Today’s greatest Wall Street mystery is why Citigroup and JP Morgan Chase have moved their earnings up by a week. Both megabanks were set to announce earnings next week until, without any plausible explanation, they decided to announce at the end of this week. So the question on everyone’s lips is: what is going on?
Both banks are expected to announce losses, huge write-downs and all-around suckiness. But that’s been happening for quite some time without the need to advance the earnings announcement. Why is this different?
Here’s our favourite theory: they’re getting the announcement out ahead of the next round of TARP spending. The government has indicated that it will tap into the second tranche of the TARP, perhaps as early as next week. It has no doubt been in discussions with Citi and JPM about how it intends to use the TARP. We suspect that the Treasury Department has told both banks that it would be a good idea for them to make their earnings announcements prior to the next bailout round.
Of course, that’s just a theory. No one we talked to seems to know anything more. So right now we’re stuck with guessing.
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