JPMorgan: the reserve is adequate and the earnings path is not

This runs through the provision line. Charge-offs hit earnings through the provision, and the provision is the reserve build plus the net charge-off, so a bank can be adequately reserved and still miss badly on earnings. The credit data is in the monthly filings rather than the quarterly release. Card net charge-offs have exceeded the reserve build for two consecutive periods, and the trend has not flattened. The position: short on JPMorgan, entry locked at publication and the exit dated rather than open-ended. The target is stated in the call block above and the horizon with it. Sized to the catalyst rather than to conviction, with the invalidation written into the kill-switch card instead of left implicit. What breaks this is an unemployment move large enough to make the reserve inadequate rather than merely the earnings path wrong. That is a different and worse outcome.