Home » Stocks » Bear Case Scenario for JP Morgan. Does the Emperor Wear Clothes? $JPM, $XLF

Bear Case Scenario for JP Morgan. Does the Emperor Wear Clothes? $JPM, $XLF

Is the mortgage and housing crisis really over. If the US economy stumbles how many customers fall off the pumpkin cart and create credit losses.

Things can and do go wrong. Think London Whale. Who authorized that? Not the shareholders.

JP Morgan is a systemically important bank. Therefore you might as well give regulators some regular office space in the head office. You will be joined at the hip for the foreseeable future. If something goes wrong and the regulator did not catch it watch for a unique firestorm of special proportions. Regulators screaming foul. Shareholders screaming regulatory malfeasance. It won’t be pretty.

How much longer for Jamie Dimon? Will the replacement be as impressive? Is the bank too large to manage? The next crisis will hear a renewed cry for dismemberment.

George Gutowski writes from a caveat emptor perspective.

 

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