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JP Morgan Upgraded as Banking System Heals

JP Morgan decreased assets in the second quarter by $47.5 billion to $2.027 trillion, which is 14.1% of the $14.409 trillion of total assets in the banking system.

Wells Fargo (WFC - Get Report) ($41.43 vs. $44.45 on July 19) set a multi-year high at $44.78 on July 23 then traded as low as $40.92 on Aug. 30. This hold rated bank is below its 50-day SMA at $42.77 with a semiannual value level at $40.04 and this month's risky level at $44.12. My annual value levels lag at $34.17 and $32.82.

Wells Fargo increased assets in the second quarter by only $25.5 million to $1.332 trillion, which is 9.25% of the total assets in the banking system.

In total the four 'too-big-fail' banks have $6.333 trillion of the $14.410 trillion assets in the banking system which is a concentration of 43.95%, down slightly from 44.04% at the end of the first quarter. In my judgment a single bank should not be allowed to control more than 10% of the total assets in the banking system, which means that the Bank of America and JP Morgan should be forced to reduce assets.

At the time of publication the author held no positions in any of the stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Richard Suttmeier has an engineering degree from Georgia Tech and a master of science from Brooklyn Poly. He began his career in the financial services industry in 1972 trading U.S. Treasury securities in the primary dealer community. In 1981 he formed the Government Bond Department at LF Rothschild and helped establish that firm as a primary dealer in 1986. Richard began writing market research in 1984 and held positions as market strategist at firms such as Smith Barney, William R Hough, Joseph Stevens, and Rightside Advisors. He joined www.ValuEngine.com in 2008 producing newsletters covering the U.S. capital markets, and a universe of more than 7,000 stocks. Richard employs a "buy and trade" investment strategy and can be reached at RSuttmeier@Gmail.com.
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