JPMorgan posted a $12.5 billion first quarter profit, 52% above a year ago, beating expectations by a wide margin. Managing a banking business is like managing every enterprise. While some banks were failing in the first quarter, JP Morgan was making money hand-over-fist. While rising interest rates destroyed some banks and businesses, others made out like bandits. First Republic, Silicon Valley and Charles Schwab did not hedge their inventory; do you think JP Morgan hedged their inventory? It is called “good” management.
Russian crude oil is selling above $60 per barrel. Why is that noteworthy? $60 is the price the supporters of Ukraine capped the legal sale of Russian crude oil as of December 5th. Fire and brimstone were promised to befall anyone paying more than $60 for Russian crude. Now we will wait for Joe Biden, NATO and the EU to make good on that promise.
All eyes will be on Charles Schwab tomorrow morning when the company reports earnings. Profit estimates have been cut drastically by analysts because Schwab said they expected interest rates to decline in 2022 and 2023, so they did not hedge their inventory.
From Mark in Minnesota, who has been an email client since November 2022:
"I like your numbers but they are so bullish I have a hard time to believe you. I have held on to this spring wheat for 6 months listening to your recommendations and starting to wonder if you are a perma bull and never sell? What should I do here? I have another crop to plant if the snow ever melts."