J.P. Morgan Chase & Co reported quarterly results today.
Their profit is up 47%.
How many dollars is that?
$4,800,000,000
That’s 4.8 billion dollars. Billion with a B. Profit. In 91 days.
I’ll do the math for you.
J.P. Morgan Chase made $52,747,252 *in profit* EVERY SINGLE DAY during the 4th quarter of 2010. That includes the days they were closed for business.
Fifty two million dollars a day profit. Ponder that.
These earnings were reported on MarketWatch at 12:29pm EST today. Five hours and seven minutes later, MarketWatch ran another article, Foreclosure process a ”˜mess,” J.P. Morgan CEO says.
In that article it is reported that on a call with analysts, J.P. Morgan Chase & Co, Chief Executive Officer Jamie Dimon said the foreclosure situation, “is a big mess, it has cost us a lot of money.”
Well boo freaking hoo. Cry me a river pal. Your company made FIFTY TWO MILLION DOLLARS A DAY; it’s pretty hard to feel bad for you.
I’d love for Mr. Dimon to list a Chase short sale and have to deal with his own loss mitigation department. If he’s whining about spending money when he’s earning almost $5 billion a quarter then I suspect he’d put a bullet in his head after a 5 minute discussion with a Chase loss mitigation officer. Assuming of course he could get the guy to even answer the phone.
Here’s an idea for you Mr. Jamie Dimon ”“ spend some of that billions in profit and fix your lousy short sale process. Hire some staff, preferably ones with at least a modicum of intelligence. Help us actually CLOSE some short sales and you won’t have so many foreclosures to cry about.
Remember that $1,200 extra you wanted from our client in order to approve their short sale? They couldn’t pay that so you wound up foreclosing on them. That $1,200 amounted to 0.002% of your profit for ONE DAY.
Of course you don’t remember, because you don’t give a crap.
I’m sorry your bank only made $52,746,052 in profit that day.
Moron.
UPDATE: In an odd twist of timing, two other Thompson’s Realty agents also penned posts today about banks. Great reads here: Heather Barr writes, Not paying your mortgage? Don’t worry, banks making money off you anyhow, and Elizabeth Newlin writes, Getting Inside the Head of The Bank.
UPDATE#2 (Jan 17): Chase was profiled on the Today show this morning for overcharging military families and wrongly foreclosing on some of them. Nice of them to pry loose $2M to reimburse the overcharges, but what about the 14 families they wrongly kicked to the street?
Visit msnbc.com for breaking news, world news, and news about the economy
Hat tip to Shar Rundio for the earnings and Dru Bloomfield for the Today show clip.
Photo Credit: epicharmus on Flickr. CC Licensed.
The Phoenix Real Estate Guy was started by Jay Thompson, and I have a little blogging problem... he liked to say...
Great post and very well said Jay, I am so sick of banks and them crying a river. They are making record profits and sitting on piles of cash!
Great rant!
“If he’s whining about spending money when he’s earning almost $5 billion a quarter then I suspect he’d put a bullet in his head after a 5 minute discussion with a Chase loss mitigation officer. ”
Ha ha!
And Chase killed the short sale on my house- not sure how these people sleep at night
He can’t afford the legal fees (snicker)
I have my own battle with Chase going on right now. A negotiator who deleted clear, readable copies of a short sale contract she requested, received and read — because she was angry that I had obtained her email address (from Executive Res Team). I emailed Jamie Dimon who opened my email (I track everything via ReadNotify) and he sent 2 ‘quality service people’ to ‘smooth things over’ and a LM Analyst to ‘help’ (still hasn’t returned 2 of my calls)
Of course Chase is in hot water over the negotiator convicted Monday of RESPA violations: http://www.homeflux.com/press/short-sales-bank-fraud-and-kick-backs-cnbc/ so I guess they’re busy.
Idea from this:
“I’d love for Mr. Dimon to list a Chase short sale and have to deal with his own loss mitigation department.”
Let’s get him signed up to do this on that show “Undercover Boss”. I’d watch and so would anyone who has ever had to deal with one.
Oh my word…that would be pure awesomeness!
Yeah that would be hilarious to see him on Undercover Boss! Give him a taste of his own medicine
Love it!
52 M a day, good work if you can get it
I physically cringe every time I drive past a Chase bank. I can’t imagine ever doing business with them in the future or recommending them to my clients. This nonsense with them has been going on for too long; there is no excuse.
Chase is the leader in SUCK in the short sale dept. Poor people. Dont know where their next meal is coming from.
I dubbed Chase the “First Bank of Satan” for those very reasons a few months ago.
