And on the page, you see we had a few significant items for the quarter, and these [largely] offset each other, and we’ll go through them as we go through the presentation. But what you don’t see on the page is we also had a number of smaller items, many of which we’ll mention when we go through. For example, we made a contribution to our foundation and realized some securities gains this quarter. These smaller items also largely offset slightly to the negative. So for the full year, we generated record net income of $21.3 billion, or $5.20 a share, on revenue of $100 billion, flat year over year. Return on tangible common equity was 15% for both the quarter and the year, and in fact, as Jamie said, this is the third consecutive year of both record net income and 15% return on tangible common equity. And before I turn to the businesses, I would characterize the overall performance of the quarter as strong performance across our businesses and highlight four themes. First, the positive trends in market share that we’ve been seeing continued this quarter. Year over year, we saw strong continued deposit growth of 10%. Mortgage origination volume is up 33%, and sales volume in card up 9%. Also, the number one ranking in global IDCs including record debt underwriting fees, record assets under custody in CIB, record revenue in commercial banking, and record revenue and AUM in asset management. Second, we continued to see positive year over year loan growth. On a reported basis, the total loans for the company were up 1%, but excluding runoff portfolios, our core loan growth was 9%, with record loan balances in commercial banking up 14%, record business banking loan balances up 7%, and record asset management loan balances…

And on the page, you see we had a few significant items for the quarter, and these [largely] offset each other, and we’ll go through them as we go through the presentation. But what you don’t see on the page is we also had a number of smaller items, many of which we’ll mention when we go through. For example, we made a contribution to our foundation and realized some securities gains this quarter. These smaller items also largely offset slightly to the negative. So for the full year, we generated record net income of $21.3 billion, or $5.20 a share, on revenue of $100 billion, flat year over year. Return on tangible common equity was 15% for both the quarter and the year, and in fact, as Jamie said, this is the third consecutive year of both record net income and 15% return on tangible common equity. And before I turn to the businesses, I would characterize the overall performance of the quarter as strong performance across our businesses and highlight four themes. First, the positive trends in market share that we’ve been seeing continued this quarter. Year over year, we saw strong continued deposit growth of 10%. Mortgage origination volume is up 33%, and sales volume in card up 9%. Also, the number one ranking in global IDCs including record debt underwriting fees, record assets under custody in CIB, record revenue in commercial banking, and record revenue and AUM in asset management. Second, we continued to see positive year over year loan growth. On a reported basis, the total loans for the company were up 1%, but excluding runoff portfolios, our core loan growth was 9%, with record loan balances in commercial banking up 14%, record business banking loan balances up 7%, and record asset management loan balances…

And on the page, you see we had a few significant items for the quarter, and these [largely] offset each other, and we’ll go through them as we go through the presentation. But what you don’t see on the page is we also had a number of smaller items, many of which we’ll mention when we go through. For example, we made a contribution to our foundation and realized some securities gains this quarter. These smaller items also largely offset slightly to the negative. So for the full year, we generated record net income of $21.3 billion, or $5.20 a share, on revenue of $100 billion, flat year over year. Return on tangible common equity was 15% for both the quarter and the year, and in fact, as Jamie said, this is the third consecutive year of both record net income and 15% return on tangible common equity. And before I turn to the businesses, I would characterize the overall performance of the quarter as strong performance across our businesses and highlight four themes. First, the positive trends in market share that we’ve been seeing continued this quarter. Year over year, we saw strong continued deposit growth of 10%. Mortgage origination volume is up 33%, and sales volume in card up 9%. Also, the number one ranking in global IDCs including record debt underwriting fees, record assets under custody in CIB, record revenue in commercial banking, and record revenue and AUM in asset management. Second, we continued to see positive year over year loan growth. On a reported basis, the total loans for the company were up 1%, but excluding runoff portfolios, our core loan growth was 9%, with record loan balances in commercial banking up 14%, record business banking loan balances up 7%, and record asset management loan balances…

Glenn Schoor – Nomura:

Glenn Schoor – Nomura:

