JPM put aside $4 BILLION to credit reserves this past quarter - - - which is now up to $28 billion and 4.5% of assets. As a result, they were pretty conservative and "under-announced" their earnings.
Landis is making the best points. First off a 10% charge off is dick when your average performing account pays you 10% a year in juice. Weirdly credit cards are one of the few loans that via their high interest rates accurately reflect the risk to issuers. Secondly California real estate by any metric is improving. I started a thread here last weekend with some data showing how the home affordability index in Cal has soared on the decline in values. The SoCal guys here will be the first to attest that prime coastal areas from Santa Barbara to Del Mar have seen only the most token concessions from the 2007 highs. Basically prices have filled in back to 2004 levels and there's support-at least for now-at those valuations.
Can you give me the utube name guy who did this? I would like to see his others but I can't find this on utube.
I will be the first to say JPM is a decent bank whose CEO doesnt lie much. However the stock seems totally mispriced. They earned 0.40c, this is a 51 PE ratio. The market seems to be excited about the chance of the next year consensus of $2.57(low estimate $1.05) What they are missing is that without JPM hedge fund business(IBanking) they would have earned almost nothing, plus there is little hope unemployment/home prices will stop getting worse, so they will depend on massive returns from IBanking to get there Meanwhile massive regulation has been signaled for so long that anyone who is long banking shares thinking ROE wont drop for decades must be trying to lose money
Maybe a few numbers are improving/bouncing around but Roggoff research of 18 banking crisis show that real house prices only come back after 5-6 years. I have a hard time believing the single worst US estate will put a bottom in one year and half(IIRC CA prices only started to go down mid 07). Maybe I'm wrong but I sure heck got the odds behind my back
I don't know what prices will do in the future. I'm bearish only because I think rates could spike. But as things look now I don't see a lot of mega supply in desirable SoCal neighborhoods. It seems every time I save a competitively priced home on L.A.'s Westside in my "favorites" it's gone within days-often at a price higher than list. Lately though I've seen sellers being a bit more aggressive so I don't discount that the bid could "trade out". I lived in NYC back in 92=93 and I thought the end of the world for Manhattan prices was in hand too-my view was the fade of a lifetime. Bottom line there's 300 million people in America and if it were affordable 250 million of them would be trying to buy into Brentwood....
Pabst, I think my $1210.00 per month one bedroom apartment across the street from the World Trade Center ( back in 1991 ) now goes for around $2500.00 Gotta love a place where your housing expense has doubled, and the city income tax is now up to 4.00% :eek: