How Was March a Bad Month?

The major equity averages took a leg lower earlier this afternoon after JP Morgan (JPM) CEO Jamie Dimon and Bank of America (BAC) CEO Ken Lewis told CNBC's Erin Burnett that their March trading was a bit tougher than January and February. Now, we realize that March was a volatile month, but when nearly every asset class went up in price this month, how could March be worse than January or February?

Comments

[logicalthought:]

They had probably shorted their own stock!

Mar 29 08:21 AM

[PNG:]

These "mega banks" like Citi and Bank America need to be up front with people and not paint a picture that isn't.

When they said "we are making a profit" in Jan and Feb, from what I've read, they didn't tell the rest of the story nor did it change their situation with the mortage paper problems. They are just hoping for a accounting change which really doesn't put them in any better position and it would allow them to continue business as usual.

Personally, I believe people should switch to their local Credit Unions and home town banks that operate within their own state.

Mar 29 08:21 AM

[drbob66:]

These guys have proven themselves to be pretty bad traders, IMO. My guess is that they're getting whipsawed by rapidly changing short-term trends (maybe over-relying on computer-algorithm based trading?), and have been net short the market (prevailing long-term trend) for a while now...that was a lucrative stance for trading in Jan & Feb, but not so much in March.

Honestly, does anyone believe that these guys are worth the out-sized compensation that they're accustomed to...given their actual performance over the past few years?

Mar 29 08:52 AM

[BxCapricorn:]

Many of these banks will get some needed income from the next few months of refinancing fees, but then what? Once everyone is sitting in their 4-5% mortgage, still paying an enormous percentage of their take home, towards their mortgage, the banking model with which these guys operate is over. Finance and credit reform will cut down the leveraging percentages and volumes their operations were based on, and until inflation pumps up the underlying value of their mortgage portfolios, they'll just have to avoid takeovers by either the government (stress test failure) or competitors (those with cash).

Mar 29 09:35 AM

[JEFF G:]

The talk was the banks were shorts the market and they had to cover. Ken Lewis said specifically that the "book" wasnt that great

Mar 29 10:57 AM

[JEFF G:]

I must also add that Ken Lewis also slipped and said they would still be profittable. Can't believe nobody picked up on that slip. Should bring BAC to $10 after earnings...

Mar 29 10:59 AM

[Chezfrederick:]

Are we being prepared for their first quarter results being much less positive that they intimated in their February criptic and limited comments on their profitability?

I can only say that I have become very skeptical of anything they say. I must have been naive in the past.

Mar 29 11:04 AM

[cholmley:]

Good god people get your head out of the sand. There is more than one market in the world, US equities are irrelevant for most of the trading banks are involved in.

They are deliberately getting the shorts excited, do not bet against the banks this quarter.

Mar 29 11:32 AM

[doc_hawkins:]

Hmmm
The banks were shorting stocks yet they got protection for shorting last fall.

If you have a gun you can rob a bank
If you have a bank you can rob anything

Mar 29 12:36 PM

[jhuynh:]

could be a trap for shorts to create a big capitulation from Q1 earnings. Noticed they mentioned only "trading" and "still profitable". Plus illiquid asset fair value adjustment, if implemented in Q1, the mtm losses they recognized on "identified" distressed illiquid assets will be reversed. This will do great for their tier1 capital bucket...what a great way for the govt to use accounting to support their quantitative easing cause withing printing hard currency or load up their balance sheet with handouts. Timmy is ready to swing for the fence. There are plenty to lose if USD is being replaced as world reserved currency.....

Mar 29 12:39 PM

[mac.barron:]

"Vikram Pandit’s recent letter to Citi employees was a nicely timed communication to his broader social and political audience. His upbeat note was plausible because he put down some very specific markers, e.g., “best quarter-to-date since 1997″; the danger is that these come back to haunt him."

Indeed. Will any of us be truly shocked if a short time down the road "adjustments" are made to Citi's actual (filed with the S.E.C) quarterly results which will revel that Pandit's letter was just fakery?"

I put that comment in on 22 March and I stand by it today.

Mar 29 01:04 PM

[travisbickle:]

Bottom line, financials are good buy at these levels. Of course, you must be diversified; as my financials go up, my tech, healthcare stocks go down! May be inverse the next day. Ideally, they all move higher on the same day. Mike Paget

Mar 29 02:46 PM

[vvvvviking:]

March was a bad month because they lied about making a profit in Jan and Feb and need a way to cover their butts when their first quarter results are terrible.

Mar 29 03:43 PM

[vvvvviking:]

March was a bad month because they lied about making a profit in Jan and Feb and need a way to cover their butts when their first quarter results are terrible.

Mar 29 03:45 PM

[jsudds:]

we are only a few weeks from the moment of truth! I certainly wouldn't bet against them until then!

Mar 29 08:08 PM

[bt310:]

These firms are using taxpayer dollars and yet they are essentially letting their trading desks short the market. Nice. They have the firepower to move the markets anyway they want. JP Morgan was caught manipulating the market in Poland by buying the heaviest weighted stocks in huge volumes and actually moving the market 8-10% in twenty minutes. You don't think that's possible in the US when you can collude with several others your size?Next time you see XOM CVX PG JPM moving 2 dollars in 15 minutes remember that they are the biggest weight in the S&P. Those SPX/SPY options can be bought cheaply and sold at a nice profit after you bid up the heavyweights. It's amazing how the selling pressure stops once these big firms get their way.

Mar 30 01:11 AM