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Money Daily has been providing business and financial market news, views, and coverage on a nearly continuous basis since 2006. Complete archives are available at moneydaily.blogspot.com.
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JP Morgan, Citi, Wells Fargo Blow Out Q4 Results on Lower Credit Loss Reserves
Friday, January 15, 2021, 9:26 am ET
The rich get richer.
JPM Q4 Results
Earnings per share (adjusted): $3.79 vs. $2.62 per share expected
The largest US bank by assets delivered net income of $12.1 billion, or $3.79 per share, up 42% from a year ago. Those results included $2.9 billion of credit reserve releases, resulting in a 72 cent increase in earnings per share, and boosted by surges in markets revenue and investment banking fees.
The bank reported a net benefit of $1.89 billion in credit reserves, but maintains a reserve topping $30 billion ‹ reflecting what the CEO Jamie Dimon called "significant near term uncertainty" as coronavirus cases surge worldwide.
Credit card holders, people with car loans, student loans, personal loans, mortgages get deferrals (skip payments) with interest tacked on. Shareholders get dividends. Executives get huge bonuses. Landlords get shafted on rents. You get $600.
These banks have been fined billions of dollars since the sub-prime scandal of 2008-09.
Here is a partial list of JP Morgan's fines for criminal activity from 2009-2014. The amounts are staggering.
Where does the money go? Good question. To the government, into a slush fund perhaps, and maybe to pay off crooked legislators, judges, and lobbyists who let them get away with such behavior.
The Federal Reserve, under the CARES Act stimulus bill passed last May, gave the banks carte blanc to underreport their loan loss reserve provisions through December 31, 2020 and allows them to report the accurate amounts gradually, over a period of three years. In some circles, that's called fraud. In the banking universe, it's business as usual.
Soon, it's going to come crashing down upon their heads.
President Trump has declassified Obamagate documents:
The Plan to Save the World
At the Close, Thursday, January 14, 2021:
Thursday, January 14, 2021, 9:09 am ET
Anybody professing to knowing what's going on is either lying or kidding themselves.
Why was it so important to impeach President Trump when he's supposedly leaving office in a week?
Why did the Democrats stage the assault on the Capitol building in the first place?
Why are there 20,000 National Guard troops in DC when there's no actual threat?
Why was a poster calling for armed marches on the Capitol and all 50 state houses circulated?
Who is responsible for creating the poster? No group has taken credit.
Why is Christine Lagarde so worried about bitcoin?
Why have gold and silver languished during this crisis?
Who is Q?
Why did Mitch McConnell, as soon as the House voted to impeach, say that the Senate would not be able to start a trial before the inauguration (January 20)?
Why does the mainstream media lie all the time?
Where is Nancy Pelosi's laptop and what's on it?
Why was it so important for Twitter to shut down the president's account and for Google, Apple, and Amazon to take down Parler?
Why has President Trump, since he was de-platformed by Twitter, been so eerily silent?
Why, in the first place, was it so important to steal the presidential election and then cover it up?
There are too many questions and not enough answers. It's OK to be angry. Don't go to the inauguration or to any state capitols to protest. It's a trap.
Moments ago, initial jobless claims for the most recent week were reported ot have soared to 965,000, far beyond estimates of 770,000 and a huge jump from prior weeks.
The economy continues to stall, but Wall Street continues to act like everything is just fine, with all the major indices close to record highs.
The level of disconnectedness has gotten to a point at which there is no return, with the Federal Reserve leading the chorus of money printers and the US government planning to send out more, larger checks to the American people just weeks after doling out $600 each to every adult making less than $75,000 a year, plus another $600 for each dependent.
America's economy is being boosted only by artificial means. At some point, there's going to be hell to pay in terms of inflation and mass discontent from people who would rather work than accept government handouts.
The country - and the rest of the world - is at a precipice. Some answers will be forthcoming within days, but there will remain much skepticism, doubt, fear, and anger.
At the Close, Wednesday, January 13, 2021:
Wednesday, January 13, 2021, 9:09 am ET
It appears that the incredible rise of Bitcoin over the past two months is leveling off and there could be further downside, but, as is the case with just about any investment these days, downside risk is a clear and present danger whether it be stocks, fixed income, precious metals, commodities, or baseball cards. Bitcoin offers significant upside in relation to fiat currencies, so this recent stalling and roughly 28% drop is likley nothing to cause worry. Six months from now, this is likely to appear as nothing more than a blip on the longer-term radar screen.
