What China’s Slowing Growth Means for You

It’s hard to be disappointed with JP Morgan’s
JPM) $1.09 a share earnings for the second
quarter. After all, analysts were looking for just $0.74 a share. But still,
JP Morgan’s 47% earnings beat isn’t being called a “blowout.”

If this has you scratching your head a little, don’t worry,
I suspect you’re not alone.

One of the big reasons that JP Morgan beat earnings
expectations so handily is that it had to set aside less loss reserves for
bad loans. That’s a good indication that the company is working its way out
of the problems created by the housing bubble.

That should be a good sign for other banks as well. If we’re
looking for banks to start lending, then clear evidence that non-performing
loans are becoming less of an issue is a step in the right direction.

But at the same time, JP Morgan’s revenues did not beat
expectations. Revenues were essentially in line, missing the forecast number
by a small amount.

Ultimately, it seems to me that Wall Street is being
impatient about the global recovery. Clear signs of improvement are not
translating into a booming economy.

Now, it seems reasonable that it would take some time for
U.S. economy to work
through the imbalances that nearly broke our banking system. But I don’t
remember the last time Wall Street was accused of being reasonable. It’s like
they are saying if we don’t see +5%
GDP growth, then we must be headed for a double dip of recession.

I saidyesterday
that we wanted to see Treasuries and gold sell off. That’s not happening.
Traders are selling the positive earnings news from JP Morgan and Intel

It’s clear that traders do not want to give up any gains
from the recent rally. There is little conviction that stocks can hold onto
their gains, even when earnings are good.

I wrote the other day that I thought Citigroup’s (NYSE:C)
had the potential to be a “sell the news” event. It’s still disappointing to
see it happen, and a day early at that.

“There’s no more tightening happening

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