Money to Spend: Apple $75.8 Billion, U.S. Government $73.7 Billion [View article]
Then start reviewing the numbers with Reagan's huge spending spree, match it to his tax cuts, and see what a difference it made when taxes were finally raised. This is not revision though your "research" comes pretty close.
Regarding the cheap shot partisan hack part, I voted for Clinton but am sanguine enough to know that the bond market's immediate recovery his first day in office was not based soley on his promise to improve the economy. Some work was done well before that to improve the balance sheet.
Real numbers do speak for themselves, that much we agree upon,
Money to Spend: Apple $75.8 Billion, U.S. Government $73.7 Billion [View article]
It did not take Clinton 6 years. The first day he stepped into office, the bond market begin its bull market advance. Might have had something to do with Bush Sr., having to raise taxes in his first two months in office.
Why a Good Mix of Bond Funds Belong in a Retirement Portfolio [View article]
Among the many interesting comments here "GE alone spent about $40 Million....and they all but went broke just a few years ago." Have you consulted your pharmacologist about drug interaction?
5 Global CEFs Paying Monthly Dividends [View article]
Hamill,
If you are new to CEF's you should familiarize yourself with the very recent posting by "CEF Guy". He has a bit of an attitude towards other postings by equally knowledgeable Closed End Fund contributors but his observations and critical faculties are instructive.
Another thing you should do is to go back to the very end of the article where you will see a profile on Doug Albo who not only has done very good research but is one of the more articulate contributors. If you enter "CEF" in the search field at the upper right of the seekingalpha home page, you will find that there are other good contributors.
Finally, if you want to print these posts, all you need to do is to left click, drag your cursor over the text, and click "copy", then you can left click and "paste". It works just the same as any word processing software.
My record notes from the album by Traffic have the final couplet of "Dear Mr Fantasy" as "please don't be said if it was the strychnine you had" not the "straight head you had" which the author quotes. Whether that is what Steve Winwood intended or just a later revision is not important.
What is important is that the reference to hallucinogenic and possible fatal drug overdose is a very good analogy for the palliative treatment typically offered to terminal patients and now being delivered to the economy.
Back in the sixties when Traffic recorded this song, there was a belief that consuming incredible amounts of psilocybin mushrooms, with lethal strychtine centers would lead to a better understanding of life. Apparently the joy of the experience outweighed the risk of death. One only need to read the writings of Carlos Castenada to understand how many people went into the desert with their bag of peyote buttons looking for enlightment but who ended up overdosing.
The current generation of fiscal policy makers are following the same potentially lethal path. The preference for hallucination seems to outweight any consideration for the possibility of fatal risk. Anyone who thinks we can save the economy by creating more debt, as Eric Parnell points out, definitely fits the description of Mr Fantasy.
Full disclosure. I do not own GE, and do not intend to transact in GE over the next 72 hours. As fiduciary, however, I am researching this company for growth oriented portfolios where recent investment mandates require positions in a few select large cap dividend paying stocks.
Forgot to mention the group leader, since US Filter was acquired, is Vivendi. There are other conglomerates also making large investments in water and this is not a recent occurance.
Over the last 20 years, GE has quitely been acquiring filtration technology companies. As their corporate mission requires them to be either first or second in any respective area, one could expect them to devote massive resources to the water filtration busines going forward.
Since we also know that GE requires a fairly high return on investment before it enters any area, it is a fair assumption that they are meeting those internal metrics and it will represent a significant part of their future growth and overall revenue stream.
Not unlike the oil and gas business, perhaps the best investment in the natural resource stocks are the "services companies" that provide the engineering, construction, and drilling.
But most important of all participants in the water industry are filtration and testing companies like Sabesp (SBS) which does work in Brazil and Heckman (HEK) started by the founder of US Filter, which operates extensively in China.
Federal Reserve Bank Credit May Be a New Leading Indicator [View article]
"The shocker is the correlation between Federal Reserve money printing and the S&P 500 Index. The S&P rose when the Fed printed money."
Bob,
Are you a genius or what? What a revelation that massive increases in liquidity would cause assets of choice to rise. OMG! This article and the first comment by bbro about a "loose coorelation" pretty much sum up the lack of understanding between liquidity and market performance,
The major flaw in this story is that you blame credit for asset inflation. The facts support another conclusion. Money supply, not credit, completely leads as an indicator of any particular asset you want to inflate. Despite your claim that your research has not discovered any prior such discoveries, history is replete with examples of when fed-induced excess cash led to over inflated asset values.