I’m not a banker, nor do I play one on TV, but I’m going to play Devil’s Advocate here and say that it’s possible that Chase didn’t *actually* make $4.8 Billion in profitis in Q4 2010. It’s a number that lets Chase make the shareholders happy and allows the Government to claim TARP was necessary and is working. Smoke and mirrors.
Consider this:
1) Remember the new accounting rules change that was rammed through in the first few months of the Obama Administration? To quote the New York Times: “Bankers bitterly complained that the current market prices were the result of distressed sales and that they should be allowed to ignore those prices and value the securities instead at their value in a normal market.” http://www.nytimes.com/2009/04/03/business/03fasb.html
2) Is it possible that between our impossibly complicated tax code and insurance companies, banks get to write off more on a foreclosure than they would on a short sale, increasing their profits in a backwards sort of way?
2a) To your point about their less-than-stellar short sale department- if this is the case, then why should they invest in a unit (the loss mitigation department) when it makes more sense for the bank’s balance sheet to foreclose?
3) Keep in mind that even though they ‘made’ almost five billion dollars, the also set aside $2.1 Billion for losses on loans written by (now-defunct) Washington Mutual, as well as $1.5 Billion for litigation expenses, effectively wiping out $3.6 of the $4.8 Billion in profit; planning for the future, so we don’t need to worry about footing the bill for another bailout. So pick your poison- a bank making big profits that will have resources to weather another downturn in the economy, or a bank that makes only modest profits, and needs a[nother] bailout to get it through the next wave of defaults.
Again, I could be way off on any of these points, and I also agree that some of these numbers are getting stupid big- Chase’s $17.37 Billion net income in 2010, ExxonMobil’s $45.2 Billion in profit in 2008, a $50 Billion valuation for Facebook (a very popular website, yes, but a P/E ratio twice that which would indicate a speculative bubble, yet companies are foaming at the mouth to try to get a piece of it), but what can we do- companies are beholden first and foremost to the shareholders, and the shareholders expect to see their shares rise in value and maybe a dividend or two.
1) Sure, why don’t we all just disregard reality and not count distressed properties when valuing property? That’ll make all the sellers happy. We could just say, “No worries folks, we’ll just price homes like it’s 2006”. Because you know, that’s fair.
2) With our current tax code, anything is possible.
2a) Clearly the banks don’t give a damn about closing short sales. For whatever reason.
3) OK, so they only made 1.2 billion in profit in 90 days. That’s “only” 13 million dollars a day. I’ll take one day of their reduced profits and retire. And my kids won’t ever have to work.
Morgan Chase CEO Jamie Dimon made 1.32 million dollars in salary and extra compensation in 2009. ( http://www.reuters.com/article/idUSTRE62I42J20100319 ). That does *not* include “some $16 million in stock and bonds he received in 2010, based on 2009 performance”.
Shareholders aren’t the only ones they think about…
1) That’s kind of what I was saying- they ‘made’ money because they foreclosed on a million dollar house that is currently only worth half that. But because of the accounting rules, they are able to clam a $1 million ‘asset’, because that’s what it would be worth in a ‘normal’ market.
3) Don’t get me wrong- as I mentioned in my response, these amounts are getting stupid big. Heck, I’ll take 8 hours’ worth of their profit and be pretty happy.
And sure Jamie Dimon made money too, as did/do a lot of CEOs. He’s not a hired gun- he’s been a C-level executive for Chase and its predecessors (Bank One) for over a decade now. His compensation package is given to him by the Board, and by extension, the shareholders. So keep the shareholders happy, and you’re more than halfway there.
To look at it another way, to ask the question, how do you put a number on a CEO’s position? A lot like other things, it’s what the market will bear, just like a house or a pro athlete or a vintage Ferrari. Does it sound like a ridiculous amount of money to you and me? Heck yes. But when you look at it empirically instead of emotionally, you find that quick search shows he’s the 3rd highest paid CEO in banking, and his compensation is actually just under the average for the top 10 CEOs in the banking industry. A lot of money by our standards, but in line with the compensation packages of his peers.
Is he worth his salary? If you don’t think so, buy some stock and vote your shares.
“So pick your poison- a bank making big profits that will have resources to weather another downturn in the economy, or a bank that makes only modest profits, and needs a[nother] bailout to get it through the next wave of defaults”
Damn…those are my only two choices? How about we let them die next time”¦a.k.a. capitalism. Their prosperity was handed to them. It was guaranteed.
WOW. Good one Jay……….
It was weird when it was just me and Heather, but all three of us is crazy!
I reassert that if we all continue to try to understand WHY the banks do things, in normal human being logical terms, it will only make us all utterly batshit insane. It’s like peeking into the brain of Charles Manson; do you really want whatever image that creates burned into your brain for the rest of your life?
For those who haven’t read it yet, read Elizabeth’s post. Very well-written and insightful.