No, we’re required under Dodd-Frank to disclose our stress test. In March. We’re going to do it almost immediately after the Fed’s report. And remember, we do hundreds. The Fed is four. So we look at multiple kind of stress tests, and we’re going to try to give you a full view of how we look at the company under stress. I should point out that a lot of you did it yourselves in the past. You were pretty accurate, some of you. Glenn Schoor – Nomura:

Just to give you a view, we have $200 billion of equity and $250 billion of unsecured debt. That’s $450 billion. That’s a lot of capital before anyone else bears a loss. It’s not clear to me that subordinated versus just unsecured, and it would take time to develop those markets. You know, if a bank has 50-50 or obviously it changes the nature a little bit over time. So it will take time to develop, but I think we’re working with the authorities to get it right, to do the analysis right, to have the right numbers. I think you’ve got a little time before someone says it has to be this amount. Remember, we’ve got Basel I, Basel II, Basel III, OLA, LCR, NSF. Just, it will take a little bit of time. I do want to point out that we fully intend, in late 2013, to be at 9.5% Basel III, and to be fully compliant with LCR.

Our next question comes from the line of Brennan Hawken of UBS.

So, you all are about to start buying back stock here in the first quarter, and the share price is at about $45. Ironically, this is the price point, historically, where there’s been an indication of some price sensitivity. So maybe I was hoping for an update on your thinking on that front?

We had given you some numbers in our annual report last year, about where it’s a no-brainer to buy back stock, which [unintelligible] has tangible book value. Tangible book value is now $38 or $39, so it’s gone up almost $5 this year. So we still think, if you haircut earnings and buy stock at these prices, it’s probably still a good deal. We got permission to buy back $3 billion in the first quarter. Obviously it’s going to be a little price sensitive, and then CCAR will set what we can buy back for the next four quarters after that.

So basically we can look at the tangible book value growth versus the last comments, and imply from there?

You can do the same numbers, at today’s prices. If you want to be conservative, discount earnings, buy back stock. At the end of a two or three year period, you’ll have higher earnings per share, and higher tangible book value per share, even at these prices. Seems like a pretty good deal to me. You have a good company, and you’re not going to need the capital down the road. I’m not talking about for one year, but down the road.

We talked about the third quarter peaking over 200 basis points. We saw the margins compressing from 40 or so basis points in the quarter, and we do expect that to continue into 2013, not at that level. If you go back in time, you would see gain on sale margins more in the 65 basis points. I don’t know if that’s where it will end, but certainly we expect for that to be seen through 2013, but with gaining market share. We hope to keep our volumes up. Brennan Hawken – UBS: We talked about the third quarter peaking over 200 basis points. We saw the margins compressing from 40 or so basis points in the quarter, and we do expect that to continue into 2013, not at that level. If you go back in time, you would see gain on sale margins more in the 65 basis points. I don’t know if that’s where it will end, but certainly we expect for that to be seen through 2013, but with gaining market share. We hope to keep our volumes up.

We talked about the third quarter peaking over 200 basis points. We saw the margins compressing from 40 or so basis points in the quarter, and we do expect that to continue into 2013, not at that level. If you go back in time, you would see gain on sale margins more in the 65 basis points. I don’t know if that’s where it will end, but certainly we expect for that to be seen through 2013, but with gaining market share. We hope to keep our volumes up.

We talked about the third quarter peaking over 200 basis points. We saw the margins compressing from 40 or so basis points in the quarter, and we do expect that to continue into 2013, not at that level. If you go back in time, you would see gain on sale margins more in the 65 basis points. I don’t know if that’s where it will end, but certainly we expect for that to be seen through 2013, but with gaining market share. We hope to keep our volumes up.

We talked about the third quarter peaking over 200 basis points. We saw the margins compressing from 40 or so basis points in the quarter, and we do expect that to continue into 2013, not at that level. If you go back in time, you would see gain on sale margins more in the 65 basis points. I don’t know if that’s where it will end, but certainly we expect for that to be seen through 2013, but with gaining market share. We hope to keep our volumes up.

