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FBR Capital Markets Managing Director Paul Miller on J.P. Morgan’s new estimated loss and the benefits of mortgage banking.
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And Paul Miller because he's FBR capital markets managing director he looks at the -- she -- all of these numbers you've just heard Charlie's assessment.
Do you like JPMorgan here you have what's called the perform which -- -- light beige.
It's a neutral it's on the -- on I'm -- on the sidelines.
You know can it straight up -- yeah Jamie doesn't really get in front of people is gonna invite you know -- a moment ago I think a hundred people in that room tomorrow I'm going to be in that room.
The first time he's gonna have her earnings call on front of both buy side and sell side analysts.
It's where he does shine it is very good in front of people he's gonna come across as very sincere.
That we screwed up we got a behind us we're gonna move forward and he's talking talking is telling people by the end of the year -- -- -- even going to be talking about that I don't think that's going to be the case.
There's a lot more details industry we really need to know.
IE why was -- so confident it wasn't a big deal early April and it was a big deal mid may.
There's a lot of different things we need to know but the most important that we need to know is -- CIO office for this trade came out of you know how much they contribute to earnings.
Over the last couple years because we don't get that is -- dad that has break outs and that's what we need pop that's what what -- tomorrow and Jamie and I hope we get that information I doubt it though.
So poll listen native fats as Charlie got rated as reported that the -- out there is maybe a loss in four to five.
A billion dollars how does that affect the stock do you think it's been.
Does sound like some 25% since early April.
Odd doesn't get a push out -- even though we're talking about a loss of four -- five billion dollars.
Yeah I mean it out of pretax.
25 to thirty billion dollars so that didn't really the actual dollar amount of the trade was it was not the big concern.
That's -- in the media gets excited about that's it captures the headlines right after the politicians -- with.
But really is the fact that he did not know -- this office was losing money that goes to the risk management process of the company.
And that's what's more concerning about the actual loss.
He's been.
And made a comment in early April.
That this is not a big deal I had this under control this office is complete you know what watch in this office only come back out thirty days -- at all like.
We know how batter was out there the comments I made early April -- -- where -- we're not correct and that's what that's what people concerned about.
All right so because of the scandals your bearish on and on some of the really big bank names but -- there's one bank name out there one financial.
That can give us a better read on what the others might do and you like get what is it Y.
It's well -- well of course -- Wells Fargo but you know we want neutral the whole banking space because where the yield curve is.
Com the ten year below 15 is that that's a -- structure problem for overall banks.
But for those banks have embraced mortgage banking like the Wells Fargo we even -- PNC and USB.
Those are going to be a better than those -- the comes we're saying -- is it gonna be a good proxy for the whole it for the whole space.
It be okay for this for those companies in mortgage banking.
I'm not all banks do mortgage banking so for those companies or mortgage banking Wells Fargo is going to be good proxy that.
That's one of our buys out there that's what we like whenever fear it would be very easy for him what Washington Federal which came out with numbers and got crushed if for people to throw that one out -- that.
You know it.
I think yeah.
Washington -- -- there is a great as is a better picture of your overall health of the market there you saw their net net interest margin which is are spread between loans and their deposits shrank by 25 basis points that is a huge move down.
That's why you see people really -- that stock off its trading closer to book value now probably where it should trade we kept on -- on -- but you wanna see a lot of companies this this.
This earning cycle really show a lot of pressure on that net interest margin a downside.
And we do think that's gonna chase some people some investors out of the space because it's because -- what you can't you can't -- growth.
When you spread between your assets -- -- bill is -- shrinking at this pace.
-- quickly -- -- scandal hanging over the of the big banks of does that prove to be a benefit for the small banks in some sense.
Yes it does that mean that you know that that the big banks that make up Libor the big fifteen.
You know broker dealers in New York type of -- so yes some of the well party -- Libor is gonna benefit I think tremendously but I do think you do.
You do get some of these smaller banks.
You know.
Benefit from this Libor things by the other issue we don't know when this is all gonna come.
If addition it's gonna take a while for all these lawsuits they hit I think we're unfortunately we're going to be talking about this why -- -- three years from now so -- that hit the banks right now.
I don't think -- -- -- from horizon that we have to keep really sharp eye out on the lawyers are all happy to have -- thank you finishing they have.
Paul LA FBR capital my.
