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JPMorgan Graveyard Whistle

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JPMorgan (JPM) does not understand macro trumps micro. In the latest earnings release they claim the rate of credit losses and write-offs is improving and therefore they are making more money. We have wholesale moratorium on foreclosure proceedings within the industry. We have stubbornly high unemployment. We have huge over hangs in residential real estate.

JPMorgan admits that their own good customers are still de-leveraging and reducing indebtedness. They also admit to shrinking margins. However Chief Executive James Dimon and Chief Financial Officer Douglas Braunstein said the quarter was a “solid” one.

JPMorgan is using cheap accounting tricks to boost short-term profits. Macro events will overwhelm short-term desperation.

Disclosure: I write from a caveat emptor perspective. I have no positions in stocks mentioned in this post.