Blowout bank earnings

 

#duh

⚠️BREAKING:

*JPMORGAN CHASE SHARES EXTEND GAINS PREMARKET AFTER Q1 RESULTS, LAST UP 6.5%

*WELLS FARGO STOCK UP 2.5% AFTER Q1 EARNINGS BEAThttps://t.co/PVjilxCOOw$JPM $WFC pic.twitter.com/ZRkfTTkSNF

— Investing.com (@Investingcom) April 14, 2023

Ok let’s look at this from system perspective … total S&P 500 market cap is reported $34T and trailing earnings yield is reported 4.17%.     

$34T x 0.0417= $1.4T S&P500 total earnings…

Let’s just look now at what the Fed is paying banks in IOR:  5% IOR  on 3T reserves = $150B annual of USD reserve transfer to banks with no corresponding liability… accrues directly to capital/retained earnings…

$150B / 1.4T  total earnings = 10.7% … 

so .. Fed is giving certain S&P500 components almost 11% of the total 500 TTM earnings as free munnie…

AND hold up… this does NOT include what other  S&P500 industrial firms are getting directly from Treasury in interest on their retained earnings being saved in USTs and from Bill discounts…

Total S&P500 cash is nearly $3T so now 5% UST interest on that $3T USD savings is almost another $150B…

Government currently providing S&P firms with almost 20% of previous ZIRP era earnings as free munnie…

🤔