Detailed reports from Meredith Whitney Advisors were not available plus there were no comments on the summary, just some fundamentals chart.

“The market appeared to express reservations presumably stemming from an increase in its mortgage repurchase reserve build and continued high levels of litigation accruals. While these issues create near term headwinds, we believe JPM’s now more than 3 billion repurchase reserve should allow the pace of its build to moderate over the next couple of quarters and do not see its current legal challenges materially impacting its earning power outlook”.  – Barclays capital.

In regards to the forward looking statements. “It noted that as its card losses normalize in the 4.5% area then another $4-$6 billion reserve release is possible” – Barclays

“JPM released $1.5 billion of reserves in card services and continued to under-provision in aggregate: additional future reserve releases are likely, in our view”- WFC

“JPM believes foreclosure matter a short term challenge”.”JPM is currently reviewing approximately 115,000 files currently in the foreclosures process and noted that by the time a foreclosure sale occurs a borrower is 14 months delinquent(with New York averaging 26 months and Florida Averaging about 23 Months).”-WFC

“Trading at just 4x our 2012 EPS estimate, we believe wfc shares are the most compelling within our large cap bank universe.” -  Stifel Nicolaus.

Here my public and subscription-only comments on JPM. Notice that I focus on issues that rarely, actually practically never appear in the sell side and large equity research house reports:

• Four Facts That BANG JP Morgan That You Just Won’t Hear From The Sell Side!!! Friday, October 22nd, 2010
• JPM 3Q 2010 Forensic Update (subscription only)
• JP Morgan’s 3rd Quarter Earnigns Analysis and a Chronological Reminder of Just How Wrong Brand Name Banks, Analysts, CEOs & Pundits Can Be When They Say XYZ Bank Can Never Go Out of Business!!!

Older yet still quite relevant research:

• The full JPM Q2 review can be downloaded by subscribers here: JPM 2Q10 review
• The JP Morgan Professional Level Forensic Report (subscription only)
• The JP Morgan Retail Level Forensic Report (subscription only)
• Those that don’t subscribe still have a lot of BoomBustBlog JPM opinion and analysis to chew on, including a free, condensed (but still about 15 pages) version of the forensic analysis above. You can find it below this pretty graphic from “An Unbiased Review of JP Morgan’s Q1 2010 Results Yields Less Roses Than the Maintream Media Presents“…
• 

1. An Independent Look into JP Morgan (subscription content free preview!)
2. If a Bubble Bubble Bursts Off Balance Sheet, Will Anyone Be There to Hear It?: Pt 2 – JP Morgan
3. Is JP Morgan Taking Realistic Marks On Its WaMu Portfolio Purchase? Doubtful!
4. Anecdotal observations from the JP Morgan Q2-09 conference call
5. Reggie Middleton on JP Morgan’s Q309 results
6. Reggie Middleton on JP Morgan’s “Blowout” Q4-09 Results

Comments on WFC

“Positives for the quarter included strong mortgage banking results coupled with a solid pipeline looking out, lower loan losses and expectations for continued loan loss reserve release, and improved capital ratios with an eye toward a possible dividend increase when the industry returns to that path. The company appeared unfazed by recent mortgage repurchase concerns and downplayed risks associated with private securitization where WFC originated the loan.”- Barclays Capital

“with respect to private securitizations where WFC originated the loan and therefore has some repurchase risk (~$140 B), 55% are from vintage 2005 and prior 83% are prime, and it had $69 million of repurchases in 3Q10”-Barclays

“WFC expects the issue to be manageable as only 8%($145 bil) of the portfolio is private label MBS and of this, 83% is prime jumbo. Mortgage repurchase expenses declined a tad qoq but losses up sharply and therefore repurchase reserve declined. Similar to peers WFC is seeing about 50% approval rate and 50% loss severity.- jpm

“Based on management discussion…..The Company would have a $1.25 billion loss tax-affected loss exposure on its $144 billion in private label originations. We simply applied delinquency rate of 10% on the prime portion of these loans and a delinquency rate of 39% on the non-prime and then assumed a 20%successful loan put back rate and a 50%loss severity on loans repurchased.- Stifel Nicolaus