We talked about the third quarter peaking over 200 basis points. We saw the margins compressing from 40 or so basis points in the quarter, and we do expect that to continue into 2013, not at that level. If you go back in time, you would see gain on sale margins more in the 65 basis points. I don’t know if that’s where it will end, but certainly we expect for that to be seen through 2013, but with gaining market share. We hope to keep our volumes up.

We talked about the third quarter peaking over 200 basis points. We saw the margins compressing from 40 or so basis points in the quarter, and we do expect that to continue into 2013, not at that level. If you go back in time, you would see gain on sale margins more in the 65 basis points. I don’t know if that’s where it will end, but certainly we expect for that to be seen through 2013, but with gaining market share. We hope to keep our volumes up.

We talked about the third quarter peaking over 200 basis points. We saw the margins compressing from 40 or so basis points in the quarter, and we do expect that to continue into 2013, not at that level. If you go back in time, you would see gain on sale margins more in the 65 basis points. I don’t know if that’s where it will end, but certainly we expect for that to be seen through 2013, but with gaining market share. We hope to keep our volumes up. Betsey Graseck – Morgan Stanley: We talked about the third quarter peaking over 200 basis points. We saw the margins compressing from 40 or so basis points in the quarter, and we do expect that to continue into 2013, not at that level. If you go back in time, you would see gain on sale margins more in the 65 basis points. I don’t know if that’s where it will end, but certainly we expect for that to be seen through 2013, but with gaining market share. We hope to keep our volumes up.

We talked about the third quarter peaking over 200 basis points. We saw the margins compressing from 40 or so basis points in the quarter, and we do expect that to continue into 2013, not at that level. If you go back in time, you would see gain on sale margins more in the 65 basis points. I don’t know if that’s where it will end, but certainly we expect for that to be seen through 2013, but with gaining market share. We hope to keep our volumes up. Betsey Graseck – Morgan Stanley: We talked about the third quarter peaking over 200 basis points. We saw the margins compressing from 40 or so basis points in the quarter, and we do expect that to continue into 2013, not at that level. If you go back in time, you would see gain on sale margins more in the 65 basis points. I don’t know if that’s where it will end, but certainly we expect for that to be seen through 2013, but with gaining market share. We hope to keep our volumes up.

We talked about the third quarter peaking over 200 basis points. We saw the margins compressing from 40 or so basis points in the quarter, and we do expect that to continue into 2013, not at that level. If you go back in time, you would see gain on sale margins more in the 65 basis points. I don’t know if that’s where it will end, but certainly we expect for that to be seen through 2013, but with gaining market share. We hope to keep our volumes up.

And my own feeling is, it will obviously normalize over time, but it may not go that low, because our expenses could also be permanently higher. To be in the business is going to cost more money. And obviously that will be part of what you have to earn back.

Our next question comes from Ed Najarian of ISI Group.

Any update with respect to how quickly you expect your Basel III risk weighted assets to decline? We saw a little bit of a decline this quarter. Expecting more decline. But is there any change in the outlook for the pace of that decline, or how you’re thinking about it?

The number that Marianne showed you is the Basel III, tier one common, was 8.7. If you look at what I call, for the next two years, passive mitigation. That’s runoff and what I call normal models. So we still have to get certain models in there that -- And this is not arguing with anybody, just models that should be put in place -- that would add almost 1% to Basel right off the bat. About $100 billion of that would be models. $80-100 billion of that would be models. Part of that’s the runoff of some debt or credit which is obviously coming down over time. The other thing, which I think you’re going to see is, you know, we’re pushing Basel III down at a very detailed level. I think, over time, you’re going to see that drive down Basel RWA even more. And there are things in Basel that I don’t know what the future portends. We have $200 billion plus of operational RWA in there now. That’s like $16 billion of capital. That’s driven very high by obviously the mortgage litigation and stuff like that, some of which will go away. So one day, that $200 billion should come down a lot too. I just don’t know the timetable for that.

Okay, and then just a quick follow up to that. You mentioned wanting to get to 9.5% by the end of 2013.

I didn’t mention it. We are going to get there late in 2013, whatever it takes.