Anyway, thanks for the post, Jay. I hadn’t heard of the story until I saw it here.
Way to go Jay! Love your Blog!
Jay I think you should tell us how you really feel. Seriously It’s about time someone told it like it is. These banks think we’re all a bunch of idiots. Shame on what they have done to this country and the profits that they have made at the expense of so many.
Well, doesn’t that just put things into perspective?! Love the chatter between Jay and Dan! =)
Ugh! It’s $h1T like this that just makes me sick. I’m in the middle of a short sale with Chase where Chase has countered $2,000.00 AFTER people, including myself, have had to negotiate a bit of a reduction, if you know what I mean.
Grr.
Jay,
I wrote a similar open letter to JPMorgan Chase about how much they lack human compassion and the ability to actually help anybody. Well done, Jay!
http://arlingtonrealestatenews.com/an-open-letter-to-jp-morgan-chase-regarding-your-lack-of-help-to-the-everyday-consumer/
Laura
Great letter Laura!
Laura, that was a really hard hitting letter, and I’m sure they convened the board to discuss it. Zero substance. And now you know how they and consumers feel talking to realtors all day. I wonder how all the big real estate brokerages are handling all the sub prime loans that they wrote and are now distressed. Are they doing anything any differently?
Seriously, after reading your letter, you couldn’t sit in a room with anyone from JPM and talk intelligently to them about anything. We’ all tired of hearing everyone blabbering. Present some solutions that make financial sense, and maybe you’ll grab someone attentions. And just remember, if it wasn’t for them and others buying and selling these loans all along, you wouldn’t have made 1 out of 50 sales. So you as well as they, benefited from making all the bad loans. Your sales are way down because you no longer have them doing the wrong thing so you can sell homes to people who never should have been allowed to buy them in the first place. I hope you were thanking them as you were making all those sales.
And jay, your hands aren’t so clean either, because you too were raking it in while selling homes using all the subprime loans. I didn’t hear you pleading with them to stop.
Btw, I’m not a fan of what wall street did, but I’m equally not a fan of the realtors and the NAR who saw this happening and did nothing to stop it. Everyone is to blame here…including you.
Steve – “raking it in”? So you are privy to my financial statements? And you know how many people I told back then (and now) not to buy or sell a home?
Ah, and you also are apparently privy to my past clients financial statements as well since you claim to know how many used sub-prime loans.
You’re certainly entitled to your opinion and are free to blame whoever you want. But you also have zero clue about how we run our business.
Jay, thx for your response. Though I may not know exactly how you run your business, I’m sure I have a general clue, because I’ve only been doing this for longer than I care to admit to. But lets say I am wrong…don’t you think that you may be just as wrong about the banking situation that your post is referring to? There’s no way that you can possibly put yourself in their shoes and to have the know how to deal with the complex problems and the magnitude of the situation they are dealing with. Can you imagine having to field thousands of realtor phone calls a day, most of who have no idea what they’re doing in this situation. You know how hard it is to get agents to deal with a simple form contract, let alone something as complex as loan modifications, short sales etc
Obviously the JPM’s of the world, don’t need to make mortgage loans to make huge profits, and maybe they’ll be getting out of that business…then what will you do without their lifeline. Maybe your company will become the lender for all the homes you sell in the future, because the banks won’t want to do business with you. and we’ll see if you do things differently.
Steve –
I have no doubt that many of the people working for lenders are fine, upstanding people. I suspect they are grossly understaffed and are doing the best they can within the restrictions that are imposed on them.
My rant wasn’t intended to be against the little guy toiling away at the bank just trying to do his/her job. I sympathize with them.
I have no sympathy however for the CEO complaining about foreclosures costing his company money. Certainly not with the cash they have rolling in every day.
I will *never* become a lender. As I wrote to Brad below, I think the combination agent/broker/lender thing is a horrible idea. There will *always* be someone that loans money to people buying homes. I’ll let those people lend and they can let me do my job.
HA. Good post – I really enjoyed it. The rhetoric that comes from the banks right now is really unbelievable.
This post makes me sick to my stomach. How to spell Chase… G R E E D.
Jay, Thank you for replying to Steve’s comment. Those of us REALTORS that have been able to weather out this historical real estate crash – and even prosper despite it, are doing so because our clients trust us and appreciate our care and concern in the past and present. Some of my most loyal clients are those that I talked out of selling their homes.
Steve – bad form.
I want o jump in on this one, and have to agree with steve in part.
Sub-prime, no-doc, whatever kind of loan you want to call it, we all used them and profited. Real estate developers and brokerages in Phoenix were handing out loans like they were candy.