This has happened about every five years the last two decades. Junk bonds 80 to 84, real estate 84 to 88, global blue chips 89 to 94, high tech 95 to 01, financial 02 to 07, energy/commodities 07 to 10. it is no coincidence that Allan Greespan was the Fed Chair for most of this time span.
Whether you measure by M1 (cash and deposits) or using M2 (short term liabilities that can be liquidated in 30 days), it has been clear for decades that the availability of cash or credit will support high levels of demand. It's that darned supply and demand thing when demand is high and supply is finite.
Take a look at what happend to the market in early to what should be everyone's favorite money supply indicator, MZM, money of zero maturity. This is the actual money that is printed by the mint. It does not impact banking or the fractional reserve system, which we all know as "credit. MZM typically increases 4 or 5% every year. In early 2008, however, it increased 90%. Thus began the nearly 100% increase in the S&P 500.
Again, this had nothing to do with credit, the money made available through the fractional reserve system. That requires banks to step up to the plate through the Fed's buying and selling of securities through the primary dealers and banks. That's how credit is stimulated.
The basic printing of money, however, is a Treasury Function and not a Federal Reserve function. That has nothing to do with credit, as the author postulates, and has evverything to do with printing presses running overtime.
And that is all you need to know. It is not a shocking discovery, it is available in any weekend market data report offered by all the press. And it's been well known for three years.
Get over yourself. It's not about whether KFT products have redeeming value in your mind, whether your highly refined pallette gags at the sight of Velveeta or anything else that is based soley on your tastes and preferences.
What it is about is the criteria for stock selection that Buffett has used so successfully over the last 50 years. Rather than relying on your olfactory to pick stocks, try reading the teachings of two Columbia University Professors, Benjamin Graham and David Dodd, who co-authored "Securities Analysis" and pioneered value investing.
If Warren Buffet had bought stocks over his career based on what he personally liked or did not like, do you think anyone would know who he is today? Maybe the people who work at the local A&W in Omaha, but that would be about it.
Playing the Coming Bond Market Crash [View article]
Golfit...
Three observations about your comment to American in Paris (AIP).
First, you claim that if one reviews AIP's link it will prove your thesis that the increase in value of the Chinese Treasury bonds has to do with actively trading the portfolio. The website AIP linked makes no reference whatsoever to either buying or selling of US Treasury bonds by foreigners. It simply states the value of the holdings. There is no way you can discern whether they are buying or selling from that data. Strike one.
Second, the increase in the position value of their holdings over that year period represents a 28% increase. Since it is well documented that they greatly increased their holdings in 2010 and have been selling about 1% a month in 2011, you have no support for the statement that "there (sic) just flat out great traders.......". Strike two.
Third, you try to establish that the increase in the Chinese holdings result from trading where "they have huge profits....as the value as the bonds have increased.... " It should be clear to anyone that once you liquidate a holding, the profit is no longer counted toward the value of that holding. Pretty straight forward. Strike three.
Finally, it is by now quite well established that the Chinese bureacratic government completely micromanages their treasury function. There are no master of the universe traders making daily swing trades. Quite the opposite, their finance ministry issues a monolithic charge to buy or sell in a completely controlled and telegraphed manner. Not exactly the optimum environment for "a flat out great trader."
Maybe you should be checking Martin's research instead. In his opening statement he claimed that US has begun selling its QE2 purchases, which is completely incorrect. If anyone has bothered to read the papers the last two days, the news has been quite clear that the Treasury is holding onto those bonds and has no intention of shrinking the balance sheet through UST sales. ,
So between Martin's misinformation and your license with the facts, we have no authority or even a shred of evidence to support the proposition that massive sales of US Treasuries will lead to an upcoming bond collapse.
Nice try though.
FAMCO
PS: Hat tip to Gratian for his comment below. This is Meredith Whitney all over again. Remember just eight months ago how she stated that there was going to be hunderds of muncipal defaults and bankruptcies? Never let the facts get in the way of a good story.
Playing the Coming Bond Market Crash [View article]
Kunst,
While I agree that sarcasm is not optimal communication, American in Paris was not being unduly rude. There are several writers in this chain, including the contributor Martin Hutchinson, who have completely disregarded the facts to make unsustainable points.
Martin starts out by saying that the upcoming Treasury crash will be due to massive sales by the US and by China. Contrary to Martin's claim, it is well reported the last two days that the Treasury will not shrink its balance sheet through bond sales.
