Many of the big banks are claiming improved performance by reducing their charges for loan losses. Why? The more loan losses you have reserved for the stronger you are. Once the reserve is behind you why revisit the pain. Management must surely know the market is not a true believer in the reverse reserves tactic. Stocks will not trade up on this maneuver.
Bonus is based on earnings. The boys just want to put their hand into investors pockets. They are reaching deep. Be skeptical of this one.
Disclosure: George Gutowski writes from a caveat emptor perspective. I hold no positions in stocks mentioned in this post. I have no plans to initiate new positions within the next 72 hours.
- J.P. Morgan Earnings Confusion, Huge Discount To Book Value (JPM, BAC, WFC, C, FAS) (247wallst.com)
- BofA’s China Stake Sale Is Better For Holders Than Buffett (BAC, BRK-A, BRK-B, JPM, WFC, XLF, FAS) (247wallst.com)
- Financial Stocks: State St., Bank of America power financials rally (marketwatch.com)