JPMorgan Earnings Mask A Squeeze In Revenue

Bloomberg:

Fourth-quarter results, which the New York-based company plans to announce tomorrow, are likely to show a profit of $4.2 billion, or $1 per share, based on the average estimate of analysts surveyed by Bloomberg. About 40 percent of earnings for the first nine months came from money taken from loss reserves as U.S. banks dip into their funds, at least temporarily, and mask a revenue squeeze.

Read the whole story: Bloomberg

Comments

[alanposting]

05:18 AM on 01/16/2011

I will never step foot in JP Morgan again.....was in Europe when my CD was maturing and i did not want it renew. They said I had to send a Notarized letter stating i did not want to renew my CD.....WHAT?....A notarized letter. I have had many CD's at many banks and NEVER had to send a notarized letter at maturity to get my money back. This bank SUCKS big time.

[GuyCybershy]

09:53 PM on 01/13/2011

Crash JP Morgan! Buy Silver! http://www.zerohedge.com/article/us-mint-reports-unprecedented-buying-spree-physical-silver

[Longtimeliberal]

07:18 PM on 01/13/2011

Wonder what the bonuses will be for the elite?

[costellowriter]

04:56 PM on 01/13/2011

It doesn't have to be this way. They get away with it because of the publics apathy and personal greed. If you want things to change, Google: Buy Silver, Crash JP Morgan.
http://bizcovering.com/investing/silver-heading-toward-200-an-ounce/

[plebian3]

03:31 PM on 01/13/2011

Not a problem, Chase honcho Bill Daley is the new consigliere at the W. House.

[keramos]

03:29 PM on 01/13/2011

"are likely to show a profit of $4.2 billion, or $1 per share,"

Only $4.2 billion?  The horror.  Where will the bonuses come from?  Will they have to stiff their shareholders for them?

My heart bleeds for the poor things.

[cccoyote]

03:05 PM on 01/13/2011

Be interesting to know what reserves are stashed in the Caymans.

[Miss Muffett]

02:23 PM on 01/13/2011

My question is this:
 
If banks are allowed to add any reserves for future losses that never materialize back into their earnings at the end of the year, what stops them from consistantly "predicting losses" in larger and larger dollar amounts every year (whether those predicted losses are real or entirely fabricated) and adding increasingly large amounts of money to their bottom line at the end of the year?

[costellowriter]

04:55 PM on 01/13/2011

That's the whole idea. And all the "losses" off shore, can be hidden without paying taxes in the US.
http://bizcovering.com/business/the-road-to-america/

[Miss Muffett]

09:58 AM on 01/14/2011

And these are the corporations the conservatives trust to have our best interests in mind. I have complete and utter disdain for corporations that off-shore their money to avoid taxes. Just frecking pay them and contribute to the betterment of the nation that gave you the opportunity to grow your corporation to such a substantial size. Its the least you could do - really.

[mujino]

02:00 PM on 01/13/2011

cooking numbers is the only thing that wall street does well

[dfranz]

01:40 PM on 01/13/2011

Magical accounting means mega bonuses. It's all about the moment.

[keramos]

03:24 PM on 01/13/2011

I like the comment and love the avatar.  Welcome back, Fritz!

739

[grouseless54]

12:58 PM on 01/13/2011

I suppose it's just a coincidence that today's lead article at Pension and Investment is some guy burbbling about all the new Real Estate Investment Trusts that are being organized for sale this year. Of course the banks can recover loan loss reserves. They're getting ready to dump a load more of you-know-what on your pension plans.
The juxtaposition that struck me (in comparison to this article) is the condemnation of some of the examples of Middle Class homeless in another article on this page. People who decided to live off savings between jobs are being roundly ripped and yet when our banks decide that they can skirt buy on the bare minimums of capitalization and loan losses, conservatives will not make the connection. Selective demands for responsibility are boring.

[Miss Muffett]

01:58 PM on 01/13/2011

"Selective demands for responsibility..."
Pretty much sums it up!

[getsit]

12:45 PM on 01/13/2011

I'm sorry, but I don't understand how a financial institution can get a tax break for "future losses"? Isn't this just a prediction? And why can't they take them in the year of the loss? Or can they take them then too? No wonder banks don't pay taxes on profits.

Why can't I take a tax break for future losses? Afterall, I live in an earthquake state. Sooner or later disaster will hit.

Please, would someone explain this to me? Besides corruption of government by big corp.

[Miss Muffett]

02:12 PM on 01/13/2011

There is genuinely no other explaination to be had.
 
Financial institutions, as well as most other industries including small businesses, are allowed to take a tax break on future losses for the same reason they are allowed to take out a loan against their debts (companies can get a short-term business loan up to the total amount they are owed by their customers). We are, after all, a debt-based economy so in terms of tax code speculation is just as good as the final bottom line regardless of the billions of factors that could make that end number far from where it was expected to be.
 
You as an individual are not allowed to take tax breaks for future losses because you do not have any future revenue expectations to cover that cost.
 
The reason that they cannot take them in the year of loss is that our tax code is written and must be approved before December 31st of the preceding year (aka taxes for 2011 had to be approved december 31,2010) before the government has any idea of what to expect in terms of tax revenue. I know, its very stupid. And to further complicate the matter, the government and the better majority of businesses start their "fiscal year" in spring (I think it ends in March, starts in April) after taxes have been paid and they can basically start fresh with their revenue 1/2 way through their second quarter.
 
Both unnecessarily and intentionally complicated.

[getsit]

03:36 PM on 01/13/2011

I understand that Accounts receivable is considered an asset working with numbers all day. Still, none of it makes any sense except to somehow give corporations another break on paying taxes. '

Really they use tax paid infrastructure in this country to do their business. They use the ports, the airports, mail, roads for their trucks, rails, electric grid, water systems, and so on. They depend on it. They should pay their fair share and I can't see that they do. There was a report last year that BofA, Citicorp, and GE paid no taxes in 2009 yet they all made record profits. I hate to use the unfair word, but that's what it is, unfair to the American People. If they were using their profits to create jobs and stimulate the economy maybe it would be ok-but they're not.

[binksmom85]

12:13 PM on 01/13/2011

these big banks are still insolvent, with a govt sanctioned illegal accounting method of keeping their toxic assets off their balance sheets. The only question to me is the timing with their eventual dissolution and the 2012 election cycle. In the mean time, the execs will keep drawing down the value of the businesses, and leave nothing of value for the coming breakup/shutdown.

[jwilson1]

12:08 PM on 01/13/2011

Easy to do when you all got 9 trillion dollars worth of loans at .0037% interest and charged customers up to 26% interest...modern day crooks.

Move your money reports 5 Billion moved out of big banks, State of Mass. moves all their money out of top three banks after banks refuse to chagre less then 18% on their credit cards.

Moveyourmoney.com

[getsit]

12:47 PM on 01/13/2011

I moved my money from BofA to a small community bank and a credit union in 1975. I have NEVER been sorry.

[EvolveorPerish]

11:00 PM on 01/13/2011

as we all should, ditch them I say. I love my community credit union.

[Kathleen Riley-Daniels]

12:01 PM on 01/13/2011

Modern day Robber Baron. Reap the profits, don't work with their customers.