Posted on 01/13/2024 7:25:20 AM PST by Red Badger
Top U.S. bank JP Morgan Chase on Friday reported $49.6 billion in profits for 2023, a record for the bank, despite a sector crisis that shut down multiple smaller institutions.
Profits for the year were up for the bank despite net income bringing in only $9.3 billion in the fourth quarter, falling 15%, while the company brought in $39.9 billion in net revenue, up 12% for the quarter, according to JP Morgan’s fourth quarter earnings report. JP Morgan’s record profits come after a year of crisis for the sector, starting with a bank run in March at Silicon Valley Bank (SVB), which then spread to First Republic Bank and Signature Bank, prompting the Federal Deposit Insurance Corporation (FDIC) to step in and seize the banks, ultimately selling First Republic’s assets to JP Morgan.
“2023 was a good example of the power of our investment philosophy and fortress principles, as well as the value of being there for clients — as we always are — in both good times and bad times,” Jamie Dimon, CEO of JP Morgan, said in the report. “The result was continued growth broadly across the Firm. The U.S. economy continues to be resilient, with consumers still spending, and markets currently expect a soft landing. It is important to note that the economy is being fueled by large amounts of government deficit spending and past stimulus.”
The bank’s fourth quarter profits were cut down by a $2.9 billion payment to the FDIC to replenish the government deposit insurance fund, according to the earnings report. Federal regulators facilitated an auction among top banks for First Republic assets after its failure last year, with JP Morgan ultimately acquiring $92 billion in deposits and a majority of First Republic’s $173 billion in loans and $30 billion in securities.
In the midst of the banking crisis, the Federal Reserve created the bank term funding program in an effort to give struggling banks funds to combat losses from fleeing depositors. Following projections of lower future interest rates, banks have been able to profit off of the program by accruing interest on the difference.
Depositors have increasingly fled smaller banks in exchange for megabanks, which they see as less likely to experience bank runs or all-out collapses like what happened at SVB. Bigger banks can also afford to raise return rates due to their wider asset and client pools, while small banks cannot.
JP Morgan referred the Daily Caller New Foundation to the fourth quarter earnings report.
“2023 was a good example of the power of our investment philosophy and fortress principles, as well as the value of being there for clients — as we always are — in both good times and bad times,” Jamie Dimon, CEO of JP Morgan, said in the report.
When it was a bad year, I asked them if it was luck or management.
Bank of America could collapse in 2024 – Take a look
The stability of Bank of America, a cornerstone in the American financial landscape, is now under intense scrutiny. With a series of troubling financial reports and industry upheavals, the question on everyone’s mind is: Could 2024 be the year this banking giant collapse?
Climate Change................
The bank’s fourth quarter profits were cut down by a $2.9 billion payment to the FDIC to replenish the government deposit insurance fund, according to the earnings report.
Depositors have increasingly fled smaller banks in exchange for megabanks,
Anyone know why the highest cd rates are 9 months and then begin to lower? What happens in 9 months?
.
Don’t believe it. They are part of the false reality propaganda machine.
The very highest rates now are for 4-week Treasury bills. You can buy them in $100 increments from Treasury Direct. The maximum purchase limit is $10,000,000. You can let them rollover as many times as you want or cash them out in 45 days.
This is what always happens during a recession. Interest rates for short-term government borrowing go higher than long-term rates. Bank CDs follow the same pattern. This is the "yield inversion" they talk about. I have never understood why, but it is a consistent observation over many decades.
The other thing that happens is that Federal and State tax collections decline. This too is happening.
We don't need to wait for an "October Surprise". There will be plenty of nastiness arriving this spring and summer.
The traditional advice was "Always remember to buy in September", and "Sell in May and go away".
Plan accordingly
My take is there is an election in 9 months......................................
That's where we're sitting in a 25% laddered approach.
25% of the holdings mature every week - to keep liquidity readily available if needed.
For now, everything just gets reinvested on maturity.
The interest each month is more than enough for my house payment...
Wonder how much of that profit is based on their credit card services.
Or maybe not. That is not what is driving interest rates. It is the ordinary system response to a recession.
We have a recession going on right now. The government is lying about that as cheerfully as they can. Widespread recognition of the deepening catastrophe will threaten incumbent Democrats at all levels.
If Democrats cannot win even with massive election fraud, they may simply cancel elections altogether. Desperate times call for desperate measures, as we all know.
But the large banks of the Federal Reserve are not into losing their money and power. They can hold off the reckoning for a while by cannibalizing the assets of smaller regional banks that fail under rising interest rates, but when that runs short, they will begin eating each other.
They are not going to lower interest rates while the government continues massive deficit spending. The resulting inflation would destroy them all too quickly. What they might do is raise interest rates for commercial borrowing while they contrive a "sub-prime rate" only for government borrowing.
The market responds VERY MUCH to uncertainty.
The election will be a major change either way. Up until then, some stability, with Democrats throwing money every where they can.
IT IS NOT BUSINESS AS USUAL.
It’s nice to be too big to fail!
You can cash them in 28 days
I have a mixture of 7-month CDs in multiple credit unions and 4-Week Treasury bills on automatic rollover. If those fail, there is always "Plan B". And "Plan C".
My investment opinions are worth what you paid for them. "Your milage may vary" as they say.
Do your own research. Make your bets, put your money down and roll the dice. Let's see what happens.
"The Market" is a rigged casino game. All the players think they can beat it. A few of them will; there are gaps in the rigging. The rest of the players will get scalped during the next churn when the rules all change.
As you say, "It is not business as usual". I am not sure yet what the new definition of "usual" will be. The coming "elections" will provide some information. If the "elections" are cancelled, that will provide some information.
Best to have plans for either path. And then be ready to change them when "unexpectedly" happens.
The market responds VERY MUCH to uncertainty.
“The Market” is a rigged casino game. All the players think they can beat it. A few of them will; there are gaps in the rigging. The rest of the players will get scalped during the next churn when the rules all change.
https://cdn.mises.org/the_vampire_economy_20201022.pdf
THE Berlin Stock Exchange still exists-as a building,
as an institution with large offices, with brokers and
bankers, with a huge organization for daily announcement of stock and bond quotations. But it is only a
pale imitation of its former self and of what a stock
exchange is supposed to be. For the Stock Exchange
cannot function if and when the State regulates the flow
of capital and destroys the confidence of investors in
the sanctity of their property rights.
Best to have plans for either path. And then be ready to change them when “unexpectedly” happens.
A young friend mentioned he was getting financing for purchasing his 18 acres. Told him I might be interested in investing in him.
“Old time” investment was in local and personal. There is merit to that, but there is also still risk, but there are things to reduce risk also.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.