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Fed Gives 14 Of 18 Banks Green Light To Pay Shareholders; Goldman, JPM Get Special Treatment

Tyler Durden's picture




 

The financials ETF XLF surged to its highest since October 2008 today ahead of the second part of the terribly dire stress test results:

  • FED APPROVES 14 OF 18 BANKS' CAPITAL PLANS WITHOUT CONDITIONS

But...

  • GOLDMAN, JPMORGAN PLANS GRANTED 'CONDITIONAL' APPROVAL BY FED
  • GOLDMAN, JPMORGAN MUST RESUBMIT CAPITAL PLANS BY END Q3: FED
  • GOLDMAN, JPMORGAN FACE REJECTION IF WEAKNESSES NOT FIXED: FED
  • BB&T CAPITAL PLAN REJECTED AS FED CITES `QUALITATIVE' CONCERNS
  • ALLY CAPITAL PLAN REJECTED AS FED SEES FIRM BELOW MIN TARGETS

Visually:

The part that most are paying attention to:

The Federal Reserve did not object to the capital plans of The Goldman Sachs Group, Inc. and JPMorgan Chase & Co., which are both listed in the “Conditional non-objection to capital plan” column. However, each of these BHCs exhibited weaknesses in its capital plan or capital planning process that were significant enough to require immediate attention, even though those weaknesses do not undermine the quantitative results of the stress tests for that firm or the overall reliability of the firm’s capital planning process. As a condition of the Federal Reserve’s non-objection to their capital plans, each of these BHCs is required to remediate immediately the weaknesses identified in its capital plan and capital planning process and to resubmit a capital plan to the Federal Reserve by the end of the third quarter of 2013. Failure to remediate these weaknesses adequately by the time of resubmission would be grounds for objecting to the capital plans and planned capital distributions.

The immediate result is stocks down:

Of course, the irony is that all that matters is what approval Goldman and JPM have given to the Fed. But for the purpose of theatrics let's play along. And don't forget - BTFD.

 

Dividends & Buybacks:

JPMorgan - Conditional REMEMBER!!

$6 Billion Equity Repurchase
$0.38 Quarterly Per Share Common Stock Dividend Effective Second Quarter
Between April 1 2013 and March 31 2014

BofA - Unconditional

*BOFA TO BUY BACK UP TO $5B SHARES, REDEEM $5.5B PREFERREDS

No Dividend Boost

Citi - Unconditional

*CITIGROUP PLANS TO BUY BACK UP TO $1.2B SHRS :C US

*CITIGROUP PLANS TO MAINTAIN 1C/SHR QTR DIV :C US

Goldman Sachs - Conditional

Nothing yet...

 

Full report below:

 

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Thu, 03/14/2013 - 16:38 | 3330648 CClarity
CClarity's picture

Everyone feel better?  Banks are deemed solid, safe, and able to carry on in the tradition of the early 2000s.  Please resume the tepid low volume rise in S&P tomorrow so we can hit that record, get it over with, and pop this damn bubble!

Thu, 03/14/2013 - 16:41 | 3330655 McMolotov
McMolotov's picture

Like I said sometime last week, we've entered the stage of the game where the major players will steal everything that's not tied down.

Thu, 03/14/2013 - 16:45 | 3330676 camaro68ss
camaro68ss's picture

45 billion dollars to the banks a month and you cant get all 18 banks to pass! your a F*** up bernake!

QE5 here we come.

Thu, 03/14/2013 - 16:58 | 3330709 NotApplicable
NotApplicable's picture

No love for Ally?

Now how they gonna move all those cars?

Thu, 03/14/2013 - 18:05 | 3330905 johngaltfla
johngaltfla's picture

Buy MOAR Volts.

Thu, 03/14/2013 - 16:46 | 3330677 jaap
jaap's picture

Those banks own the FED... smells a bit fishy, I must say

Thu, 03/14/2013 - 16:51 | 3330692 Dr. Richard Head
Dr. Richard Head's picture

Special consideration.......hmmmmmmmm........you don't say!

Thu, 03/14/2013 - 17:14 | 3330743 Rainman
Rainman's picture

Funniest thing about all this is the Fed pretends it's the police and the banks pretend they are being policed. Reminds me of Capone and his relationship with the paid off Chicago coppers.

Thu, 03/14/2013 - 17:21 | 3330764 Ness.
Ness.'s picture

Whoa - wait just one minute... I never took money from Capone.  But I agree with the rest of your post.

