The Myth Of JP Morgan's Profits - Humpty Dumpty Lives

I just want to make a few comments here before heading off to lunch. I just spent a few minutes perusing JP Morgan's filing with the SEC. JP Morgan just announced great earnings this morning. Or so we are told.

JP Morgan's core banking business continues to deteriorate while almost all profit was made in investment banking and trading. For anyone who understands these two businesses, they are almost exclusively capital-consuming entities. In other words, they drain money out of the economy by transference of wealth. They are effectively a tax. They contribute absolutely nothing to an economic recovery. N-o-t-h-i-n-g!

If I scroll down their 8K filing to look at some of the real data behind the hype, in other words, the core banking business, the reality is much different. Remember, you and I pay the FDIC and the Federal Reserve to regulate and administer JP Morgan as a deposit institution to protect our savings. In other words, what we should care about as a society is their banking business. JP Morgan the bank is marginally profitable. They are only profitable at all because the American taxpayers are holding the bag for their asinine mistakes. The core banking business is actually seeing a continued increase on nonperforming loans. In other words, the economy is still deteriorating. Additionally, I personally don't believe JP Morgan has allocated enough money to future loss reserve requirements, thus artificially inflating the health of that business and its earnigns. In other words, the economy is more sick than it has ever been according to JP Morgan's own data.

If the government would institute real financial reform to Wall Street, these firms would fall like humpty dumpty. Instead, they continue to allow these gambling casinos to suck capital out of the American economy at an alarming rate. Enjoy the stellar earnings results from this fine Las Vegas institution!