I am still working on the Wells Fargo updates. Our research from 2008 ran contrary to the entire sell side, and as we predicted WFC took a very big dive, producing profits for the bears. Subscribers, see WFC Research Note Sep 2009 2009-09-30 13:01:30 281.29 Kb, ~ WFC Off Balance Sheet Exposure 2009-10-19 04:25:53 258.77 Kb ~ WFC Investment Note 22 May 09 – Retail 2009-05-27 01:55:50 554.15 Kb ~ WFC Investment Note 22 May 09 – Pro 2009-05-27 01:56:54 853.53 Kb ~ Wells Fargo ABS Inventory 2008-08-30 06:40:27 798.22 Kb to expound on our opinions of Wells Fargo, below.

Comments of GS

“Seperately, management also provided some color around the recent foreclosure/mortgage industry issues and potential impacts on the business noting that they were not a very big player in either the origination business (40^th largest originator from 2005 – 2008  originated 30B and GS originated $1.75 B) or the securitization business (not in top 5)- Deutsche bank

“Interestingly, we noticed a 1/3 decline in currency VaR during the quarter, suggesting to us that the firm has stepped back meaningfully from FX trading” –Barclays

The firm continue to see outflows from its asset management business, with the highest outflow from equity funds ($8B or 6%)”-Barclays

The long term picture looks positive for GS being a winner in a world of high frequency trading ability in a more transparent/ cash –like fixed income world considering its strong technology.”JPMorgan Cazenove

Comp accrual needs to be adjusted in Q4. Clearly GS might adjust its comp in 4Q-as it did last year reducing the accrual level from 47%in 9M09 and paid out 36% for FY 2009, adjusting 2009.We estimate FY 2010 comp/revenue ratio to come down to 39% through adjustment  in Q4 compensation expense and expect comp/revenue ratios of 40% in 2011E and 2012E.- JPM

• A Few Questions on Goldman Sachs 3rd Quarter 2010 Results That No One Thought to Ask
• The BoomBustBlog Review of Goldman Sach’s 2nd Quarter, 2010 Performance: I Told You So!
• GS 3rd Quarter 2010 Update (subscription only)
• Can You Believe There Are Still Analysts Arguing How Undervalued Goldman Sachs Is? Those July 150 Puts Say Otherwise, Let’s Take a Look” and “When the Patina Fades… The Rise and Fall of Goldman Sachs???“
• On Goldman’s Latest Earnings Results…
• What Do Goldman Sachs and B.B. King Have in Common? The Thrill is Gone…
• A Realistic View of Goldman Sachs and Their Latest Quarterly Results
• The Brown Stinky Stuff is Splattering Off the Fan Blades and Landing on That Shiny New Building on the West Side Highway.
• No One Can Say I Didn’t Warn Them About Goldman Sachs, Several Times…
• Subscribers can find our most recent Full Forensic report on Goldman Sachs here - GS 4Q09 Final Review and Updated Valuation, current as of January 2010, the month I started reiterating my warnings about this company’s drastic overvaluation.
• Reggie Middleton vs Goldman Sachs, Round 2

Comments on MS

Revel marked down again-but future risk is limited. As a result of MS’ decision to sell its Revel real estate development in Atlantic City, MS updated its view on the worth of the investment driving a write-down of about $200M. MS noted that valuations for the partially completed casino property are driven by valuations related to the gaming industry than valuation trends in CRE markets.  The current carrying value is approximately $40 MM at present”- WFC

“our preference is for GS over MS. So why is MS an OW? The simple answer is that we view the stock as cheap. It Trades at 0.8x fully diluted tangible BV 2012 E, for RONAV ex own debt of 10%. With MS  GWM an important earnings deriver going forward , no capital issues , and a cleaned up structured credit book – franchise re-rating is possible over the long term , in our view.” Barclays

Equities were solid considering MS had no material hedging losses in Equity Derivatives in 2Q and expected to hence have limited gains in 3Q compared to peers(see gs 2Q vs 3Q)

My Morgan Stanley update should be available to subscribers in about 48 hours. Below is my historical opinion...

