Using Veritas to Construct the "Per…

29-04-2017 Hits:84563 BoomBustBlog Reggie Middleton

Using Veritas to Construct the "Perfect" Digital Investment Portfolio" & How to Value "Hard to Value" tokens, Pt 1

The golden grail of investing is to find that investable asset that provides the greatest reward with the least risk. Alas, despite how commonsensical that precept seems to be, many...

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The Veritas 2017 Token Offering Summary …

15-04-2017 Hits:79034 BoomBustBlog Reggie Middleton

The Veritas 2017 Token Offering Summary Available For Download and Sharing

The Veritas Offering Summary is now available for download, which packs all the information about Veritas in a single page. A step by step guide to purchasing Veritas can be downloaded here.

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What Happens When the Fund Fee Fight Hit…

10-04-2017 Hits:78884 BoomBustBlog Reggie Middleton

What Happens When the Fund Fee Fight Hits the Blockchain

A hedge fund recently made news by securitizing its LP units as Ethereum-based tokens and selling them as tradeable (thereby liquid) assets. This brings technology to the VC industry that...

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Veritaseum: The ICO That's Ushering in t…

07-04-2017 Hits:83362 BoomBustBlog Reggie Middleton

Veritaseum: The ICO That's Ushering in the Era of P2P Capital Markets

Veritaseum is in the process of building peer-to-peer capital markets that enable financial and value market participants to deal directly with each other on a counterparty risk-free basis in lieu...

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This Is Ground Zero for the 2017 Veritas…

03-04-2017 Hits:79932 BoomBustBlog Reggie Middleton

This Is Ground Zero for the 2017 Veritas Offering. Are You Ready to Get Your Key to the P2P Capital Markets?

This is the link to the Veritas Crowdsale landing page. Here is where you will be able to buy the Veritas ICO when it is launched in mid-April. Below, please...

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What is the Value Proposition For Verita…

01-04-2017 Hits:82243 BoomBustBlog Reggie Middleton

What is the Value Proposition For Veritas, Veritaseum's Software Token?

 A YouTube commenter asked a very good question that we will like to take some time to answer. The question was, verbatim: I've watched your video and gone through the slides. The exchange...

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This Real Estate Bubble, Like Some Relat…

28-03-2017 Hits:53217 BoomBustBlog Reggie Middleton

This Real Estate Bubble, Like Some Relationships, Is Complicated...

CNBC reports US home prices rise 5.9 percent to 31-month high in January according to S&P CoreLogic Case-Shiller. This puts the 20 city index close to an all time high, including...

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Bloomberg Chimes In With My Warnings As …

28-03-2017 Hits:81239 BoomBustBlog Reggie Middleton

Bloomberg Chimes In With My Warnings As Landlords Offer First Time Ever Concessions to Retail Renters

Over the last quarter I've been warning about the significant weakness in retailers and the retail real estate that most occupy (links supplied below). Now, Bloomberg reports: Manhattan Landlords Are Offering...

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Our Apple Analysis This Week - This Comp…

27-03-2017 Hits:81251 BoomBustBlog Reggie Middleton

Our Apple Analysis This Week - This Company Is Not What Most Think It IS

We will releasing our Apple forensic analysis and valuation this week for subscribers (click here to subscribe - lowest tier is the same as a Netflix subscription). As can be...

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The Country's First Newly Elected Lame D…

27-03-2017 Hits:81053 BoomBustBlog Reggie Middleton

The Country's First Newly Elected Lame Duck President Will Cause Massive Reversal Of Speculative Gains

Note: Subscribers should reference  the paywall material here for stocks that should give a good risk/reward scenario for bearish trades. The Trump administration's legislative outlook is effectively a political desert, with...

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Sears Finally Throws In The Towel Exactl…

22-03-2017 Hits:86901 BoomBustBlog Reggie Middleton

Sears Finally Throws In The Towel Exactly When I Predicted "has ‘substantial doubt’ about its future"

My prediction of Sears collapsing once interest rates started ticking upwards was absolutely on point.

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The Transformation of Television in Amer…

21-03-2017 Hits:84919 BoomBustBlog Reggie Middleton

The Transformation of Television in America and Worldwide

TV has changed more in the past 10 years than it has since it's inception nearly 100 years ago This change is profound, and the primary benefactors look and act...

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I, Reggie Middleton, challenge the mainstream media to think independently. I challenge them to dig down, past the sterilized, politically correct soundbites proffered by popular corporate management, you know - the "in crowd". I challenge the MSM to pull out a calculator, run through the reported numbers, and actually ascertain if what is being proferred by managment actually correlates with the numbers offered to the regulatory agencies. I know some of the finance stuff can get arcane, but their are many objective parties to turn to for assistance. Unfortunately, they are very rarely consulted. I see the favored names in the media, but rarely do I see objective opinion. 

Below is a snippet of headlines that I pulled from a Google news search for the phrase JP Morgan.

Keep these newsbites in mind as I go over what I gathered from JP Morgan's latest results.

JP Morgan - 3Q09 Results and Outlook

Our modelled results were pretty much on point with JP Morgan's actual Q309 reported results - see

The tough economic environment is still gripping the traditional banking operations of US banks and JP Morgan's 3Q09 fail to provide light at the end of the tunnel. As a matter of fact, if is arguable that for those that do perceive a light, it is that of a freight train coming to run over the observer. The credit deterioration impact on JP Morgan, however, has been moderated by the gains from trading revenues which provided more than adequate cushion to absorb the high credit losses from the traditional banking operations.