Okay. Along with that, we see a number of companies sort of building a little bit, 50 basis points or something like that, of sort of a buffer on the buffer to account for AOCI fluctuation and things like that. For you guys, maybe getting up to 10% or wherever the ultimate endpoint is, is that more of a ’14 event? Or is that also something that you would like to get done this year?

Maybe we have to have a buffer. We don’t know what the final rules are for capital. So you already have a conservation buffer, to go below what happens. Obviously, OCI could be a big swing. We had modeled that like 300 basis points would be $20 billion after taxes or something like that. But you can handle that too, because it’s going to come in overtime, and you can manage your balance sheet going forward, your stock buyback going forward. So we really need to see the future rules to make that determination. If we need a buffer, we’ll have a buffer. Whatever that is, we’re going to go there right away too, but we just don’t know what it is yet. And we don’t know whether CCAR is going to drive capital or the conservation buffer is going to drive capital, or whatever. And we don’t know how the [G sif V] exactly works, even though we know with the 2.5% we’ll probably find ways to reduce that over time. So we have plenty of capital. Right now, far more than I personally think we need. But we have plenty of capital.

Well, I think everyone’s trying to sort of do math on how much capital you might return this year. So all of those questions…

Well, unfortunately, that’s a one-year thing, okay? And I should point out, before you ask, that when we started the dividends, we said that the intent would be to increase them a little bit every year, so you should have expected to see that. We’re going to ask for less capital return from stock buyback than we have in the past. So I can do $3 billion in the first quarter. We’re going to do less, because we’ve determined -- and this is a board-level determination too --- that we want to get to $9.5 quicker. And we don’t exactly know how these stress tests work. So we think, under severe stress, we’d have plenty of capital, but last time the Fed’s numbers were very different. We don’t understand that. And the way CCAR was done this year, it has even more volatility. Basel 2.5 is far more volatile in how you calculate RWA, OCI, and all that than the old Basel I test. So we’re being a little cautious, which I think is what, obviously, the Fed expected people to do.

Erica Panella – Bank of America Merrill Lynch:

Erica Panella – Bank of America Merrill Lynch:

Erica Panella – Bank of America Merrill Lynch:

John McDonald – Sanford Bernstein:

We’ll do that for you at Investor Day in a lot of detail. I think the way to think about our adjusted expenses going forward, you should think about them being flat to down in terms of direction. And we’ll go through all of that for you in February. John McDonald – Sanford Bernstein: Is that the right number, like flat to down from around that $49 billion or so level?

Yeah, around $50 billion. John McDonald – Sanford Bernstein: And then that excludes litigation. It looks like litigation for the full year came in about $3.7 billion. That’s down from $4.5 billion the year before. Do you expect that trend of declining litigation expense in ’13?

One day, we hope. [laughter]

Yeah, we can’t predict the litigation expense. I’m sorry.

The one part that I just want to reiterate is that obviously that’s the one that’s going to be lumpy, and to be ongoing, except the part relating to mortgages. And we’ve done a lot of work on, and we’re hoping that we’re properly reserved there, and they’re not going to see duplication of that. And the last couple years of litigation, a lot of it related to mortgages. Not all of it, but a lot of it. John McDonald – Sanford Bernstein: And then on the buybacks, the first quarter is usually a big issuance quarter for you on shares? But knowing you have approval for $3 billion of gross repurchases, do you expect to have a net reduction in your share count by the end of the first quarter?

You got me there. I think if we buy back $3 billion, and what we issue -- I think your issue amortizes in over time as you issue it. So my guess is it will go down a little bit in the first quarter. When you issue a restricted stock, it doesn’t immediately go into fully diluted. That goes in as it amortizes. Remember, this stuff amortizes over three years, generally. John McDonald – Sanford Bernstein: For 2012, your share count didn’t go down. That’s because you suspended the buybacks. But you just didn’t do enough in the first quarter to take the share count down. I assume you’d like to see it decrease at some level.

If we spend the whole $3 billion, my guess is it will go down, yeah. John McDonald – Sanford Bernstein: And then when you say you’re going to ask for less, just to clarify, you mean you’ll ask for less than $3 billion per quarter?