American in Paris provided value also by showing an overall increase in Chinese UST holdings. Then writer GofittoBob completely revises the same data claiming China's increase in holdings is due to sales. Huh?
SA contributors who don't check facts or even worse, make them up, need to be called on it.
Playing the Coming Bond Market Crash [View article]
Golfit...
Three observations about your comment to American in Paris (AIP).
First, you claim that if one reviews AIP's link it will prove your thesis that the increase in value of the Chinese Treasury bonds has to do with actively trading the portfolio. The website AIP linked makes no reference whatsoever to either buying or selling of US Treasury bonds by foreigners. It simply states the value of the holdings. There is no way you can discern whether they are buying or selling from that data. Strike one.
Second, the increase in the position value of their holdings over that year period represents a 28% increase. Since it is well documented that they greatly increased their holdings in 2010 and have been selling about 1% a month in 2011, you have no support for the statement that "there (sic) just flat out great traders.......". Strike two.
Third, you try to establish that the increase in the Chinese holdings result from trading where "they have huge profits....as the value as the bonds have increased.... " It should be clear to anyone that once you liquidate a holding, the profit is no longer counted toward the value of that holding. Pretty straight forward. Strike three.
Finally, it is by now quite well established that the Chinese bureacratic government completely micromanages their treasury function. There are no master of the universe traders making daily swing trades. Quite the opposite, their finance ministry issues a monolithic charge to buy or sell in a completely controlled and telegraphed manner. Not exactly the optimum environment for a flat our great trader.
Maybe you should be checking Martin's research instead. In his opening statement he claimed that US has begun selling its QE2 purchases, which is completely incorrect. If anyone has bothered to read the papers the last two days, the news has been quite clear that the Treasury is holding onto those bonds and has no intention of shrinking the balance sheet through UST sales. ,
So between Martin's misinformation and your license with the facts, we have no authority or even a shred of evidence to support the proposition that massive sales of US Treasuries will lead to an upcoming bond collapse.
Nice try though.
FAMCO
PS: Hat tip to Gratian for his comment below. This is Meredith Whitney all over again. Remember just eight months ago how she stated that there was going to be hunderds of muncipal defaults and bankruptcies? Never let the facts get in the way of a good story.
Journalistic Confusion Over Quantitative Easing [View article]
The original intent of the first round of bail out funding, TARP and QE1, was meant to prevent the bottom falling out of the fractional reserve system. It was not meant to "revive the economy". They are two completely different problems which require two distinctly different solutions.
The same monetary tools used to save the banking system will not be much help in reviving the economy. This is a fiscal problem where the solution is to deleverage, not a monetary probelm where the solution is to stimulate.
What QE2 has done, however, is to provide even greater future debt service in the form of higher taxes for every household at a time when every household will be trying to reduce liabilities. Further hindering recovery are the low savings rates required under QE2. Household assets and savings cannot grow in a meaningful way.
In effect, QE2 has replaced the personal debt that households can control with government debt which they cannot. Deleveraging will never happen under this scenario, nor will economic recovery. As long as I must allocate my income to some form of unproductive debt service, as opposed to any productive asset, recovery will be further and further postponed.
Under QE2, the government can issue, purchase and hold as much debt as it wants but it would still not address the problem that every household understands perfectly well how to solve.
JPMorgan's Competitive Position Just Increased [View article]
Left,
Your point is not lost on me that the new reserve requirement represents a huge drag on a money center bank's ability to make profits. In that respect, yes, there is a sense that this is a "relative" benefit. But isn't any company's profit advantage over another a "relative" issue?
As the author has demonstrated, the advantage of having a lower threshold to meet the capital reserve requirement is more than an inchoate, relative matter. For shareholders, whom the author addresses, (and not new buyers as you have noted), this is very absolute.
Consider that BOFA needs to increase its reserve almost 90% more, and CITI needs to increase its reserves by nearly 40% respectively more than JPM. If you understand how powerful leverage is to banks, then you see that the other two banks not only have less money to lend, but they may in fact have to continue calling in their credit facilties with current clients while JPM is making new loans.
This may be a "relative" matter to some, but for shareholders, this is a critical and significant advantage that should give them confidence that the original reason they bought money center banks, the ability to lever a strong balance sheet, is very much still part of the JPM story.
