J P Morgan Chase (JPM)

JP Morgan' commercial banking chief Todd Maclin announced that the bank will likely shrink the number of commercial loans given out. This is largely a product of decreased demand for loans, but it will force JP Morgan to remain heavily rooted in the Investment Banking side. This portion will continue to face difficulty making large profit margins - especially with increased regulation and oversight from the Executive Branch due to the Troubled Asset Relief Program (TARP).

The weak housing market is unlikely to change in the near future, with a flat or even inverted yield curve indicating uncertainty about the future of interest rates in the U.S. and the subprime mortgage lending market contributing to the depressed mortgage banking business.

JPMorgan's investment bank has been undertaking an increasing amount of risk in order to improve profits per dollar. This increasing exposure to market volatility has the potential to result in severe losses if the market takes a severe hit.

Most fixed term retail loans bill customers a fixed amount that includes principal and interest but not at Chase. If your bill is $100/month and you pay $500 in a given month the your next statement will say no payment required. Strange since most other banks will appply overage to principal and send bill next month for $100. Don't forget interest is accruing so chase customers are making 'requested/billed' payments but still not mkaing minimum interest payments. Aren't similar practices used by credit cards under scrutiny

The acquisition of Bank of New York, including a great deal of debt, exacerbates the problems facing the struggling retail financial services business. Chase's existing retail branches have been underperforming in several markets already, and adding additional branches is extremely risky.