Chilling Thing Jamie Dimon just Said about the Economy

[marmar]

Chilling Thing Jamie Dimon just Said about the Economy
by Wolf Richter • January 14, 2016


[font color="blue"]“Hopefully… It’s not the beginning of something really bad.”[/font]

JP Morgan Chase is a money-making machine. Profits in the fourth quarter rose 10% to $5.4 billion, bringing the total for 2015 to a record $24.4 billion. But it was a mixed bag of the good, the bad, and the rotting – of the type we haven’t seen in six years.

So revenues fell 2% for the year (under GAAP), which is to be expected, given that revenues of S&P 500 companies have fallen for four quarters in a row, according to FactSet. It’s been the worst revenue recession since 2009. It’s tough out there.

Total assets at the bank fell 3% to $2.35 trillion during the quarter, which CFO Marianne Lake explained this way during the earnings call this morning (transcript via Seeking Alpha): “The balance sheet was down in part purposefully and a little bit because of market conditions at the year end.”

But JP Morgan did what American companies do so well: it cut costs to more than make up for the revenue declines.

This cost cutting included over 5,000 layoffs across its four major business units – corporate and investment banking, consumer and community banking, asset management and commercial banking – with the first 1,000 folks already gone by May 2015 when the layoffs were first reported. At the time, the bank announced it would also overhaul its 5,000-plus branches, with technology replacing some humans. .....................(more)

http://wolfstreet.com/2016/01/14/chilling-thing-jamie-dimon-jpmorgan-just-said-about-the-economy/

[n2doc]

1. Something that has always stuck with me

I read an interview with one of these banksters who said candidly that they make their money on volatility. If things are going smoothly their investment models don't work well.

I think we are seeing that now. Drive markets down, with lots of wild upswings along the way. Then reverse.

[modrepub]

2. Most wall street money is definately made when the market is volitile

It's the nature of the beast. But what's not really being talked about much is how much the oil and gas industry is loosing with low prices. How are these companies going to pay off the billions of $ they invested when oil and gas prices were three times higher than they are now?

[n2doc]

4. Large oil and gas co's will ride it out

Small ones will go bankrupt. Has happened several times in the industry.

[phantom power]

3. Which is also an implicit admission that they're all fucking inside traders

Volatility is a fucking great way to make money, if you happen to know when things are about to go up or down. For the rest of us suckers who play by the rules, not so much.

[airplaneman]

9. They call them market makers because they make the market do what they want

They are inside market manipulators.
-Airplane

[FlatBaroque]

6. If you want to know who "owns" the economy

check to see who makes money in good times and in bad.

[roguevalley]

11. I have my knitting needles. Who has the guillotine?

[phantom power]

5. There are worrying election ramifications to this

Historically, a poor economy leading up to election is bad news for the incumbent party. If the economy is in chaos next fall, it will be a strong factor in favor of whichever conservative freak is running for president.

[underahedgerow]

7. A colleague of mine attended a 2 week invitational seminar at Harvard in November, held by the

world's top economists.

He came away in a near panic and has been revising all of his financial forecasts and products non stop for the past month.

We haven't had time to talk about it in depth, but there is some super serious shit rolling down hill in the near future and in the 15 years to come, on a global scale.

For now, buy MU. Get out of all the oil and gas stocks, or else buy in large at rock bottom and hold long. Very long and only those with dividends.

Get out of telecoms/mobile phone carriers. Get out of television/broadband and cable. Buy FB, apple & google. Get in satellites. Get into products like netflix, hbo, etc, content providers.

Emerging markets in Africa are going to be effing huge.

When I learn more, I'll pass it on.

[kath]

8. What is MU?

Thanks.
Pretty worried here about retirement savings disappearing...

[underahedgerow]

10. You should be worried. Everyone's situation is different, if you have a trusted financial advisor

I suggest you review all your holdings.

MU is Micron Technologies -- a really really good stock.