Trading revenues account for 37% (TTM basis) of total net revenues of Morgan Stanley and fluctuations in this line item can significantly influence the revenues and profitability of the company. The effect of high volatility of trading revenues has trickled down to its net revenues and earnings and the same is reflected in the chart below:

We have uncovered hints of solvency stress (considerably more so than that of Goldman’s) and the usual high risk after pouring over Morgan’s books. All paying subscribers can download our analysis and view of MS’s latest results below (click here to subscribe):

• MS 2Q10 review
• MS 1Q10 Review (351.75 kB 2010-05-24 09:43:31). Historical MS analysis and valuations may downloaded as follows:
• MS 4Q09 results (275.43 kB 2010-01-28 04:38:11)
• MS Simulated Government Stress Test (2.49 MB 2009-05-05 11:36:25)
• MS Stess Test Model Assumptions and Stress Test Valuation (339.99 kB 2009-04-22 07:55:17)

Comments on Google

“We believe 3Q10 results and increasing evidence that display and mobile are becoming more material drivers will help bring investors back to Google shares. -Barclays

What concerned us- heavy capex spending/heavy headcount additions/4Q  CPC facing tougher comps.

What surprised us – Google Instant has Minimal Revenue impact - Barclays

“While we knew there was tremendous momentum in the world of mobile (more especially the Android O/S) and display advertising (Doubleclick Exchange and YouTube/video), it now appears Google has clearly become a three headed monster in terms of paid search via  desktop internet, display advertising as well as advertising in the rapidly growing Smartphone world.- Deutsche Bank

“Google no longer a one trick pony - Jefferies

My question is, where were the bullish comments BEFORE earnings and throughout all of last quarter.We first turned bullish on Google in June and got the full forensic report well before earnings.

I strongly urge all paying subscribers to read and reread the longest forensic analysis that I have ever released (@63 pages): Google Final Report, as well as the An Analysis and Valuation of Google’s Android and AdMob. Professional subscribers are strongly urged to play with all of the market and valuation models that we have to offer (click here to subscribe or upgrade):

• Google Valuation Model (pro and institutional).
• Smartphone Market Model – Blog Download Version – all paying subscribers
• Mobile Operating System Market Share Model – all paying subscribers – This model is key to showing the trends across operating systems, and not just handset manufacturers.

This carries on with the strong performance of the Research in Motion Analysis, which I am now giving away for free since it has hit our initial price point, see The Research In Motion Forensic Valuation and Analysis is Released to the Public. …

Google has devised a stratagem to literally knock the ball out of the park. Knowing how bearish I am on the US equities market, this should be saying a lot coming from me.

1. The Mobile Computing and Content Wars: Part 2, the Google Response to the Paradigm Shift
2. This article should drive the point home: An iPhone 4 Recall Will Hurt Apple More By Opening Additional Opportunity for Android Devices Than Increased Expenses
3. A First in the Mainstream Media: Apple’s Flagship Product Loses In a Comparison Review to HTC’s Google-Powered Phone
4. Android is gaining preference as the long-term choice of application developers
5. Math and the Pace of Smart Phone Innovation May Take a Byte Out of Apple’s (Short-lived?) Dominance
6. Android Now Outselling iOS? Explaining the Game of Chess That Google Plays in the Smart Phone Space
7. How Google is Looking to Cut Apple’s Margin and How the Sell Side of Wall Street Will Enable This Without Sheeple Investor’s Having a Clue
8. Empirical Evidence of Android Eating Apple!
9. More of the Android Onslaught: Increasing Handset Revenues and Growth
10. The Complete, 63 pg Google Forensic Valuation is Available for Download
11. iSuppli Continues to Validate BoomBustBlog’s Original Thesis: Android as the Viral Game Changer!
12. BoomBustBlog Research Hits Another One Out the Park! Google up nearly 10% after hours, true blowout earnings unlike JPM
13. Reggie Middleton Wasn’t the ONLY Openly Apple Bear in the Blogoshpere, Was He?
14. A Quick Peek Into the REAL WORLD Logic That Went Into Building the BoomBustBlog Apple Model: It’s Called Compression!!!

Of course, many of these observations above may not be surprising to some, since the best performing sell side analyst during this time period (save yours truly, of course) only racked up 38% in accurate calls: Did Reggie Middleton, a Blogger at BoomBustBlog, Best Wall Streets Best of the Best?

Those interested in subscribing to BoomBustBlog should click here.