Yes. John McDonald – Sanford Bernstein: Okay. Last thing, on risk weighted assets, it looks like your assets were up 2%, but Basel III RWA came down. What drove that delta? Are we starting to see the mitigation take effect?

I think in part that’s it. I can get back to you with more specific details. It did come down slightly in the quarter. It does reflect the combination of our full understanding of all the rules, plus some model changes and everything else in the quarter and BAU activity, but we can get you more detail. John McDonald – Sanford Bernstein: And one more thing, your net interest income grew in the fourth quarter, despite the NIM headwinds and the runoff. And I understand your NIM percentage outlook, but I guess what helped you grow NII dollars this quarter, and do you think you can grow NII dollars in 2013?

We’re continuing to grow our deposits very strongly. We continue to grow our loans very strongly. You saw core loan growth up 9%. So all in all, we’re generally holding pace with NIM compression and hope to do the same next year, plus or minus.

Our next question comes from Mike Mayo of CLSA.

Just first, a factual question. How much were fourth quarter performance fees in asset management?

It was bettered by over $100 million versus the fourth quarter last year. The fourth quarter last year wasn’t particularly good, by the way.

Okay. My main question is, does the CIO incident change how JPMorgan is run? And as you said, you’ve had record net income, 15% return on tangible equity. I think you said in the past, or someone at JPMorgan at least implied, that the CIO incident shouldn’t change things. On the other hand, you have the new cease and desist orders, regulatory actions by the Fed and the OCC, and this change reporting format is the most radical that’s ever been put in place since Jamie you’ve been CEO, and then all the changes in management. You have a new head of consumer, commercial, investment bank, international, CFO, CIO. So on the one hand, you highlighted the record net income, I guess my question goes to sustainability of the results over the next several years, given how many people have changed the change reporting format and the regulatory action. Maybe it’s like if you’re driving on the Long Island Expressway, and you get a ticket for going 80 miles per hour, then you drive 50 miles an hour. Is that just completely off?

Completely off. You raise a lot of subjects. Let me do them one by one. Obviously when you have a problem like the [whale], you have mistakes, which you should acknowledge, and then fix. So we obviously fixed CIO, totally, 100%. People in it, reporting, risk, controls, committees, guidelines. And we don’t do synthetic credit there at all. Okay? But some of those mistakes obviously scared us, and we went and checked everywhere in the company. So we’re fixing certain things across the company. Not that they’re bad. They’re not disasters, but they require fixing. And so when you have an accident like that, you want to say we’re going to use this to get stronger, better, smarter, tougher. And we have to, and we’re going to, obviously, meet every demand of the regulators. So we’ve got real resources doing it, we’ve already done a lot of it. We’re going to continue to do more. So yeah, there were changes from the whale. Number two, we’re in business to build the business over time by serving clients. That’s what we do. We take risks, we make loans. You take risks when you invest money. You take risks when you build systems and branches. But that’s what we’ve been doing consistently, and I hope you see, in the underlying numbers, more branches, more bankers, more custody, more trading, more products, more services, more countries, happier clients. In every business. Record results in commercial banking, asset management, and a lot of cross-sell on that. And we’re going to do a lot more to describe to you to competitive benefits that we get in this company because the different business units work together and things like that. So that part of the business hasn’t changed. That’s why we’re here. Even CIO has always…

I guess we’ll hear more at Investor Day next month, but what are you watching for since there’s so much rotation among top managers around the same time? What are you looking for to ensure that this current team will work?

Well, look, you should get to know them, but you can evaluate their quality, their integrity, their brains. And Marianne, of course, has been here a long time. Matt Zames, who’s now co-chief operating… and Frank Bisignano, have both been here a long time. So these are long-tenured, very good, respected employees. And so I know it’s going to work. Obviously, you have to make that evaluation yourself.

Then last follow up, does your positioning to ask for less than $3 billion per quarter in buybacks have anything to do with the regulatory actions that recently came about?

