JPMorgan Bear Case Scenario $JCP, $C, $XLF, $BAC, $WFC, $AIG

JPMorgan (NYSE:JPM) demonstrates the high cost of litigation and poor governance. Not all of this is Jamie Dimon’s fault. They inherited lots of problems when they bought at 2008 distress prices. Little did they know at the time.

Short ratio is 2.98%

Clearly a systemically important firm, that seems very good at hitting every major pothole in the road. JP Morgan remains on the regulatory radar. Every regulatory gun out to make a name for him/herself keeps a file on these guys.

Jamie Dimon needs to come up with a karmic cleansing action to shed some perception baggage.

George Gutowski writes from a caveat emptor perspective.

Volcker Rule – Pigs at Trough or Good Risk Management $XLF, $C, $BAC, $JPM, $WFC, $AIG, $GS, $MS #Volckerrule

The much debated Volcker Rule will be voted on by a series of regulatory agencies. essentially the rule in most part is a form of return to the old Glass Steagall system. Wall Street will still be allowed to take risks  But banks reliant on depositor funds and ultimately relying on Federal Government Deposit Insurance will no longer have the right to blow their financial brains out at the expense of depositors and the US tax payer.

Wall Street is still allowed to take risks and blow their brains out. Just use your own money or risk capital that knowingly accepts the risks and rewards.

US Chamber of Commerce and banking industry want to retain the lucrative side of hedging and risk which the Volcker rule wishes to separate. This allows them to absorb loses and stay in business. Take for example JPMorgan and the London Whale which apparently is a complete surprise to Jamie Dimon and the board of directors. If that was a private equity fund it may have gone bankrupt. In any event there would have been some very close questioning and not some shareholder dithering over who to vote for board director. Funds would have been withdrawn and vigorous lawsuits would have been launched.

The mood of the country is that of mistrust. Main street does not trust Wall Street. Tea Party supporters will find that while some voters mistrust government spending they do not want to back risk loving Wall Street Banks. The two dots do not connect.

You want to take risk. Go ahead. Just play with your own money. If you want to invest in risk invest directly. Blue Chip banks do not reward shareholders for the risks undertaken in hedges, prop trading and derivatives.

Perhaps management just does not want to be held accountable. The markets are volatile and its harder than it looks.

George Gutowski writes from a caveat emptor perspective.

JPMorgan Analyst Hypocrisy Will Jamie Dimon’s Condom Finally Rupture $JPM $C $WFC $GS $XLF $BAC

What’s this about Jamie Dimon’s condom rupturing? So far JPMorgan (NYSE:JPM)has had an enchanted life. Huge regulatory fines that would have crucified most CEO’s and Boards have not been hurtful to the current management structure.

The embarrassing losses of the London Whale and huge costs of new risk management programs are still being digested. Yet the stock has stayed spectacularly strong. Today in a strong rebound market it is up on pre-earnings speculation.

Yet many analysts are anticipating a significant drop in earnings. We all know about the jumbo fines which will be one time events. Look carefully and the mortgage market looks weak. JPMorgan results are weak and expected to stay weak.

This bodes poorly for JPMorgan, other banks and the economy.

If you believe in the law of unintended consequences; has Jamie Dimon’s condom ruptured.

Please discuss among yourselves.

George Gutowski writes from a caveat emptor perspective. Follow him on Twitter @financialskepti

JPMorgan and Jamie Dimon Reach Guinness World Record. Must be Last Chance Gulch. $JPM $XLF Read..

JPMorgan (NYSE:JPM) is coughing up some $920 million in fines for the London Whale debacle. The SEC continues to push on high and exorbitant CEO salaries. At what point will the regulators of financial behaviour decide that the CEO with record-breaking fines should be subject to a suitability review.

Jamie Dimon and JPMorgan will hold an everlasting card in the Financial Trivia Question. “Who had to pay the biggest fine for financial screw-ups in all of history.”

Checking with Guinness World Book of Records to see if a new plateau has been reached.

You think this is the last one? Because no one has the stomach for more governance problems from JPMorgan. I don’t care if they spend $200 million or more on risk and compliance models. It’s all about the leadership.

Can you imagine the memoirs if he writes them? Guaranteed best seller but the editing will be a bitch.

George Gutowski writes from a caveat emptor perspective. Follow him on Twitter @financialskepti


Strange Logic behind Regulators Lawsuits on London Whale $JPM, $XLF It’s all about the Kill Shot.

JPMorgan (NYSE:JPM) is in the news again. Finally some charges or something or other are about to be laid. But the regulators are going after some small fish. The Board of Directors untouched. Jamie Dimon the CEO has all his Teflon intact. Bruno Iksil the London Whale has slithered out. Neither Ina Drew, the bank’s former chief investment officer, nor Achilles Macris, a former top Chief Investment Office executive have been charged.

The regulators want to lower level operatives. Two former JPMorgan traders – Javier Martin-Artajo and Julien Grout are the targets “du jour”  Minnows not whales.

Pour Quoi?

By charging the most senior members of JPMorgan the regulator would face blow back over their ineffectual role. Everyone is innocent until proven guilty. Defense lawyers say what they need to say to get their clients off. The regulator cannot get a clean “Kill Shot” so its taken an Uzi and is spraying a few small fish to make it look good.

Regulators are political animals and savvy as to the way of bureaucracy. They have no interest in suicidal confrontation where they end up wearing it.

Obama for all his chagrin with Wall Street may end up giving Jamie Dimon an ambassadorship just to neutralize him and his cohorts.

George Gutowski writes from a caveat emptor perspective. Follow him on Twitter @financialskepti . One piece of advice to one and all. Never walk in front of the snipers rifle.

JPMorgan Criminal Charges. One Key Wild Card $JPM $XLF $C $BAC $WFC

JPMorgan (NYSE:JPM) faces new civil and criminal charges on supposed swindles in mortgage-backed securities. Criminal hard to prove and sustain on appeal. Civil is business and is settled as you or I pay parking tickets.

Just remember this Jamie Dimon is not beloved within Washington DC. If there is a file that will get extra resources it will be this one. Criminal charges are not business.

George Gutowski writes from a caveat emptor perspective. Follow him on Twitter @financialskepti

JP Morgan Tricks and Sleight of Hand. Need Proof in Dividend $JPM

JP Morgan (NYSE:JPM) came up with a beat the street for latest quarterly earnings. When you think about it Jamie Dimon after all the controversy at the AGM about his role as Chairman and CEO could not come up with less than expected. But buddy you cheatin a bit. As a bank you warn us that loan growth is soft. Then we all hear that mortgage refi and the housing market is not as strong as we want it to be. Then you make the numbers by cutting back on your loan loss reserves. If you had not cut back on loan loss you would have had a big miss. The four-year trend looks like the slope of a double black diamond skill hill. Dangerous.

So the operations are not carrying themselves as well as they should. Investors are starting to get tired of the magic trick. We all know banks will lose money somewhere, somehow and for sure. So why cut back and manufacture pretty profits for today. The profits are like cut fresh flowers. They eventually wilt.

The real proof is in the dividend. In God we trust all others including Jamie Dimon pay cash. When they pop the dividend that’s when you start to believe. In the meantime from the folks that brought you the London Whale and then made earnings by dropping loan loss provisions it’s a real caveat emptor moment. No need to rush in.

George Gutowski writes from a caveat emptor perspective.