Dear Adrian Harrison, We talk a fair amount about interest rates at XXXXXX. We dub them the hormones of the economy. They are essential to our economic health. But if the cost to borrow money is the chemical that controls the economy... banks are the cardiovascular system that gets the hormones where they belong. They stretch throughout the economy, pushing money wherever its needed. They ensure the major organs are flush with nutrients. And they speed up and slow down the flow as the hormones dictate. Healthy banks are vital. And there is no doubt its been a big week for banks. Some folks will tell you bank earnings are a joke. Quarterly reports are so full of accounting wizardry that its impossible to accurately gauge whats going on. Take the news from Wells Fargo (NYSE: WFC) this week. The bank was eager to tell us it pushed JPMorgan (NYSE: JPM) out of the industrys top earnings slot. With some $21.8 billion in profits, the company had a strong year. The problem... about 10% of the profits are an accounting creation. It was the same at JPMorgan. The bank pulled in $18 billion in profits... but a full 31% of it is money made in years gone by. Opening the Vault You see, during the height of the economic downturn, banks ramped up their loan-loss reserves - the cash they buried in the backyard to protect against bad loans - in a big way. Tens of billions of dollars were stashed away. But now that tougher lending standards are paying off and fewer folks are out of jobs and unable to pay their bills, the banks need less in their rainy-day funds. As banks cut their reserves, the dusty cash flows straight to the bottom line and CEOs get to brag about oversized profits. But when we look at the earnings figures without the smoke and mirrors of the accounting department, we see the scene at these big banks is not quite as rosy as the headlines suggest. Fourth quarter revenue at Wells Fargo slipped 5.5% - from $21.9 billion to $20.7 billion. At JPMorgan, the years final quarter saw a sales slump worth 1%. Clearly, rising interest rates and a stop-and-go economy continue to weigh on the banks. But we dont need to rely on convoluted financial reports to tell us what we need to know. There are plenty of clues that tell us where things are headed. To start, for the first time in a long time, the banking sector has increasing clarity. We know the Feds short-term plans. We have a better sense of how Washington intends to regulate the industry. And many of the legal battles of the last five years are coming to an end (JPMorgan just announced a $2.6 billion settlement due to its involvement with Madoff). NOTE: 40 Billion US Dollars still missing !!!!! The plaque that has clogged the banking systems arteries for the last five years has eroded. JPMorgans CEO Jamie Dimon hints at the idea. We are pleased to have made progress on our control, regulatory and litigation agendas and to have put some significant issues behind us this quarter he said this week. But when asked whether his banks legal troubles are over, Dimons answer foretells choppy seas ahead. Im going to take a rain check on that, he said. Finally, its easy to dismiss the banks moves to slash loan-loss reserves as an accounting gimmick. Even so, the moves are symbolically poignant. It is a clear signal that their view of the economy is getting brighter with each passing quarter. Across the sector, tens of billions of dollars have been pulled out of the vault. Its cash that once again can circulate through our economic body. The losses the banks prepared for never came. Like a heart recovering from bypass surgery, the banking sector is getting stronger with every beat. Its still not ready to run a marathon, but its doing its job with greater and greater efficiency. Again, we turn to Dimon. We are increasingly optimistic about the future of the U.S. economy, he said, and will continue to do our part to support growth, economic development and the creation of new jobs around the world. For investors, thats good news. Our arteries are clearing up. NOTE: Not yet, still a few more issues to settle. Conclusion: If JPMorgan supports the BITCOIN industry and all the people who have lost their pension funds, that would be helpful. Purchase BITCOIN on the behalf of their accountable mistakes. So, we can all pay our taxes and bills. 1. Buy BITCOIN for all Madoff clients 2. Sell BITCOIN at high prices to repay clients. (Losses + 5 Year legal battles - Minus TAX) 3. Stimulate smaller ALTCOIN.. Like DOGE..5$ to 10$ @ market value. Why? Doge, its cheap it allow people to buy LOW...and SELL high. Make it public, this will help people get back on their feet. People who have lost their jobs, will have enough capital to START over, in any fashion. Legally call this community service.
Posted on: Thu, 16 Jan 2014 17:54:36 +0000
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