And it's not just about the reserve requirements where there is an absolute advantage. The reserve requirements, the qualitative issues, are only part of the story. The reference to strong management and supportive shareholders, the qualitative issues are extremely critical to any money center bank right now.
It is well recognized that "culture" at JPM is not lip service. Participants (managers, employers, vendors, clients) who have witnessed the last 20 year massive scaling of the money center banks are keenly aware of which banks have a strong management culture and those that do not.
Full disclosure: I do not own JPM but I am currently looking at the TARP warrants that have about two or three years to go.
Money to Spend: Apple $75.8 Billion, U.S. Government $73.7 Billion [View article]
Regarding the cheap shot partisan hack part, I voted for Clinton but am sanguine enough to know that the bond market's immediate recovery his first day in office was not based soley on his promise to improve the economy. Some work was done well before that to improve the balance sheet.
Real numbers do speak for themselves, that much we agree upon,
Money to Spend: Apple $75.8 Billion, U.S. Government $73.7 Billion [View article]
Lightway, get a grip on reality.
Why a Good Mix of Bond Funds Belong in a Retirement Portfolio [View article]
Have you consulted your pharmacologist about drug interaction?
5 Global CEFs Paying Monthly Dividends [View article]
If you are new to CEF's you should familiarize yourself with the very recent posting by "CEF Guy". He has a bit of an attitude towards other postings by equally knowledgeable Closed End Fund contributors but his observations and critical faculties are instructive.
Here's his latest post:
seekingalpha.com/artic...
Another thing you should do is to go back to the very end of the article where you will see a profile on Doug Albo who not only has done very good research but is one of the more articulate contributors. If you enter "CEF" in the search field at the upper right of the seekingalpha home page, you will find that there are other good contributors.
Finally, if you want to print these posts, all you need to do is to left click, drag your cursor over the text, and click "copy", then you can left click and "paste". It works just the same as any word processing software.
Welcome on board.
FAMCO
Time to Move to Cash? [View article]
What is important is that the reference to hallucinogenic and possible fatal drug overdose is a very good analogy for the palliative treatment typically offered to terminal patients and now being delivered to the economy.
Back in the sixties when Traffic recorded this song, there was a belief that consuming incredible amounts of psilocybin mushrooms, with lethal strychtine centers would lead to a better understanding of life. Apparently the joy of the experience outweighed the risk of death. One only need to read the writings of Carlos Castenada to understand how many people went into the desert with their bag of peyote buttons looking for enlightment but who ended up overdosing.
The current generation of fiscal policy makers are following the same potentially lethal path. The preference for hallucination seems to outweight any consideration for the possibility of fatal risk. Anyone who thinks we can save the economy by creating more debt, as Eric Parnell points out, definitely fits the description of Mr Fantasy.
Watch out before you swallow the whole thing.
FAMCO
Water: It's Not Just for Drinking [View article]
FAMCO
Water: It's Not Just for Drinking [View article]
Over the last 20 years, GE has quitely been acquiring filtration technology companies. As their corporate mission requires them to be either first or second in any respective area, one could expect them to devote massive resources to the water filtration busines going forward.
Since we also know that GE requires a fairly high return on investment before it enters any area, it is a fair assumption that they are meeting those internal metrics and it will represent a significant part of their future growth and overall revenue stream.
FAMCO
Water: It's Not Just for Drinking [View article]
But most important of all participants in the water industry are filtration and testing companies like Sabesp (SBS) which does work in Brazil and Heckman (HEK) started by the founder of US Filter, which operates extensively in China.
Bottoms up!
FAMCO
Federal Reserve Bank Credit May Be a New Leading Indicator [View article]
Bob,
Are you a genius or what? What a revelation that massive increases in liquidity would cause assets of choice to rise. OMG! This article and the first comment by bbro about a "loose coorelation" pretty much sum up the lack of understanding between liquidity and market performance,
The major flaw in this story is that you blame credit for asset inflation. The facts support another conclusion. Money supply, not credit, completely leads as an indicator of any particular asset you want to inflate. Despite your claim that your research has not discovered any prior such discoveries, history is replete with examples of when fed-induced excess cash led to over inflated asset values.
This has happened about every five years the last two decades. Junk bonds 80 to 84, real estate 84 to 88, global blue chips 89 to 94, high tech 95 to 01, financial 02 to 07, energy/commodities 07 to 10. it is no coincidence that Allan Greespan was the Fed Chair for most of this time span.