Nothing in the current environment serves as a safe haven because there continues to exist extreme political pressure and lack of price discovery in many asset classes. Probably the most free from manipulation are cryptocurrencies like Bitcoin and Etherium, collectibles - which have their own immunity system built in from years of data and avid traders - and commodities, while on the other end are stocks (which only seem to go up) and precious metals (which only seem to go down).
Putting money to work in these times, where political, social, and financial events are being compressed into a tight-knit control regime, is challenging and possibly detrimental to longer-term goals. While it's difficult to focus beyond the horizon, it's what is keeping most sane investors from tearing out hair and running wildly down the street screaming "I can't take it any more."
Short-term, markets are very messy. In particular, the NASDAQ, guided, as it is by tech oligopolies like Google, Facebook, Apple, Amazon, and Microsoft (the FAAMGs) has seen days and weeks of erratic activity and recently has been whipsawed in the wake of the ongoing censorship purge.
At this moment, what's probably the best space for safety purposes is in collectibles. Coins, stamps, comic books, trading cards, art, antiques, and especially things that could actually have real life usefulness like depression-era glassware, sterling silver flatware, old tools, and so forth. Nobody knows, but in the case of a total global meltdown, those items that have useful applications could contribute as life-sustaining elements in addition to being prized possessions.
Outside of complete capitulation of the US dollar, collectibles maintain a unique posture among tradable assets. They're ultimately divisible - think baseball card collections - retain value well and, unlike many other assets mentioned here, have well-developed price discovery mechanisms.
So, instead of scouring stock boards, crypto messages, and coin shops, perhaps the best investments can be found at garage sales and flea markets. Aks anyone who collects anything tangible and they're sure to have a story about a great deal found at a thrift store, yard sale, or other off-the-beaten-path venue.
It pays to be diversified into several asset classes instead of the old 60-40 (stocks-fixed income) rule that many investment advisors are still employing for their clients. That's eventually going to fail. The new breed of investor is into all manner of asset diversification, with varied percentages of real estate, stocks, bonds, physical commodities, collectibles and art, crypto, and even sustainability items like solar panels (best ever hedge), canned goods, energy and water supplies.
This is a new world whether the deep state "Great Reset" comes to fruition or not. While the Klaus Schwaub adherents (download "COVID-19: The Great Reset" here [PDF] instead of paying for it on Amazon) feel comfortable in their castles in the sky above the rabble (us), there continues to be unrest among the populations being subjected to censorship, lockdowns, restricted movement, pushed to take unproven "poisonous" vaccines, and other nasty, harmful measures. The plebes are eventually revolt against the elite and that's not going to be pretty. It always happens. The ruling class overreaches and people just want to be left alone, so they're forced into rebellion. The natives, as they say, are restless.
In conclusion to today's mini-treatise on the human condition and implications for investors, keep thinking with a clear mind, don't let the mainstream media guide you because they are propagandists and liars, and be free to do your own things.
Here's a video from Altcoin Daily, focused on the relationship of mainstream media - specifically, CNBC's Jim Cramer - to Bitcoin. This is the first inclusion of a video from this source. Being that it's excellent, expect more in the future.
Just a note on the Cramer part of the video above: the mainstream, like the central banks (Fed, ECB, BOJ, etc.) have lost control of many elements of the financial system, such as interest rates. Bitcoin and crypto in general they have no control over, so all they can do is "jawbone." it's a sure sign of desperation that when things aren't going as they planned, they start to come out of hiding and into the light, making recommendations with faulty analyses, making spurious claims that cannot be supported by facts. It's best to fade them and stay ahead of the game.
At the Close, Tuesday, January 12, 2021:
Tuesday, January 12, 2021, 8:14 am ET
Publisher's Note: If you're seeing blank spaces on this page or other pages on dtmagazine.com, then Google is still attempting to de-monetize it. Downtown Magazine's relationship with Google dates back to 2003. We've been revenue partners through Adsense for most of those years, but apparently, our commentary isn't to their liking of late, even though we've not been informed of any issues. Google's ads on this site could be replaced in a heartbeat. We have other partners, but Google (used to) pay better and the blank spaces now serve as a badge of honor. Nobody likes censorship, except those who live in fear of the truth. Downtown Magazine has always been devoted to reporting and opining on the truth and will continue to do so. Since the main revenue source has been shut off, if you feel the urge, there's a donation link in the left column. Any amount is appreciated. A few bucks from a few people would likely exceed what Google used to pay. As long as there are blank spaces on this page and Google continues its purge of the truth - not just here, but widespread - this note will appear atop every Money Daily post.
