Is JP Morgan Out of Control?

Is the headline risk finally catching up with JPMorgan? The relentless barrage of legal problems hasn’t hurt the company’s business one whit so far from outward appearances, but might it be affecting the stock price?

Josh Rosner’s latest investigative report at Graham Fisher suggests that the nation’s most notorious Too Big To Fail bank is an absolute swamp.

Over the four years ending 2012, Rosner notes that JPMorgan has paid more than $8.5 billion in legal settlements, equal to roughly 12% of all company net income generated during that period. And with the investigations and actions continuing to pile up, it seems as though there’s no end in sight.

How are they able to do this?

Simple – no high-ranking executives at the company are ever at any personal risk, it’s just the company’s profits at risk – and those profits have been fattened to such a huge extent, for so long, by the Federal Reserve and Treasury, that it almost doesn’t matter. There’s probably no amount of money that JPMorgan can be forced to settle for that can stop the company from rolling on. And if a handful of people have to lose their jobs every once in awhile, so what?

This is what happens when you make it clear to the marketplace that a firm is too important systemically for it to ever truly be in danger. The big banks would have to be caught openly funding assassinations in a third world country to actually be at existential risk – and even then they’d probably claw their way out using the near-limitless amount of money and influence at their disposal. Five years after the financial crisis, we now have banks that are even bigger and more unmanageable, despite the rickety latticework of new regulation we’ve attempted to encircle them with.

I’m not casting judgment on this system, I’m just pragmatically relaying to you the facts and the way things currently work. It is for you to decide if there is a better way or if we should allow the TBTF banking hegemony to continue in the interest of the nation’s economy.

JPMorgan’s CEO Jamie Dimon has made the case that America needs giant, global banks so that we can compete for giant, global deals. He seems to believe very strongly that this is somehow worth the risks that his firm’s giant-ness engender. Apparently, there is consensus in Washington for this view, because his bank has only grown larger in the wake of the bailouts.

The stock market looks to be voting on whether or not the bad press matters once again. In the wake of the London Whale fiasco, the markets rewarded JPM shares for the deftness with which the bank put the issue to bed. But now, from a technical standpoint, the headlines appear to be keeping equity buyers away from the name as the recent lower-high put in might represent the right hump of a textbook head-and-shoulders pattern.

The below chart comes to us from ChartSmarter.com:

jpmmm

 

To read Josh Rosner’s in-depth, devastating report, click over below:

JP Morgan Chase: Out of Control (Complete Rosner Report) (The Big Picture)

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here: https://www.ritholtzwealth.com/advertising-disclaimers

Please see disclosures here.

What's been said:

Discussions found on the web
  1. Disposable Ponchos commented on Sep 19

    … [Trackback]

    […] There you can find 81404 more Info to that Topic: thereformedbroker.com/2013/09/24/is-jp-morgan-out-of-control/ […]

  2. pinewswire.net commented on Sep 22

    … [Trackback]

    […] Read More on that Topic: thereformedbroker.com/2013/09/24/is-jp-morgan-out-of-control/ […]

  3. Blazing Trader Review commented on Sep 23

    … [Trackback]

    […] Read More to that Topic: thereformedbroker.com/2013/09/24/is-jp-morgan-out-of-control/ […]

  4. immediate edge reviews commented on Oct 01

    … [Trackback]

    […] Info on that Topic: thereformedbroker.com/2013/09/24/is-jp-morgan-out-of-control/ […]

  5. bitcoin evolution online commented on Oct 02

    … [Trackback]

    […] Info on that Topic: thereformedbroker.com/2013/09/24/is-jp-morgan-out-of-control/ […]

  6. dumps shop script commented on Nov 16

    … [Trackback]

    […] Information on that Topic: thereformedbroker.com/2013/09/24/is-jp-morgan-out-of-control/ […]

  7. Digital transformation agency commented on Nov 26

    … [Trackback]

    […] Find More on to that Topic: thereformedbroker.com/2013/09/24/is-jp-morgan-out-of-control/ […]

  8. login tangerine commented on Nov 27

    … [Trackback]

    […] Read More on on that Topic: thereformedbroker.com/2013/09/24/is-jp-morgan-out-of-control/ […]

  9. 안전공원 commented on Dec 25

    … [Trackback]

    […] Find More Info here on that Topic: thereformedbroker.com/2013/09/24/is-jp-morgan-out-of-control/ […]

  10. Research commented on Jan 05

    … [Trackback]

    […] Info to that Topic: thereformedbroker.com/2013/09/24/is-jp-morgan-out-of-control/ […]

  11. DevOps commented on Jan 12

    … [Trackback]

    […] Here you will find 72881 more Information on that Topic: thereformedbroker.com/2013/09/24/is-jp-morgan-out-of-control/ […]

  12. replique montre commented on Jan 19

    … [Trackback]

    […] There you can find 19272 additional Information on that Topic: thereformedbroker.com/2013/09/24/is-jp-morgan-out-of-control/ […]

  13. Senco DuraSpin DS200-AC manuals commented on Jan 20

    … [Trackback]

    […] Read More on that Topic: thereformedbroker.com/2013/09/24/is-jp-morgan-out-of-control/ […]