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JPM Laying Off Thousands, Fits With The Theme Of Continued Economic Sluggishness

|Includes:JPMorgan Chase & Co. (JPM)

An article on JPMorgan Chase (NYSE:JPM) is crossing today that appears to support my recent article on the importance of the yotai gap. Here's the headline:

JPMorgan to Slash Costs by $1 Billion, Staff by 4,000

JPMorgan Chase (JPM) became the latest Wall Street firm to scale back in an uncertain economy, announcing plans Tuesday to save $1 billion through various costs cuts and about 4,000 job reductions...

The bank stated it would reduce headcount in its mortgage banking unit by between 13,000 to 15,000 by the end of 2014. Most of these employees are considered contractual and hourly workers, and not full-time, the bank said...

JPMorgan's cost-saving efforts come at a time when its key rivals are also moving to adjust to a volatile global economy. Goldman Sachs (GS) is reportedly preparing a round of job cuts; meanwhile, beleaguered financial behemoth Citigroup (NYSE:C) announced its own massive restructuring plans last year.

Some layoffs likely are due to automation ("good deflation"-- good if you are not the one losing the job), but the message this sends me is that there are just not a lot of qualified borrowers out there. While a sluggish economy can perversely lead to high and rising stock prices for strong companies, overall this news report supports the Reinhart-Rogoff paradigm that it often takes 10 years for real recovery following a major financial meltdown.

Stocks: JPM