Thu, 03/14/2013 - 18:30 | 3331006 Dr. Richard Head
Dr. Richard Head's picture

The New York piggies took it from Dimon. Pigs of a tail or something like that.

Thu, 03/14/2013 - 16:39 | 3330649 JPM Hater001
JPM Hater001's picture

I failed my stress test.

Helping my 6th grade daughter with math.

Totally lost it on bernanke.  I was using his math tables.

Thu, 03/14/2013 - 16:40 | 3330651 sampo
sampo's picture

Someone please dig this buried dog up for me..

Fed's not gonna leave their overlords out of the party, are they?

Thu, 03/14/2013 - 16:41 | 3330657 helping_friendl...
helping_friendly_book's picture

It's not a bubble.

We are turning Japanese and we are turning japanese and well I think so da,da,da,da,da,da,da,da.

Thu, 03/14/2013 - 16:44 | 3330668 zebra
zebra's picture

really? so we can have sushi everyday?!!

Thu, 03/14/2013 - 16:50 | 3330684 helping_friendl...
helping_friendly_book's picture

I am going to try and make a market in the evasive snake head fish to sushi restaurants. I saw the weird food guy with fisherman spearing the snake head fish on the Potomac. 

I,ll bet they are delicious with a little wasabi and some hot sake.

Who can afford tuna, other than bankers, anymore?

We should eat the bankers, but we need to get them really lean with a period of slave labor first.

Thu, 03/14/2013 - 16:51 | 3330691 ziggy59
ziggy59's picture

No Fukishima Rolls for me, thankyou
The banksters can eat them and die..

Thu, 03/14/2013 - 16:41 | 3330661 PontifexMaximus
PontifexMaximus's picture

No-brainer, liquidity is a human right!

Thu, 03/14/2013 - 17:09 | 3330663 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

More deflection. Make it look like you are not giving them preferential treatment. I bet Benny boy, Blankenstein and Demon are all giggling like school girls thinking we are a bunch of rubes that actually buy this b.s.

I'm telling you this is just cover for them to start syphoning that excess liquidity out of the market to pay down that 1/3rd percentage of all marketable US debt coming due over the next 24 months. You watch and see JPM and GS balance sheets increase first then drop or some combination of along with that same amount of $ value drop in the market will coincide with payments due on upcoming marketable debt. This news is just the primer to get everyone ready for the excuse when the theft happens.

How they move it or where it is hidden in the market I have no idea but if I was a betting man I'd say it is hidden in derivative trades.

Thu, 03/14/2013 - 16:44 | 3330669 helping_friendl...
helping_friendly_book's picture

And they rail about how well the market is going to lure in retail as counterparties to open their short positions and buy their borrowed shares.......see you at 800.

Thu, 03/14/2013 - 16:45 | 3330672 brusty4
brusty4's picture

Interesting that the former BB&T head, John Allison, has been making the rounds recently blasting the Fed.  I'm sure that's just coincidence...

Thu, 03/14/2013 - 16:59 | 3330716 NotApplicable
NotApplicable's picture

Here, I've never even heard of them. I guess I need to get out more.

Thu, 03/14/2013 - 17:00 | 3330718 Bay of Pigs
Bay of Pigs's picture

Anyone not going along with The Plan will be thrown under the bus where Dimon threw his grandmother years ago for ten bucks.

Thu, 03/14/2013 - 16:44 | 3330673 uno
uno's picture

does that mean JPM and GS get to launder multiple Mexico Drug Cartels profits as opposed to being limited to 1

Thu, 03/14/2013 - 16:47 | 3330680 Bay of Pigs
Bay of Pigs's picture

Crack Up Boom bitchez...

Thu, 03/14/2013 - 16:53 | 3330695 PontifexMaximus
PontifexMaximus's picture

Perfect libretto by the crooks in the FED: anything different than this report woul give me a real headache. The scapegoats are found............and decently paid...........front up! QED

Thu, 03/14/2013 - 16:54 | 3330697 Tsar Pointless
Tsar Pointless's picture

Funny stuff.

Thu, 03/14/2013 - 16:54 | 3330699 Critical Path
Critical Path's picture

Merry early Christmas Jamie: http://www.bloomberg.com/news/2013-03-13/dimon-s-extra-1-4-million-payou...

Dimon's Extra $1.4 Million Payout Hangs on Fed Decision

Thu, 03/14/2013 - 17:01 | 3330719 McMolotov
McMolotov's picture

I saw "Dimon" and "hangs" and got excited for a second.

Thu, 03/14/2013 - 17:25 | 3330774 fuu
fuu's picture

Green Shoots!

