Saturday, October 12, 2013

J.P. Morgan (JPM) and its Pending Multibillion Dollar Shakedown..

J.P. Morgan's (JPM) $23B cash hoard surpasses market capitalizations of 66% of the cos in the S/P 500 as the U.S. Justice Dept shakes it down for some amount unknown. 
POTC believes U.S. Attorney General Holder will go hard and any settlement of $11B or > will likely send JPM and most big banks lower as focus turns to their balance sheets. We would be bearish on the S/P in the short-run as soon as such a large settlement is  struck. 

CEO Dimon is obviously overweight cash because of upcoming settlement bomb. The enormous cash balance aka reserve number is 12% of JPM’s market cap and includes the $9.15B added during Q3. A cash stockpile that large should allow the bank to get through the current Govt storm, still JPM warned of continued 'uncertainty' around litigation costs 'despite strengthening reserves to this degree.'

No other U.S. bank is facing such a regulatory and legal migraine. Banking authorities are investigating if JPM lied to investors about the quality of mortgages tied to mortgage-backed securities issued by Washington Mutual and Bear Stearns as the financial crisis was spinning out of control; both cos of which JPM has under its belt.
Big Brother has JPM and all other U.S. banks by their tails~ Frank-Dodd anyone? 'W' and Paulson started this crap, shame on them.
JPM is supposedly facing a settlement of $11B after Holder rejected the bank’s offer of $3B to end criminal and civil charges just weeks ago. 

POTC finds criminal charges a gigantic paradox since it was the Govt responsible for brokering all these after-midnight deals.  

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