August 10, 2011
JP Morgan’s (JPM) CEO, Jamie Dimon was interviewed on CNBC this afternoon and made some very interesting comments. Below is a recap of some of those comments:
- “We’re not planning to charge for deposits” This comes after rumors and speculation that several banks were planning to charge around 13 basis points for funds deposited. Meaning that for every $1,000 deposited you would be charged $1.30. While that doesn’t seem incredibly high, it is extremely lucrative that the banks get to charge you for the money you deposit and then also utilize that money to loan out and make a profit. Banks are currently paying some of the lowest interest rates on deposits and now they are charging to hold your money.
- “Very Optimistic in the long run” Read more
October 4, 2009
Guest: Satyajit Das discusses the ins and outs of banking finance. How long can they continue to live off of government subsidies? What are the real inner workings and can we trust investing in them. We also touch on world finance as well as backdoor financing of the FDIC’s $50 billion shortfall.
December 31, 2008
There is an interesting battle going on. On one side is the tag-team of the Fed and the Treasury. On the other is corporate America’s ability to maintain profitability in the face of this severe downturn. Sometimes they are working together with a common goal, while other times they seem at odds.
Take a read of this interesting discussion from Jon Markman’s Strategic Advantage Newsletter (Also, definitely take him up on the 2-week free trial):
Earnings in the sink
Last week, we talked about the potential for continued broad-market weakness as the hotshot analysts on Wall Street continue to slash earnings forecasts in line with deteriorating economic conditions. These new estimate cuts will sour sentiment, inflate P/E multiples and generally make life difficult for the bulls trying to bust the market higher out of the Read more
March 18, 2008
In the earnings news today, Lehman (LEH) Reports Q1 (Feb) earnings of $0.81 per share, $0.09 better than the First Call consensus of $0.72; revenues fell 30.5% year/year to $3.51 bln vs the $3.35 bln consensus. What is meant by the word certain?
LEH says liquidity pool of $34 bln and unencumbered assets of $64 bln, with an additional $99 bln at regulated entities, at quarter end. Net revenues for the first quarter of fiscal 2008 reflect negative mark to market adjustments of $1.8 bln, net of gains on certain risk mitigation strategies and certain debt liabilities.
Now for the bad news:
The Firm’s pre-tax margin was 18.9% for the first quarter of fiscal 2008, compared to 33.7% for the first quarter of fiscal 2007.
Shareholders are not going to be happy with this:
Return on average common equity was 8.6% for the first quarter of fiscal 2008, compared to 24.4% for the first quarter of fiscal 2007.
Still looking rough:
Return on average tangible common equity was 10.6% for the first quarter of fiscal 2008, compared with 29.9% for the first quarter of fiscal 2007.
That is a relief. So, if we calculate the value based on current accounting principals, the stock should be a buyout candidate close to… $3, $4 or maybe $50?:
Book value per common share was $39.45.
The point is that do we really think that any of this matters right now? I can’t make heads or tails of it, can you?
Disclosure: Clients of Horowitz & Company do not hold positions mentioned as of the date of publish.
March 18, 2008
Goldman (GS) Reports Q1 (Feb) earnings of $3.23 per share, $0.65 better than the First Call consensus of $2.58; revenues fell 22.4% year/year to $8.34 bln vs the $7.47 bln consensus
Lehman (LEH) Reports Q1 (Feb) earnings of $0.81 per share, $0.09 better than the First Call consensus of $0.72; revenues fell 30.5% year/year to $3.51 bln vs the $3.35 bln consensus.
Lehman Brothers Chief Global Fixed Income Strategist, John Malvey is looking for a 100bps cut in rates. 75bps would be fine, but 100bps would be better. Without blinking, he said, “why not go for it already.” The authorities had no alternative as went on to discuss that this was not a bailout…rather it is an intervention. (I feel better!)
Once again, it is curious as to why the Fed is waiting so long to act if it is in fact an intervention. As I had previously coined and commented on the Milli Vanilli Government, it is still worrisome that many of the actions handed down from above by the holy of holey, a.k.a. the Father of Economic Decisions (F.E.D.) have been reactive rather than proactive.
Goldman reported a not so surprising revenue result, pushing it up in pre-market. $3.23 vs $2.58 with losses on residential mortgages approaching $1 billion. Once again, many of the financial stocks have been trading similar to how the retail stocks did, just a few weeks ago. There was a feeling (fear) that removed any support from the markets on Monday. Now, a sigh of relief is going to be in the air and investors will thrust financial stocks higher. Goldman is up on the report that they have gained a good deal of assets as many institutions moved their accounts during the the past quarter.
In pre-market trading, Lehman is flying on similar earnings news, and so goes the rest of the brokers and banks. The better news is coming at an important juncture. Today could shape up to be forever known as; the day the financials were saved. Frankly, without massive relief efforts, I cannot see how they would have saved themselves. Yet they live for another day, another foreclosure and another rate cut.
Thank you to our Great Father of Economic Decision, thanks to the earning’s resuscitation team and thanks to all of the millions of dollars from U.S Taxpayers that have helped to make this all possible. We are really wonderful and selfless. Let’s all stand up and take a bow and give ourselves a round of applause.
From Briefing.com: Goldman Reports Q1 (Feb) earnings of $3.23 per share, $0.65 better than the First Call consensus of $2.58; revenues fell 22.4% year/year to $8.34 bln vs the $7.47 bln consensus. Assets under management increased 21% from a year ago to a record $873 bln, with net inflows of $29 bln during the quarter.
Net revenues in FICC were $3.14 bln, 32% lower than a strong 1Q07 as results were adversely affected by continued deterioration in the broader credit markets. Net losses on residential mortgage loans and securities were approximately $1 bln. In addition, credit products included a loss of approximately $1 bln ($1.4 bln before hedges) related to non-investment-grade credit origination activities, as well as lower results from investments compared with the first quarter of 2007. Net revenues in Trading and Principal Investments were $5.12 bln, 46% lower than the first quarter of 2007 and 26% lower than the fourth quarter of 2007. Book value per common share was $92.44 and tangible book value per common share was $80.28, each increasing 2% during the quarter. “Market conditions are clearly very difficult… But we saw strong customer activity across many of our franchise businesses in the first quarter.
I believe that Goldman is not the benchmark, but rather one of the exceptions. Only time will tell.
Disclosure: Clients of Horowitz & Company do not hold positions in securities mentioned as of the date of publish.