicken??? ...?

does it fuck like a duck?

Thu, 06/21/2012 - 12:34 | 2547620 covert
covert's picture

nope, more muppets forever.

http://covert.ias3.com/expose/

 

Thu, 06/21/2012 - 12:34 | 2547616 Benjamin Glutton
Benjamin Glutton's picture

Jerks Printing Money

Thu, 06/21/2012 - 12:22 | 2547579 NotApplicable
NotApplicable's picture

 

Why hasn't anyone realized that JPM actually had negative revenue growth despite muppet maven analyst proclamations of the contrary?

Because it's a criminal syndicate masquerading as a financial services entity?

Thu, 06/21/2012 - 19:00 | 2549062 anonnn
anonnn's picture

(repeated}

It is the 1215 document, Magna Carta that gave us Due Process.

Wikipedia:"In clause 39 of the Magna Carta, John of England promised as follows:

"No free man shall be seized or imprisoned, or stripped of his rights or possessions, or outlawed or exiled, or deprived of his standing in any other way, nor will we proceed with force against him, or send others to do so, except by the lawful judgment of his equals or by the law of the land."

Magna Carta, Due Process, Habeus Corpus have been nullified and laid waste. In my lifetime.

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