Not really. But you know, the CCAR does have this qualitative aspect, which I don’t know exactly what that means, but not really. It really related more to the stock price is higher, and the desire to get to 9.5 quicker. And everyone’s been doing it, and obviously we shouldn’t lag. That’s all.

Our next question comes from Moshe Orenbuch of Credit Suisse.

Jamie, I was wondering if you could talk just a little bit about, given the strong results that you’ve got and the hopes of continuing to drive them, which areas you think are the best in terms of where you can see investment in either share gains or growth into 2013?

And just, Mike Mayo, because you had me do a little work after one of your reports came out about stock price. So do this yourself. Take the BankOne stock price from the day before I got there to today, and take JPMorgan’s stock price from the day we announced the deal to today. Compare it to the S&P, the bank index, or all other major firms, and it’s actually rather good. It outperformed in both cases. The bank by a long shot. In both cases the S&P, not by a long shot, but by a significant margin, and almost most other financial companies. So obviously something’s been working a little bit here. Opportunity? I think the opportunities are fabulous. Next year we’re going to focus a tremendous amount of regulatory requirements, these consent orders, getting things done. But also just organic growth. Small business, Marianne mentioned, is up almost everywhere. Partially in Florida and California, where WaMu gave us the opportunity to do that. We opened our 1,000th branch in California. We’re still going to open net over 100 branches this year. Our credit card’s been growing. The Chase private client, we’ve gone from 250 branches to 1,200 with Chase private client. That number is going to go up to 2,000 next year. It’s really working. So it’s growing dramatically. Our mutual fund complex has been growing. The global corporate bank has opened multiple branches overseas. We’ve gone from 120 global corporate bankers to 286 or something, and it’s going to be north of 300. And it’s working. If you look at investment banking revenues, out of the commercial bank, when we first got here I think it was like $450 million. This year it hit almost $2 billion. and we think the opportunity continues to grow large. So in almost every single business, we see very good opportunities to grow, and obviously we operate in a difficult world in financial services, but the investment bank has been [unintelligible] the numbers, but we don’t see why we can’t continue to grow that around the world and serve more clients in more places, like Colombia or some of the emerging markets. And in commercial banking, we opened branches in states we don’t have branches, which has been focused on kind of larger clients and international. That’s working well. International commercial banking is working well. And all these numbers are in here. You can actually go through it too. They’re all pretty good. And you’re going to see us continue to focus and grow those businesses in a quality way.

Just as a separate issue, you’ve obviously responded to the orders from both the SEC and the Fed. Are there any kind of impacts while those are out there until they’ve kind of deemed them to be kind of fully dealt with? And what’s the timeframe for that?

We’re already fully engaged in meeting all of those consents. And other regulatory demands. Remember, we have changing rules and requirements. We also have a lot of items that the regulators have asked us to focus on, the consent orders. So yeah, it’s a tremendous amount of resource, but it’s not going to change numbers you see. It’s just a lot of people involved in risk, credit, [unintelligible] compliance, audit, HR, all really involved in getting a lot of this stuff right. And we have to do that. And people in the business too of course.

Our next question comes from Matt O’Connor of Deutsche Bank. Matt O’Connor - Deutsche Bank: A couple of questions in the mortgage banking business, and as you think about the mortgage asset. The first one is, what’s your appetite, either now or as you look forward, to actually porfolioing some of the mortgages you originate?

Yeah, so Matt, you would have seen that we pretty much portfolio all jumbos we originate right now. We price them to great returns, and we will continue to do that. We like that asset. I think, overall, across the firm, we did $5 billion of jumbo this quarter. And so you should expect to see that continue.

I would just add that one of the things you learn to live with a little bit is that you could put a mortgage on your balance sheet, and earn, you know, 3.75 or 4 if it’s a jumbo, or something like that. It doesn’t have OCI. It holds more capital, but it might be a wiser thing to do than taking the gain on sale and then buying an MBS at 2.25. So there’s all these opportunities to think through how to manage in the new world, properly, both for the client, and for the shareholder. Matt O’Connor - Deutsche Bank: That’s really where I was getting to, because I think you have one of the shorter MBS books out there. Obviously has a strong mortgage origination platform, and as we strip out kind of the legacy residential mortgages, what you’re left with is not a huge number. So just trying to gauge what the appetite might be.