Thu, 03/14/2013 - 17:25 | 3330775 Ness.
Ness.'s picture

 

JPMorgan Chase & Co. (JPM) Chief Executive Officer Jamie Dimon sought to hide escalating trading losses that surpassed $6.2 billion by misleading investors and dodging regulators as the bank's position deteriorated last year, a Senate probe found.

The largest U.S. bank “mischaracterized high-risk trading as hedging,” and withheld key information from its primary regulator, sometimes at Dimon’s behest, according to a report today by the Senate Permanent Subcommittee on Investigations. The 301-page document also shows how managers manipulated internal risk models and pressured traders to overvalue their positions in an effort to hide growing losses in a “monstrous” credit derivatives portfolio inLondon.

 

http://www.bloomberg.com/news/2013-03-14/jpmorgan-misled-investors-dodge...

 

Fuck these assholes.

Thu, 03/14/2013 - 17:36 | 3330811 Critical Path
Critical Path's picture

Recieve fine => transfer to clients and shareholders => release PR television campaign proclaiming you value an American "can-do" hard working attitude and are doing what you can to help the economy recover => pay self multi-million dollar bonus => repeat

Thu, 03/14/2013 - 20:42 | 3331314 NoClueSneaker
NoClueSneaker's picture

Yepp, an Ultimate Teaser ....

Dang him , dang him ....

Thu, 03/14/2013 - 16:57 | 3330704 thismarketisrigged
thismarketisrigged's picture

what a mother fucking joke. BAC is up nearly 5 fucking percent, jpm, whose results were not exactly stellar by any means is up almost 2 percent, i just sit back and laugh at this fucking joke.

 

its the only way to handle it. i fucking hope these bankers go fucking broke

Thu, 03/14/2013 - 17:11 | 3330740 q99x2
q99x2's picture

Great boilerplate pdf for creating promotional material.

Thu, 03/14/2013 - 17:11 | 3330744 kevinearick
kevinearick's picture

The empire participants always believe the empire is all-encompassing, no matter what size it is. Warren Buffet is just an actor acting for other actors. What has changed, but the relative size?

http://www.nytimes.com/2013/03/13/business/john-j-byrne-dies-at-80-saved...

Thu, 03/14/2013 - 17:15 | 3330751 pashley1411
pashley1411's picture

The only reason the government doesn't bring the bankers inhouse is that would slow down the campaign contributions and post-"service" employment opportunities.  

JPM and GS are smart operators; they only reason they would "fail" a test given by the government is that they intend to get a special deal out of it.   You know, otherwise, the economy (at 5th Avenue and Cancun) would suffer.   Fckin charade.

Thu, 03/14/2013 - 17:15 | 3330753 philosophers bone
philosophers bone's picture

Still waiting for the class action lawsuit declaring all past dividends paid by the banks since 2008 to be invalid due to insolvency once derivatives are properly marked to market. 

Thu, 03/14/2013 - 17:18 | 3330759 maskone909
maskone909's picture

QUESTION. how is it possible that the dollar is "strengthening"??

Thu, 03/14/2013 - 17:28 | 3330779 maskone909
maskone909's picture

let me rephrase..... how is it possible for the dollar to gain strength- not against another currency- just by itself?

Thu, 03/14/2013 - 19:10 | 3331105 ebworthen
ebworthen's picture

Because the FED is propping the markets, which indirectly props the dollar.

Whatever crap banks bundle and sell, or corporation stocks gain by gutting career employment, is being bought by foreign money, dope Pension funds, and IRA & 401K money that is still trapped in the casino.

The dollar is still the world reserve currency, so not only is FED jizz propping equities but foreign money and domestic slosh.

Of course when that ends the ones left holding the bag will be the 401K & IRA folks, Pensions, and all taxpayers when banks, insurers, and corporations are bailed out YET AGAIN to prevent "a collapse" that was engineered in the first place.

Bubble Part II - the dollar is just along for the ride.

Thu, 03/14/2013 - 17:31 | 3330784 ebworthen
ebworthen's picture

It's worth 25% less than it was four years ago, whereas other currencies are worth 30%-40% less.

Thu, 03/14/2013 - 17:27 | 3330767 ebworthen
ebworthen's picture

Yeah, sure FED, the J.P. Morgue and Goldman Slacks need your approval (when they run you).

So, they need better capital plans so they can get more backdoor money from you at lower rates (0.01% I suppose), eh?

This is pabalum for the sheeple, "Oh look, the FED is being hard on the banks - buy moar stawks!"