Whether you measure by M1 (cash and deposits) or using M2 (short term liabilities that can be liquidated in 30 days), it has been clear for decades that the availability of cash or credit will support high levels of demand. It's that darned supply and demand thing when demand is high and supply is finite.
Take a look at what happend to the market in early to what should be everyone's favorite money supply indicator, MZM, money of zero maturity. This is the actual money that is printed by the mint. It does not impact banking or the fractional reserve system, which we all know as "credit. MZM typically increases 4 or 5% every year. In early 2008, however, it increased 90%. Thus began the nearly 100% increase in the S&P 500.
Again, this had nothing to do with credit, the money made available through the fractional reserve system. That requires banks to step up to the plate through the Fed's buying and selling of securities through the primary dealers and banks. That's how credit is stimulated.
The basic printing of money, however, is a Treasury Function and not a Federal Reserve function. That has nothing to do with credit, as the author postulates, and has evverything to do with printing presses running overtime.
And that is all you need to know. It is not a shocking discovery, it is available in any weekend market data report offered by all the press. And it's been well known for three years.
Not exactly breaking news. But nice try.
FAMCO
It st
Warren Buffett's Favorite High-Dividend Stock Picks [View article]
Get over yourself. It's not about whether KFT products have redeeming value in your mind, whether your highly refined pallette gags at the sight of Velveeta or anything else that is based soley on your tastes and preferences.
What it is about is the criteria for stock selection that Buffett has used so successfully over the last 50 years. Rather than relying on your olfactory to pick stocks, try reading the teachings of two Columbia University Professors, Benjamin Graham and David Dodd, who co-authored "Securities Analysis" and pioneered value investing.
If Warren Buffet had bought stocks over his career based on what he personally liked or did not like, do you think anyone would know who he is today? Maybe the people who work at the local A&W in Omaha, but that would be about it.
FAMCO
Playing the Coming Bond Market Crash [View article]
Three observations about your comment to American in Paris (AIP).
First, you claim that if one reviews AIP's link it will prove your thesis that the increase in value of the Chinese Treasury bonds has to do with actively trading the portfolio. The website AIP linked makes no reference whatsoever to either buying or selling of US Treasury bonds by foreigners. It simply states the value of the holdings. There is no way you can discern whether they are buying or selling from that data. Strike one.
Second, the increase in the position value of their holdings over that year period represents a 28% increase. Since it is well documented that they greatly increased their holdings in 2010 and have been selling about 1% a month in 2011, you have no support for the statement that "there (sic) just flat out great traders.......". Strike two.
Third, you try to establish that the increase in the Chinese holdings result from trading where "they have huge profits....as the value as the bonds have increased.... " It should be clear to anyone that once you liquidate a holding, the profit is no longer counted toward the value of that holding. Pretty straight forward. Strike three.
Finally, it is by now quite well established that the Chinese bureacratic government completely micromanages their treasury function. There are no master of the universe traders making daily swing trades. Quite the opposite, their finance ministry issues a monolithic charge to buy or sell in a completely controlled and telegraphed manner. Not exactly the optimum environment for "a flat out great trader."
Maybe you should be checking Martin's research instead. In his opening statement he claimed that US has begun selling its QE2 purchases, which is completely incorrect. If anyone has bothered to read the papers the last two days, the news has been quite clear that the Treasury is holding onto those bonds and has no intention of shrinking the balance sheet through UST sales. ,
So between Martin's misinformation and your license with the facts, we have no authority or even a shred of evidence to support the proposition that massive sales of US Treasuries will lead to an upcoming bond collapse.
Nice try though.
FAMCO
PS: Hat tip to Gratian for his comment below. This is Meredith Whitney all over again. Remember just eight months ago how she stated that there was going to be hunderds of muncipal defaults and bankruptcies? Never let the facts get in the way of a good story.
Playing the Coming Bond Market Crash [View article]
While I agree that sarcasm is not optimal communication, American in Paris was not being unduly rude. There are several writers in this chain, including the contributor Martin Hutchinson, who have completely disregarded the facts to make unsustainable points.
Martin starts out by saying that the upcoming Treasury crash will be due to massive sales by the US and by China. Contrary to Martin's claim, it is well reported the last two days that the Treasury will not shrink its balance sheet through bond sales.
American in Paris provided value also by showing an overall increase in Chinese UST holdings. Then writer GofittoBob completely revises the same data claiming China's increase in holdings is due to sales. Huh?