Without the banks and their programs, and the brokerages and their programs, there never would have been a boom in housing. How else were we going to ride around in fancy cars and live in great homes, and have 2 or 3 homes, with all the fancy goodies in them, knowing all along that we really couldn’t afford it. Lets face it, we all made a lot of money off the banks. So everyone is at fault here.
Sorry, but I just assumed the brokerages were raking it in during the boom, because of all the homes sold in your area. And I assumed that like the rest of us you too had a mortgage division/company who were writing loans at the same pace as everyone else did using the same exact instruments that eventually got us into trouble. We all took part in that.
Talking about hiring the right people, “preferably ones with at least a modicum of intelligence”. How much fun is it to call a realtors office, looking to purchase a home.
And, next time you may want to leave out any reference to anyone putting bullets in their head…especially if you live in Arizona!
My point was, that we shouldn’t be the ones slamming the bank. Their motives, whatever they are, along with the position they find themselves is something I’m sure you are not privy to. Unfortunately, the banks motives are not in line with your motives, nor should they be.
Jay, all you did in your post was to bitch and moan about JPM, without offering up a concrete argument or a solution. Venting doesn’t get you anywhere. But providing solutions does. We do have to remember, that without JPM, BOA and others, who take the risk, we and the builders have no business.
Ever wonder what they think of our industry?
Don’t burn your bridges.
Brad –
“Real estate developers and brokerages in Phoenix were handing out loans like they were candy”.
Not this brokerage. I hate the idea of agents doubling up as lenders:
http://www.phoenixrealestateguy.com/the-combination-real-estate-agent-lender-one-stop-shopping-or-half-assed-service/418/
“Sorry, but I just assumed the brokerages were raking it in during the boom, because of all the homes sold in your area. And I assumed that like the rest of us you too had a mortgage division/company who were writing loans…”
You might want to revisit all your assumptions…
“My point was, that we shouldn’t be the ones slamming the bank.”
Why not? We deal with them every day. We see them make moronic decisions that impact peoples lives. Someone *should* call out the ridiculous things they do. Who better to do that than the people that see it day in and day out?
“How much fun is it to call a realtors office, looking to purchase a home.”
No fun at all for a lot of offices. And some offices are a pleasure to deal with. Just like lenders, and mortgage officers and banks and ANY other occupation — there are the good, the bad and the ugly in every profession.
“Jay, all you did in your post was to bitch and moan about JPM, without offering up a concrete argument or a solution”.
Maybe so. But you know what? It’s my blog, and I can vent and offer up no solution if I want to. No one has to read it. Personally, I think venting like this can serve an educational purpose. I don’t see anything wrong with exposing some of the bullshit that some of these lenders pull. Maybe if more people let it be known, then people a lot smarter than I am that do have the answers, and the means, to affect a change can do just that.
“Venting doesn’t get you anywhere.”
Not everything I write here is intended to get me somewhere, or to change the industry.
Sometimes venting is just venting. And it lowers my blood pressure to let it out.
“Ever wonder what they think of our industry?”
Personally, I could care less what the banking industry thinks of our industry. Just like they could care less what I think of them.
“Don’t burn your bridges”
I seriously doubt JPM, BOA or any large bank gives a crap what I say, think or feel, nor do I think they are going to boycott my brokerage because I whined about the ridiculous profits they make while they continue to stick it to people. And I’m certainly not going to suck up to them, or ignore their moronic ways of doing business just so I don’t “burn a bridge”.
I am hopeful that these opinions aren’t just for ‘venting’ ; although there is nothing wrong with that. I seem to remember another of the ‘Big Three’ lenders that had a *HORRID* reputation for dealing with short sales only 18 months ago. They listened to all the complaining that was being done about them and completely re-vamped their processes and added staff to help meet demand. That same bank that I and so many others griped about is now, only 18 months later, my favorite bank to deal with on a short sale. Not only did they improve, but they innovated and now other banks are following their lead.
Go figure??… a business can actually listen to feedback, and create solutions. I didn’t major in business in college, but I’m sure thinking that is the way it’s supposed to work. Guess what else? Chase won’t realize what an unbearably, ridiculous, pull your hair-out job they are doing if no one ‘vents’ about it.
Jay – I appreciate you taking the time to articulate what so many of us are thinking and giving us a place to chime in.
Chase… I wouldn’t purchase a money order from you let alone open an account or take out a loan. #JustSayin
Tiffany, talk about horrid reputations…ever hear what the public thinks about us? It’s not pretty.
As a contractor for Chase (IT Dept) I can tell you the reason these people can sleep at night is based solely on the quality of employee. It scares me to see how stupid the people that handle all the money really are. I took my money to a credit union DAYS after starting. I can’t say they are any better, but I know for a fact that these people have no business handling cash money.