The banks are our government; the FED, the CONgress, the D.O.J., and the Judiciary are their lackeys.

I'm still not sure where the military stands, though it appears they are steadily being infiltrated by brown shirts.

Thu, 03/14/2013 - 17:30 | 3330789 maskone909
maskone909's picture

military= collectors for te bank/loan sharks

Thu, 03/14/2013 - 18:24 | 3330992 The Invisible Foot
The Invisible Foot's picture

It's all over everyone, go to sleep now...and BTFD.

Thu, 03/14/2013 - 18:51 | 3331075 Mortimer
Mortimer's picture

let it grow...  just more SKF for everyone.

Thu, 03/14/2013 - 19:37 | 3331147 Fred Garvin
Fred Garvin's picture

 All the perplexities, confusion and distress in America arise, not from defects in their Constitution or Confederation, not from want of honor or virtue, so much as from the downright ignorance of the nature of coin, credit and circulation.

 

 

John Adams

American President, 1735-1826

Thu, 03/14/2013 - 20:47 | 3331328 J Robert Burgoyne
J Robert Burgoyne's picture

Anyone who quotes John Adams is in my corner.

Fri, 03/15/2013 - 00:52 | 3331693 Colonel Klink
Colonel Klink's picture

Excellent quote and SO true!

Thu, 03/14/2013 - 20:53 | 3331262 hooligan2009
hooligan2009's picture

picked this up from the FT

http://www.ft.com/cms/s/0/5caeb196-8ce1-11e2-8ee0-00144feabdc0.html#axzz...

and this from bloomberg

http://www.bloomberg.com/news/2013-03-14/goldman-jpmorgan-ordered-to-fix...

the fed wont disclose it methods for caluclating losses, so Ally (which failed) is having a hissy fit. JPM thought its losses would be a few hundred milllion...the Fed thinks 32 billion..so pretty close then.

what perplexes me is why are the banks rushing to buy back shares and/or increase dividends (even at reduced buy-back amounts)?

surely surely surely the banks should be rebuilding their capital not paying it out..don't retained earnings (profits) count as tier 1 equity or does this mean these banks would have to pay tax on profits?

oh wait...where is the money coming from? the Fed

so the Fed is injecting money into the economy by funding increases capital payments from the banks to the shareholders.

i guess that's alright then..dont the banks all own each other like in any cartel...why else call it the interbank market?

perhaps banks should be banned from lending ot each other...

 

Thu, 03/14/2013 - 21:11 | 3331379 Xrated
Xrated's picture

I just passed my mortgage-underwriting exam at The Bank and am ready to right The Ship.

Warning: You can forget the past, now I will require a proctologist exam for the male and an ob/gyn exam and possible neutering of your wife, and required private night of sex with her, provided she meets my super model standards, and then you must pass our income and asset stress guideline test. (and a 2nd night with me and the wife/GF!

We are no longer in the money losing business, Life Is Good for an Underwriter now days.

 

Fri, 03/15/2013 - 00:57 | 3331697 Colonel Klink
Colonel Klink's picture

Excellent!  Coital underwriting conditions, I can read the marketing now.  We're lending and we give a fuck!

Unfortunately for the customer, they don't realized who the fuckee is and they've already signed on the dotted line by the time they do.  Oy vey!

Sun, 03/17/2013 - 00:12 | 3337235 Nat_Rothschild
Nat_Rothschild's picture

Why does nobody ask these gentlemen bankers where they keep their own money? 'Keep' is indeed the exact word that must be used when questioning alleged 'banksters'. Does anyone know if they 'keep' their own money in the very institutions they operate themselves? If not then why not?  If so then what percentage? Do they even accept the premise that the currency(s) their institutions do business in everyday is actually money or merely a medium to transact business? Ben Bernanke in 2012 when asked by a US Senate banking committee if gold was money his answer astonished most of the world's citizens who were born with a brain. His reply was an incredulous "no" and he went on to clarify further that gold was basically a collector's item brought about by a habit forming tradition.  The better question to have asked Mr. Bernanke would have been: "How much gold do you personally own as you sit before this committee today, Chairman Bernanke?" The same question need be asked of JP Morgan's Jamie Dimon, Goldman's Blankfein and every other executive and board member of every to large to fail financial institution in the US, UK and Europe. I don't believe for a moment that the US is about to collapse. However, I'm quite positive that the Federal Reserve Bank of the United States is on the verge of collapse just as its two predecessor US central banks have. These are my personal views and do not reflect the views of my employer, family or any particular organizations I am currently affiliated with publicly or privately.

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