What’s Behind JPM’s Better-Than-Expected Earnings?

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July 15 (Bloomberg) -- Grisanti Capital Management Co-Founder Christopher Grisanti and Bloomberg’s Alison Williams discuss JPMorgan’s better-than-expected earnings. They speak on “Bloomberg Surveillance.” (Source: Bloomberg)

First blushes of jpmorgan up.

When the trading came in much better than they had forecast, that definitely raised expeditions, so city thought the y had training revenue down.

I think people had better expectations coming into the report.

One of the things is the ability of any company to cut their expenses.

What is the elasticity or responsiveness of any given bank to somebody saying cut 6% now.

Can a bank do that?

It depends on the opportunity and where your cost structure is.

I think that was one of the more exciting things that people got from citigroup yesterday.

It is something that people have been looking for for that story.

There are two parts to it.

We have the ongoing expenses and the second part of it is the legal expenses, and that has been a huge had one.

I think investors are looking at that as an opportunity.

Ask is banking saving the day, mergers and acquisitions and transactions?

Is mr.

Dimon or his minions going six floors below in saying -- champagne for everyone?

It definitely feels a little bit like that for the m&a business for example, so we have been waiting for him for years now.

We have had great on the minerals in place, low financing cost, castle balance sheets.

People have been wondering -- when a record to get some traction?

We're finally getting that this year.

One of the most encouraging things that we heard last quarter from goldman ceo as he felt that we were finally getting past the point -- enough far away will from the crisis where we get them.

How many pages, like 147 bazillion pages?

It is hard to say.

What do you see?

Overall falls 12%. remember, jpmorgan had more be second-quarter market, it would be off 20% year on year, so this is a better-than-expected read.

Again, excitations were fairly low coming into this as well.

Our guest has been long banks for a long time.

Tangible book value goes from $21 last year up to $43 and.17. in other words, they got a big cushion and a big capital.

Your take?

I think it was a perfect number.

We are optimistic.

They really beat our numbers.

Let's put it in perspective, though, because revenue as scarlet point out are actually slightly down year on year.

The expectations for all of these guys are much lower than they were a year ago, so revenues were only down 12%. are you overweight too big to fail banks?

Does but jpmorgan morgan stanley now, both of them look ahead to work a name that may be rising and that in -- and that interest margin.

That may be the lovely step in the story.

Like some crystals and pyramid'ss movie?

"nim"? the same once again for all these big banks is the sluggish to trading slowdown.

As long as that does not change, can we expect that trading revenue will plod along?

I think so.

We are in a new normal as far as trading revenue goes.

The robust trading revenue we saw at the end of the last decade is probably not going to come back anytime soon.

When you look at jobs, do you just resume that banks will rationalize?

Can you partition a between big banks, regional banks, and the little guys?

The way i would partition it is looking at the different businesses.

If you look at where revenue is and where staffing is and if you look at six versus equities, you will see that equity revenue per nativity per employee is actually higher than it was in 2010, where in fact it is lower, so there could still be a little bit capacity -- and i was going to say and part of that -- one of the big trends is electronic trading, and within equities, we have made a lot of progress.

You will see across the bloomberg folks another transaction as we talk about the banking industry, reynolds american to buy lorillard for

This text has been automatically generated. It may not be 100% accurate.


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