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Over 30 years of investing in individual stocks. Extensive business experience with small to mid-size companies, including as CEO. Many hundreds of blog posts on financial and economic matters since 2008. Focus on value with catalysts for upside price action. Background as a physician and... More
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  • JPM Laying Off Thousands, Fits With The Theme Of Continued Economic Sluggishness 2 comments
    Feb 26, 2013 1:00 PM | about stocks: 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
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  • Rigorous
    , contributor
    Comments (373) | Send Message
    I don't mean to be arguementative. But along with my dearth of borrowers comment on your much appreciated yotai gap article, I think that again, there is a dearth of borrowers. House prices outside the high employment cities are low. It is easy to qualify. The originators, including the banks themselves, are operating mills like they did before the crisis. They take all your information over the phone and run your credit bureau. You only need 3% down. Rates are so very low. They want to make the loan. Montly payments compete with rentals. In the high employment cities the prices of houses are very high. Too high for comfort. Nobody really can be sure of the future so if you depend on income from a couple to support a mortgage you are taking a big risk.


    The well to do children are the only ones buying houses. They have the gift of down payments and a back up. The retired are selling and moving into retirement communities or standing pat.
    26 Feb 2013, 04:53 PM Reply Like
  • DoctoRx
    , contributor
    Comments (7296) | Send Message
    Author’s reply » NO problem with your comment. How does it relate to my Instablog?
    My take on your comment is that you are agreeing with me that the real economy is not too good. Housing bubble 2.0 and all that... and even so, JPM is laying people off.
    26 Feb 2013, 07:59 PM Reply Like
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