Earnings Great, Revenues…Not So Much (JPM, BAC, C, GS)

The Dow Jones Industrial Average has bounced back and forth across the 10,000 line since closing above it a week ago. The up days have been due to generally good quarterly earnings and a falling U.S. Dollar. The bad days have been due to some big name misses. Today it was a downgrade of Wells Fargo (WFC) and news that the “Pay Czar” was cutting compensation by 50% at seven large firms that caused the late-day decline in stock prices. Energy has been particularly strong the last few days, reminding us of those halcyon days back in 2006-2007. With crude…

Market Update: Blackrock (BLK), Toll Brothers (TOL), JPMorgan Chase (JPM), Citigroup (C)

BlackRock Inc. (NYSE:BLK) Chairman Laurence Fink says Obama administration programs to help homeowners avoid foreclosure may hinder recovery efforts in the mortgage market while benefiting banks that own second loans on the properties. “I am just very worried,” Fink said yesterday in an interview. “How do we get a vibrant securitization market back when we are doing these things in the short run that are good for the banking system and good for the homeowner but not as good as it should be?” Fink stated that the policies introduced this year to reduce foreclosures are faulty because they don’t require home-equity loans to…

Citigroup (C) and Bank of America (BAC) Post Second-Quarter Profit But May Struggle in Late 2009

Citigroup Inc. (NYSE: C) and Bank of America Corp. (NYSE: BAC) each topped estimates with second-quarter profit. But these earnings & like those of Goldman Sachs Group Inc. (NYSE: GS) and JPMorgan Chase & Co. (NYSE: JPM) & belie the sharp deterioration in the banking sector that will pose a significant threat to financial firms throughout the remainder of the year.

Citigroup said it took in $30 billion in revenue in the second quarter, nearly $18 billion more than it generated the year prior. Second quarter net income totaled $4.3 billion, or $0.49 per diluted share.

Bank of America reported a $3.2…

Equity Merchant Banks: The Financial Sector’s Profit Powerhouse of the Future

If Goldman Sachs Group Inc.’s (NYSE: GS) blowout second-quarter earnings demonstrated one thing, it’s that the new “equity-merchant-banking model” – the replacement for the Wall Street investment bank of pre-financial-crisis days gone by – is where financial-sector investors will make their money for years to come.

And there are two clear frontrunners that investors will want to watch – Goldman, and a second equity-merchant-banking firm that every financial-sector investor should take the time to know intimately.

Before we analyze both firms, however, it’s important to understand just why this transformation from investment bank to equity-merchant bank is taking place.

In the fall of…

Market Updates: Bank of America (BAC), JPMorgan Chase (JPM), General Electric (GE)

Consumer Prices Increase Less Than Expected; Ten Banks Repay TARP Debt; Bankrupt Eddie Bauer Attempts Sale; Berkshire Hathaway Options Begin Trading; FedEx Losses Mount; Saab Cuts Debt; Gas Prices Keep Going, Going, Up; Boeing Gets First Air Show Order; China Will Invest Sovereign Wealth in Hedge Funds; Analyst: S&P 500 Will Hit New Highs By 2012; Bond Yields Drop; Mortgage Apps Plunge

• Inflation fears were quelled at least temporarily as U.S. consumer prices were raised only slightly last month, and actually experienced their biggest drop in almost 60 years. Higher gas prices contributed to the 0.1% increase in the Labor Department’s…