It's sackcloth and ashes time at JP Morgan.
The bank announced quarterly results on Friday, setting off a wave of wailing and gnashing of teeth in the business media.
It's bad. Really bad. So bad shares dropped 4% at the opening. Quarterly profits down almost a quarter. Oh my God! Another bailout is just around the corner...
Once you get over your shock, or your glee, depending on your perspective, and actually read one of the stories about this catastrophe, another picture quickly emerges.
Seems that the millions they're paying Tony Blair to intercede with Jehova on their behalf is money well spent.
Here's a quick analysis of the story as reported at Businessweek.com.
The headline has you reaching for the Kleenex; JP Morgans profit falls 23% in 4thQ.
Then in the very first paragraph they hint that a big part of that drop is due to a "large" set-aside to fight litigation arising from "poorly-written" mortgages. Note that this is not money set aside to compensate victims of fraudulent lending practices. No, that would be admitting responsibility.
This is money that will compensate teams of $1000 per hour lawyers to fight anyone who makes a claim for compensation due to fraudulent lending practices, or in weasle-speak, "poorly-written" mortgages.
In the fourth paragraph we're told how big a "large sum" is; $528 million. Yup, that is indeed a good chunk of change to have all those lawyers tie up potential litigants in the court system for the next hundred years.
A few more paragraphs along we learn that another $567 million in "losses" aren't really losses either but just a bit of accounting razzle-dazzle.
It is only in the final paragraph of the story that we get what should have been the headline; that 2011 was the most profitable year in JP Morgan's history.
I suppose in these trying times it would be unseemly to brag about it.
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