JPMorgan: "You Are Seeing Several Hundred Additional Smaller Regional Based Banks Go"

From the JPM Earnings call (full transcript below as we comb through it - numerous interesting datapoints):

Meredith Whitney: Will you comment on the last question timing of commercial real estate, if it's been waiting and when do you think it affects the industry? Do you have derivative exposure, meaning derivative to someone else's real estate exposure?

Answer: We have lending exposure that I mentioned in the commercial bank. That was some in the investment bank. We wouldn't put those in the material kind of category and it makes us nervous and commercial real estate and the values have already dropped, and it's going to be recognize over the next couple of years of people's P&Ls and take writedowns and can't refinance properties and stuff like that we believe you are seeing several hundred additional smaller regional based banks go-- you know, not make it and there's also going to be a lot of capital eventually coming into the real estate business and people try to recapitalize and buy properties at good cap rates. It could be an opportunity for us. Not a negative over time.

Also some observations on JPM's declining VaR:

Mike Mayo: Can you give any more color on your trading which is a lot greater than I think a lot of people expected? Your trading revenues are flattish linked quarter, but your trades assets are down and VAR is down. Is all your trading benefit through client flows and wider bid spreads? What is going on there?

Answer: VAR is a good one-point measure but VAR is going down because you are dropping off some of the more volatile time periods in the series, but the trading was drawn across most areas. There's a lot of client flow and spreads are still higher than they were at the bottom. So they're not near as high as they were after the crisis, but they're coming down a little bit. A lot of very good client business and something to train around them.

Full Transcript below:

 

And full Earnings Presentation and Supplement:

 

And here is Goldman's preliminary read on JPM's results:

Learning From JP Morgan