JPMorgan's Profit Is a Fraud

Jul.15.10 | About: JPMorgan Chase (JPM)

The Wall Street ruling elite must think we are all as dumb as a CNBC talking head. Every part of JP Morgan’s (NYSE:JPM) business is declining (see earnings call transcript here). Underwriting, trading, and lending are all declining. But somehow the headlines blare that profits have SURGED BY 76%. Give me a break. First of all, they are borrowing money for free from the Federal Reserve and then buying Treasuries at 3%. A monkey or even Jim Cramer could make money that way. But let’s deal with reality for just a second. Here are the facts:

JP Morgan’s reported Income $4.8 billion

JP Morgan’s reduction in loss reserves $6.34 billion

JP Morgan's REAL Result $1.54 billion Loss

Somehow a bank that is borrowing for free managed to lose $1.5 billion in their real business. They continue to utilize accounting gimmicks in order to mislead the public and investors. They actually want you to believe that losses on mortgages, credit cards, home equity loans, and car loans will be dramatically dropping in the near future. If you believe that, I have some ocean front property in Afghanistan complete with a Taliban butler I’d like to sell you. This reduction in loan loss reserves is at the complete discretion of Jamie Dimon. This is how banks manipulate their earnings until the s**t hits the fan, then they come to you for a bailout. This is a disgusting display of hubris. Will anyone on CNBC pull the cover back to reveal this gigantic fraud. NOT A CHANCE.

Blaring headlines from MSM:

J.P. Morgan profit surges 76% as loan loss reserve shrinks

Disclosure: No positions