Comment by phil

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phil
April 16th, 2014 at 9:17 am

Good morning!  

That chart doesn't tell the whole story, StJ – those individual taxes are unfairly burdened on the bottom 90% as well, who pay 50% more of their income to taxes than the top 1% – and that doesn't even account for the massively disproportionate effect property, sales and local taxes have on them:



Euro/StJ – Also, don't forget Draghi flat out said they will take drastic action to keep a lid on the Euro here.  Probably makes FXE a good short ($136.50) – certainly they don't want to see $140 and you can sell Jan $140 calls for $1.65 to help fund a $140/134 bear put spread at $3.10 for net $1.45 on the $4 spread.  

Even the poor/StJ – I hate that argument.  I guess, a few decades ago, they could have said that even the poor have access to electricity that only the rich had decades ago and, when electricity rolled out, they could have said at least the poor now enjoy running water.  It's a ridiculous argument to excuse gross inequality by comparing what comforts the poor do have to abject poverty, as opposed to comparing your 17" wide airplane seat (if you can even afford that) to a private jet, which is what's actually happening.  

Meanwhile, oil (/CL) tagged $104.50 and now that's bouncy.  

BAC/Sibe – I'm not bearish on them, or even the financials in general.  BA's numbers were skewed by massive litigation costs last Q – otherwise, they did pretty well.  

Ex-litigation, BofA beats forecasts

• Adjusted EPS of $0.35 compares to estimates of $0.27, with the $6B settlement weighing on the headline EPS loss of $0.05.
• Net interest income of $10.3B fell 5% Y/Y, with NIM of 2.36% up six basis points. Noninterest income of $12.5B is flat from last year, with lower mortgage banking income and trading profits offset by increases in investment and brokerage income, equity investment income and gains on the sale of debt securities.
• Provision for credit losses of $1B is down 41%. Net charge-offs of $1.4B down 45%, with net charge-off ratio of 0.62% comparing to 1.14% a year ago. Reserve release of $379M vs. $804M a year ago.
• Noninterest expense of $22.2B is up from $19.5B a year ago, with higher mortgage litigation costs ($6B vs. $2.2B) partly offset by cuts in Legacy Assets and Servicing (LAS). Excluding litigation, expenses fell $1.2B Y/Y.
• Other highlights: Mobile banking customers up 19% to 15M – more than 10% of deposits now done through mobile; first mortgage originations fell 65% Y/Y, with production revenue of $273M comparing to $815M a year ago; Wealth Management net income of $729M vs. $721M a year ago.
• Basel III Common equity ratio of 11.8% up from 11.7% at 2013's end. Tangible book value per share of $13.81 up $0.02 from year's end and from $13.36 one year ago.
• CC live on Seeking Alpha at 8:30
• Press release, Q1 results
• BAC flat premarket in active action