First the good news:
People like Mark Zuckerberg, CEO of Facebook, and Jack Dorsey, CEO of Twitter, will probably never be able to go out in public without bodyguards. They've censored tens of thousands of voices with their anti-free speech policies and people aren't happy about it. The first amendment guarantees freedom of speech in America. Those guys are enemies of free speech.
Appropriately, Twitter (TWTR) stock was down more then six percent on Monday. Facebook (FB) was off 4.01%. Fellow travelers at Google (GOOG), Apple (AAPL) (each of which killed the Parler app in their app stores), and Amazon (AMZN) (which took the extraordinary step of stifling free speech at Parler completely by shutting down their servers on AWS) were down 2.24%, 2.32%, and 2.15%, respectively.
By their actions, the executives of these companies are destroying the value of their companies. More power to them! They are joined at the hip with the fake news media (you know who they are, or you should) and the democrats in congress who have been trying to get rid of President Trump for more than four years. Should they wish to walk out into the public world, they do so at their own considerable risk and they know that is the case.
So, if these companies wish ot continue distorting news, lying to and censoring the American people, that's their choice. Short at will. (not investment advice)
As an extension of the censorship and denial of first amendment rights, social media site, gab.com has been taking in new users at an astonishing rate, something on the order of 600,000 a day. Conservatives who have had their voices silenced on other social sites are flocking there because the site is self-supported and does not censor its users. What a concept!
Elsewhere, while stocks were taking a little bit of a hit and the major indices were all lower, led by the NASDAQ.
Bitcoin and virtually all cryptocurrencies got hammered on Monday, many of them down 20% or more. Bitcoin touched down at 30,100 early Tuesday morning after reaching nearly $42,000 on Friday. Essentially, Bitcoin is down to where it was a week ago, so this looks like an ordinary correction with a little bit of FUD thrown in from the political and social universes. Probably not a big deal. Bitcoin's future still looks very promising both from an investment standpoint and as a stand-alone unassailable alternate currency.
Supposedly, President Trump plans to speak live from the Alamo (last stand appropriate?) on Tuesday at 3:00 pm ET. Livestream HERE.
Gold and silver made modest gains Monday. Yield on the 10-year note continues to rise, hitting 1.13% on Monday. Oil also continued its rally. WTI crude futures are looking at a $53 handle. The US dollar was higher against the main currencies, Euro, Yen, and Pound on Monday, but it is falling against them as the sun rises on the East coast of the United States.
Futures are pointing towards a relatively quiet, positive open. European stocks are fading. The VIX is higher.
Zero Day, if there is such a thing, looks to be on the immediate horizon.
At the Close, Monday, January 11, 2021:
Sunday, January 10, 2021, 1:55 pm ET
Publisher's Note: If you're seeing blank spaces on this page or other pages on dtmagazine.com, then Google is still attempting to de-monetize it. Downtown Magazine's relationship with Google dates back to 2003. We've been revenue partners through Adsense for most of those years, but apparently, our commentary isn't to their liking of late, even though we've not been informed of any issues. Google's ads on this site could be replaced in a heartbeat. We have other partners, but Google (used to) pay better and the blank spaces now serve as a badge of honor. Nobody likes censorship, except who live in fear of the truth. Downtown Magazine has always been devoted to reporting and opining on the truth and will continue to do so. Since the main revenue source has been shut off, if you feel the urge, there's a donation link in the left column. Any amount is appreciated. A few bucks from a few people would likely exceed what Google used to pay. As long as there are blank spaces on this page and Google continues its purge of the truth - not just here, but widespread - this note will appear atop every Money Daily post.
Unless you've been under a rock, you're probably aware of the social and political developments that occurred over the past week. Wednesday saw the storming of the Capitol and the illegal, unconstitutional certification of the presidential and vice presidential electors from the states, making Joe Biden and Kamala Harris the choice of the congress, against the will of more than 70 million Americans who feel, justifiably, cheated.