SA contributors who don't check facts or even worse, make them up, need to be called on it.
FAMCO
Playing the Coming Bond Market Crash [View article]
Three observations about your comment to American in Paris (AIP).
First, you claim that if one reviews AIP's link it will prove your thesis that the increase in value of the Chinese Treasury bonds has to do with actively trading the portfolio. The website AIP linked makes no reference whatsoever to either buying or selling of US Treasury bonds by foreigners. It simply states the value of the holdings. There is no way you can discern whether they are buying or selling from that data. Strike one.
Second, the increase in the position value of their holdings over that year period represents a 28% increase. Since it is well documented that they greatly increased their holdings in 2010 and have been selling about 1% a month in 2011, you have no support for the statement that "there (sic) just flat out great traders.......". Strike two.
Third, you try to establish that the increase in the Chinese holdings result from trading where "they have huge profits....as the value as the bonds have increased.... " It should be clear to anyone that once you liquidate a holding, the profit is no longer counted toward the value of that holding. Pretty straight forward. Strike three.
Finally, it is by now quite well established that the Chinese bureacratic government completely micromanages their treasury function. There are no master of the universe traders making daily swing trades. Quite the opposite, their finance ministry issues a monolithic charge to buy or sell in a completely controlled and telegraphed manner. Not exactly the optimum environment for a flat our great trader.
Maybe you should be checking Martin's research instead. In his opening statement he claimed that US has begun selling its QE2 purchases, which is completely incorrect. If anyone has bothered to read the papers the last two days, the news has been quite clear that the Treasury is holding onto those bonds and has no intention of shrinking the balance sheet through UST sales. ,
So between Martin's misinformation and your license with the facts, we have no authority or even a shred of evidence to support the proposition that massive sales of US Treasuries will lead to an upcoming bond collapse.
Nice try though.
FAMCO
PS: Hat tip to Gratian for his comment below. This is Meredith Whitney all over again. Remember just eight months ago how she stated that there was going to be hunderds of muncipal defaults and bankruptcies? Never let the facts get in the way of a good story.
Journalistic Confusion Over Quantitative Easing [View article]
The same monetary tools used to save the banking system will not be much help in reviving the economy. This is a fiscal problem where the solution is to deleverage, not a monetary probelm where the solution is to stimulate.
What QE2 has done, however, is to provide even greater future debt service in the form of higher taxes for every household at a time when every household will be trying to reduce liabilities. Further hindering recovery are the low savings rates required under QE2. Household assets and savings cannot grow in a meaningful way.
In effect, QE2 has replaced the personal debt that households can control with government debt which they cannot. Deleveraging will never happen under this scenario, nor will economic recovery. As long as I must allocate my income to some form of unproductive debt service, as opposed to any productive asset, recovery will be further and further postponed.
Under QE2, the government can issue, purchase and hold as much debt as it wants but it would still not address the problem that every household understands perfectly well how to solve.
FAMCO
JPMorgan's Competitive Position Just Increased [View article]
Your point is not lost on me that the new reserve requirement represents a huge drag on a money center bank's ability to make profits. In that respect, yes, there is a sense that this is a "relative" benefit. But isn't any company's profit advantage over another a "relative" issue?
As the author has demonstrated, the advantage of having a lower threshold to meet the capital reserve requirement is more than an inchoate, relative matter. For shareholders, whom the author addresses, (and not new buyers as you have noted), this is very absolute.
Consider that BOFA needs to increase its reserve almost 90% more, and CITI needs to increase its reserves by nearly 40% respectively more than JPM. If you understand how powerful leverage is to banks, then you see that the other two banks not only have less money to lend, but they may in fact have to continue calling in their credit facilties with current clients while JPM is making new loans.
This may be a "relative" matter to some, but for shareholders, this is a critical and significant advantage that should give them confidence that the original reason they bought money center banks, the ability to lever a strong balance sheet, is very much still part of the JPM story.
And it's not just about the reserve requirements where there is an absolute advantage. The reserve requirements, the qualitative issues, are only part of the story. The reference to strong management and supportive shareholders, the qualitative issues are extremely critical to any money center bank right now.
It is well recognized that "culture" at JPM is not lip service. Participants (managers, employers, vendors, clients) who have witnessed the last 20 year massive scaling of the money center banks are keenly aware of which banks have a strong management culture and those that do not.
Full disclosure: I do not own JPM but I am currently looking at the TARP warrants that have about two or three years to go.
FAMCO