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JPMorgan (JPM): Q3 EPS of $1.01 beats by $0.11. Revenue of $24.3B (-15.4%) vs. $24.6B. Shares...

JPMorgan (JPM): Q3 EPS of $1.01 beats by $0.11. Revenue of $24.3B (-15.4%) vs. $24.6B. Shares +1.4% premarket. (PR)
Comments (9)
  • bbro
    , contributor
    Comments (9323) | Send Message
     
    40 billion preprovsion earnings (annualized) to cover 690 billion loans
    with 110 billion tier1 common capital,,,,

     

    foreclosure response....Pages 14-15

     

    files.shareholder.com/...
    13 Oct 2010, 07:21 AM Reply Like
  • nobby73
    , contributor
    Comments (1177) | Send Message
     
    Provisions drop from $8.1bn to $3.22bn. Revenues seem down across the board.

     

    Foreclosure response covers only the homebuyers, nothing mentioned about re risks as trustee or sponsor of MBS...
    13 Oct 2010, 07:50 AM Reply Like
  • Harry Tuttle
    , contributor
    Comments (2221) | Send Message
     
    So they basically beat "estimates" (market talk for what they TELL the analysts during the quarter) on lower provisions.

     

    Does anyone KNOW the details of said provisions? Say you are asked to become a partner at JPM and, thus, need to invest your life savings on the equity of this bank. Would you KNOW if the provisions are fair? Would you rely on the regulators?

     

    JPM's balance sheet is so large and complicated that any assumption can turn a "better than expected" into "worse than expected." Unless, of course, you think bankers never lie and the economy (mortgages, consumer financing, small business, etc) is really getting better.
    13 Oct 2010, 08:34 AM Reply Like
  • Econdoc
    , contributor
    Comments (2944) | Send Message
     
    if you cannot figure this out do not assume that nobody can. hire someone who kows what they are doing.

     

    the fact is that credit quality is improving and this translates into lower charge-offs lower losses and better earnings for banks

     

    if all this smoothing was going on - they did a heck of a job smoothing everything on the way down to make it a nice gentle ride - do you remember what that was like? we thought the world was endng - some of you still do.

     

    if you older than 30 you should remember 1992/3 - this is where the banks are - in many ways this recovery has acted better than that one - although because the pit was deeper it still feels like you are in the hole.

     

    on another note - I recently bought some AMSC - a pure bet on alternative energy - not sure why but it is popping this week.

     

    E
    13 Oct 2010, 10:12 AM Reply Like
  • bbro
    , contributor
    Comments (9323) | Send Message
     
    Harry....what do you think is the worst two year chargeoff rate for banks
    in History????......the answer is out there....take that number apply it
    to total number of loans.....and subtract a conservative estimation of
    preprovision earnings over a 2 year period......
    13 Oct 2010, 08:39 AM Reply Like
  • Harry Tuttle
    , contributor
    Comments (2221) | Send Message
     
    bbro: as much as respect you, I do not think anybody knows what is in those balance sheets anymore. Since the numbers are so large, they are very sensitive to assumptions and I am sure the bean counters at JP are eager to place. After all, they own the stock.

     

    Just changing the prepayment assumption on the mortgage portfolio can swing the p&l hundreds of millions.

     

    Statistically, it is interesting that we keep hearing about foreclosures and general malaise and the consumer banks seem to always report "better than expected."
    13 Oct 2010, 08:49 AM Reply Like
  • nobby73
    , contributor
    Comments (1177) | Send Message
     
    Anyone who's ever been involved in balance sheet work at one of these banks knows how such bad loan provisions are used to "smooth" earnings. There is no hard science involved.

     

    JPM is no different to any of the banks, in the US or overseas - recent earnings beats have been dominated by loan provisions.
    13 Oct 2010, 09:36 AM Reply Like
  • bbro
    , contributor
    Comments (9323) | Send Message
     
    Aggregate loans were reduced 9 billion...LLR reduced 1.7 billion...
    I knoe in the home lending side loans were reduced 4.8 billion so the
    quality of the loans has improved contributing to the reduction of
    loan loss reserve....
    13 Oct 2010, 09:49 AM Reply Like
  • bbro
    , contributor
    Comments (9323) | Send Message
     
    First thanks for the respect....I think that the people that these banks
    have lent to still have jobs and probably are paying their debts....the
    people without work has not grown measurably ( 15.3 million last year
    and 14.7 million currently) and the bad debts are being slowly written off...so there is your improvement the credit quality has improved...
    despite a weak recovery....
    13 Oct 2010, 09:08 AM Reply Like
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