There's no doubt that there was manipulation and tampering with the presidential vote totals from November 3, 2020, and probably of a good number of Senate and House races as well, especially the two just stolen on Tuesday in Georgia, giving Democrats and Republicans an equal 50-50 split in the Senate (Doesn't really matter. The Republicans were in on the scam, too.).
On Friday and Saturday, Twitter, Facebook, Google, Apple, and Amazon continued efforts to silence President Trump and other conservative voices. The president was banned on Twitter and Facebook, all accounts shut down, along with others like General Flynn, attorneys Lin Wood and Sidney Powell, Rush Limbaugh, many independent bloggers, and many others. Some have estimated Twitter purged more than 10,000 users over the past few days.
In an attempt to avoid over-politicizing this space - there are plenty of websites which cover that better - let's get right to the economic side of the equation.
Amid all the turmoil in the political space, just like public sector employees who haven't missed a single paycheck over the last nine months, Wall Street traders didn't skip a beat over the week, sending all the major averages to record highs.
The real action, however, was at the bond market where the 10-year note exploded higher, which, in the upside-down world of fixed income, meant a huge sell-off was underway. This only makes sense because the Fed believes they can make inflation happen while keeping interest rates near zero. Voodoo Economics has resurfaced, and it's located in the Eccles Building. There are trillions of dollars in malinvestments now, and more to come.
Yield on the 10-year note, which was as low as 0.54% on March 9, 2020, opened the new year on January 4 at 0.93%. By week's end, January 8, it was yielding 1.13%, a full 20 basis points higher. Uh-oh! This is not what the Fed had in mind, but it is what happens when you debase your currency, keeping the printing presses going 24 hours a day. Money in fixed income flees to the risk assets in the stock market.
Yield on the 30-year bond rose, from 1.66% on Monday to 1.87% as of Friday's close. Monday, and moving forward, is going to be interesting, to say the least.
In crypto-land, Bitcoin and Etherium continued their steady, unstoppable ascent. Bitcoin, which touched down at $27,678 on Monday, got as high as $41,986 on Friday, and is holding above $38,000 as of this writing. Etherium rocketed from $886 (Monday) to $1350 (Sunday), an impressive move.
Precious metals continue to be erratic, thanks in large part to being driven solely by the derivative, futures market. On Friday, both gold and silver were devastated by the criminal enterprises controlling the price. Silver was hammered, reaching nearly $28 an ounce on Wednesday. Friday's futures trading took it down as low as $24.41 (that's not a misprint) before closing out the week at $25.40.
Gold was walloped in similar manner. After hitting a three-month high at $1957.20 on Wednesday, controllers took it down as low as $1828.20 on Friday, settling out for the week at a depressing $1850.00.
Buyers and sellers were not amused in the least, as asset values for everything other than real money - which gold and silver have proven to be over thousands of years - were shooting higher. Buyers of physical sensed bargains, but paid severe premiums as supply continues to be strained. This is demonstrated by the weekly survey of prices on eBay, below.
The latest prices for common gold and silver items on eBay (numismatics excluded, shipping - often free - included):
Item: Low / High / Average / Median
Oil continued to rise through the week as anybody checking gas prices will attest. WTI crude and gas at the pump are at the highest prices since March of last year even though most of Europe and half of the US is on lockdown. It's criminal behavior, as prices should be leveling off or dropping post-holiday.
The coming week is going to be epic. Beyond the political struggle, which is rapidly descending into armed camps in Washington, DC (9,000 National Guardsmen on the ground for an indefinite stay) with congress calling for President Trump's impeachment, again, while the president refuses to concede the election.
Earnings begin rolling out this coming week, though on a limited schedule due to the calendar and annual reports being prepared. Friday should be the most interesting day, with reports prior to the opening bell from banking giants JP Morgan Chase (JPM), Citi (C), Wells Fargo (WCF) and PNC Financial (PNC). The rest of the biggest banks - Goldman Sachs (GS), Morgan Stanley (MS), Bank of America (BAC) - will report the following week. It will be especially interesting to note which banks, if any, begin to report credit loss reserves that have been building, largely unreported, since the end of the first quarter. Millions have had credit card, mortgage, and personal loan deferrals or forbearance which the banks have not had to report due to regulations enacted under the CARES Act.
At the Close, Friday, Janaury 8, 2020:
For the Week:
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