“We don’t know when the recovery is,” Chief Executive of JP Morgan Jamie Dimon said on a conference call with investors this morning.  JP Morgan is the first of major banks to report its fourth quarter earnings for 2009.  The report exceeded expectations as analysts consensus for JPM shares was $.61 per share and actual earnings for the fourth quarter of 2009 were $.74.   There are 3.95 billion shares outstanding of JPM.

Is JPM’s success a sign of how other banks will fare, is it a sign of a recovery?  Maybe, maybe not.  The earnings for JPM were largely fueled by employee compensation - or the lack of compensation.  Usually investment bankers are compensated 45-50%, but JPM compensated their investment bankers only 33%.  When examining JPM’s actual business of commercial banking the earnings don’t look as strong.  JPM suffered losses on loans and credit cards, essentially consumer credit.  Does that mean consumer credit is down?  Let’s take a look.

Clearly credit has taken a hit in this last recession.  Zooming in we can see how severe a hit.

Obviously there has been a huge pull back in the credit markets, even with the governments infusion of capital.  We’ve already began to see the effects, wholesale and consumer loan banks shrank twenty-two and eleven percent compared to the fourth quarter last year.  It will be interesting to see if the rest of the big banks post losses in consumer credit as JP Morgan did or if they found a way to turn a profit off of it.

CPI numbers were also released today showing a .1 percent rise from November, analysts had forecast .2 percent.  This signals that the inflation feared by the Fed’s credit expansion and low interest rates policy has not yet taken hold.