It got the DOW to surge above 10,000 for the first time in a year; what was it?
Well…
JPMorgan Chase & Co. posted its highest profit since the subprime mortgage market collapsed in 2007, relying on a surge in investment-banking revenue to weather higher losses on consumer loans…
…The investment-banking unit generated $1.92 billion in profit during the quarter, or more than half the bank’s total…
..Profit in the corporate and private-equity business was $1.29 billion, compared with a loss of $1.78 billion last year, because of trading gains on investments…
Woohoo!!! What a performance! Everything is going perfect! Except…
…The retail bank posted net income of $7 million, a decline of $57 million from a year earlier, as the bank set aside more money to cover credit losses. Home-equity charge-offs climbed to $1.14 billion from $663 million and are expected to reach about $1.4 billion “over the next several quarters,” the bank said in slides posted on its Web site. Prime-mortgage losses rose to $525 million from $177 million.
Credit cards, a division Dimon has said is unlikely to make money this year or next, lost $700 million, compared with income of $292 million in the third-quarter of last year. The net charge-off rate, excluding some bad loans acquired in the takeover of Washington Mutual, climbed to 9.41 percent, from 8.97 percent in the second quarter and 5 percent in the year- earlier period.
Card Forecast
Dimon said on the conference call with analysts that credit cards may lose $1 billion in the first quarter.
“The capital markets portion of the industry was very strong in the quarter, while there are continued problems in the traditional banking part of the company…(emphasis added)
So, what happened? A large bank played around with stocks and made a huge profit during a big sucker rally … meanwhile, what it normally does for a living was a complete disaster and is expected to get worse. And this means that unless the stock market continues to climb, J P Morgan will be in very deep doo-doo.
Oh, and the good news from China? Exports were only 15% lower than last year…this is considered good because it wasn’t a 21% drop…
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