The major support for JP Morgan came from increase in revenues from principal transactions (including trading revenues of investment banking and corporate/private equity division) which led non-interest revenue to increase to $13.8 billion in 3Q09 from $12.9 billion in 2Q09 and $5.7 billion in 3Q08. In 3Q09, non interest revenues accounted for 52.2% of the total net revenues against 50.6% in 2Q09 and 39.0% in 3Q08. 

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Revenues from principal transactions increased to $3.8 billion in 3Q09 from $3.1 billion in 2Q09 and negative $2.7 billion in 3Q08. The revenues from principal transactions of investment banking increased to $2.7 billion in 3Q09 from $1.8 billion in 2Q09 and negative $922 million in 3Q08 while the revenues from principal transactions of corporate/private equity division was $1.1 billion in 3Q09 against $1.2 billion in 2Q09 and negative $1.9 billion in 3Q08. The year-on-year change in trading revenues in the investment banking division was primarily owing to gains in the fixed income investments including legacy leveraged loans and mortgage related positions of $400 million against mark downs of $3.6 billion in 3Q08. However, the high trading revenue comes at a cost of high market risk which is reflected in higher VaR levels. The fixed income VaR has increased substantially and stood at $243 million at the end of 3Q09 against $183 million at the end of 3Q08.

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Net interest income increased marginally to $12.7 billion from $12.6 billion in 2Q09 and $9.0 billion in 3Q08 primarily on account of improvement in net interest margin. The net interest margin increased to 3.40% in 3Q09 from 3.37% in 2Q09 and 3.06% in 3Q08 as decline in average rates on interest bearing liabilities exceed the decline in yield on interest earning assets.

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However, the tough credit environment and cautious lending is leading to a shrinking loan portfolio which is leading shrinking interest earning assets. JP MORGAN's total loan portfolio contracted 14.2% (y-o-y) and 4.0% (q-o-q) in 3Q09. In essence, the most esteemed of the commercial banks is actually shrinking its commercial banking activities as its investment banking and trading activities skyrocket. Most lay persons may not realize that this is not your toaster for a savings account institution anymore. In addition, the significantly greater risks born from rampant trading activities fall directly upon an already insolvent FDIC (see "I'm going to try not to say I told you so...".) and in addition apparently significantly disadvantages those smaller banks that failed to take the outsized risks of their larger, Wall Street connected brethren, see "Big Bank (and the Treasury) vs. Little Bank: Whose risking your tax dollars?".

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Credit conditions continue to deteriorate as the delinquency rates continue to climb and the non-performing assets continue to surge. The housing crisis continues to play out in the form of spiralling delinquency rates with the 30 day+ delinquency rates for the consumer lending rising to 5.85% in 3Q09 from 5.22% in 2Q09 and 3.16% in 3Q08. The implications of the rising unemployment are reflected in the rising 30 days+ delinquency rates for credit card which touched 5.99% in 3Q09 against 5.86% in 2Q09 and 3.91% in 3Q08. The acquired WaMu portfolio is deteriorating much more rapidly. The 30 days+ delinquency rates for WaMu's credit card portfolio reached 12.44% in 3Q09 against 11.98% in 2Q09 and 7.53% in 3Q08. The delinquency rate for acquired credit-impaired loans from WaMu transaction was 25.56% in 3Q09 against 23.37% in 2Q09 and 13.21% in 3Q08. These are literally outrageous rates of capital destruction!

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Non performing loans increased to $17.7 billion (2.72% of total loans) at the end of 3Q09 from $14.7 billion (2.17% of total loans) at the end of 2Q09 and $6.9 billion (0.91% of total loans) at the end of 3Q08. Total non-performing assets increased to $20.4 billion (3.12% of total loans) from $17.5 billion (2.57% of total loans) at the end of 2Q09 and $9.5 billion (1.25% of total loans) at the end of 3Q08.

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As a result of high delinquencies and NPA levels, loan losses continue to remain at high levels and show no signs of easing. The gross charge offs increased to $6.6 billion (annualized charge off rate - 4.1%) in 3Q09 from $6.3 billion (annualized charge off rate - 3.7%) in 2Q09 and $2.7 billion (annualized charge off rate - 1.4%) in 3Q08 while the provisions for loan losses were $8.0 billion in 3Q09 (annualized rate - 4.9%) against $7.9 billion (annualized rate - 4.7%) in 2Q09 and $5.7 billion (annualized rate - 3.0%) in 3Q08.

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Non interest expense was $13.4 billion against $13.5 billion in 2Q09 and $11.1 billion in 3Q08. The increase in trading revenues trickled down to the bottom line resulting in net income increasing to $3.5 billion in 3Q09 from net income of $2.7 billion in 2Q09 and a loss of $54 million in 3Q08. Diluted EPS in 3Q09 was $0.82 per share against $0.28 per share in 2Q09 and $0.11 in 3Q08. Excluding these revenues, the JP MORGAN's operations portray a very dismal performance - reflecting shrinking loan base, rising loan losses and declining asset yields with minimum probability for net interest margin increase in short-to-medium term (off Fed's near zero rate interest policy).

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 Relevant links of interest:

 

For those who want to hear alternative, non-MSM love fest discussion of Jamie Dimon, JP Morgan and their proximity to Geithner and the Fed, see this clip from Bill Moyers. If any of you know Jamie Dimon personally, you should fast forward to 6:25 into the video, where it appears as if he seems to have actually threatened a Congressmember. She didn't appear too intimidated, though.   

 Next up - Wells Fargo!