Why? Because these banks are taking the worst route to higher earnings possible: by not just cost-cutting, but releasing reserves. For instance, of JPMorgan's highest-ever quarterly profit, one-third was a result of released reserves (draining the cookie-jar buffer), and Bank of America is also now expecting a $7 billion to $10 billion credit-card business writedown because of financial reform.
The real question is: Are banks right to release reserves? And after these earnings reports, are they worth buying? Watch for James' analysis in the Fool TV video below:
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