And that may change over time, and get bigger. So we are doing a little bit more, and right now it’s the jumbos, and we’ve done a little bit of, like C-pluses and stuff like that. But there may be others. Matt O’Connor - Deutsche Bank: And then maybe somewhat related, as we think about just the underwriting standards in the mortgage business…

I should point out also, we would much prefer loans than securities. Like in commercial bank, credit card, etc. The reason we have securities is we can’t generate that kind of loan right now. Matt O’Connor - Deutsche Bank: And as we think about underwriting standards in the mortgage business, we can see from the average FICO scores that the banks do collectively, that Fannie and Freddie back, still quite high. There’s been some good progress with the legacy issues, not just for JP Morgan, but for the industry as a whole, got the new guidance from the CFPB, home prices going up. What else do we need to see for banks to loosen underwriting standards in mortgage a bit?

You know, I think the QM was a really big start, and kind of well though through. But it also needs to be coordinated with Basel III, some of these NPR rules, this whole thing about OCI. So all these things are going to affect mortgage a little bit. And a lot of players are involved in that who have to coordinate it. But I do think over time it will open up the mortgage markets. How [rep and] warranty is going to be handled, etc. [QRM], skin in the game. I think securitization will be important. So, you know, if I was the government, I’d want to get QRM and securitization rules fixed as quickly as I can, to allow people to start.

Our next question comes from Matt Burnell of Wells Fargo Securities.

Maybe a question for Marianne. I noticed that the global liquidity balance was up about $50 billion quarter over quarter to just a little bit under $500 billion. Is that in line with your guidance that you’re going to meet the LCR requirements by the end of the year? Or is there something else going on there?

I would say that’s [unintelligible] in line with that. We have excess cash, and excess capacity at central banks, and that’s what that reflects.

They’re two different numbers, but they move in the same direction. And we’ll probably disclose more about that at Investor Day too.

And how much of an effect, if any, was that on the margin in the quarter?

Not much.

The average yield on the investment portfolio is coming down a little bit every quarter. That will continue for a while.

Your next question comes from Gerard Cassidy of RBC.

Could you tell us what the duration on the securities portfolio is?

We haven’t disclosed it for the fourth quarter.

What was it last time?

It was like three.

Interest duration. So it’s probably about the same. But I think the important way to look at it is we would benefit from rising rates. So I’ve always said that that portfolio is subordinated to the interest of the company. It’s very short. You couldn’t extend that duration on a lot more income, but then we’d be hurt by rising rates. And we break out the earnings risk from rising rates. The whole curve goes up about 100 basis points. It’s about a $2 billion plus, pre-tax. And that comes through the investment portfolio and loan repricing, etc.

How much would you estimate, at the long end of the curve, would you need to see the long end of the curve go up to mitigate the margin pressure, so that you could actually see maybe margins not go down?

Offhand, it’s hard for me to say that, but I’m going to guess it’s like 30 or 40 basis points. It’s not a lot. To neutralize it. To eliminate. Something like that.

The other question, and I apologize if you guys already gave this answer, but what was the gain on sale of mortgages this quarter?

The margin?

Or the dollar amount?

I think it’s in the supplement.

It’s in the production revenue.

Yeah, it’s in production revenue, which I think was close to $800 billion.

What was the spread, like 3%? The revenue spread?

Revenue was over 3-3.5%...

So take 3.5 times 50…

We’ll do the math for you.

Okay. And then coming back to the return of capital, Jamie, I know at a stock price you’re not going to want to buy back your stock. I’m not asking for that stock price. But let’s assume for a moment bank stocks do well this year. Your stock gets to that level where you’re not real comfortable buying back. Would you guys consider as the excess capital builds up on the balance sheet and the Fed limits your regular dividend to maybe 30% of earnings, would you consider special dividends as an avenue to give back that excess capital if you feel you’re not comfortable buying back the stock at the price at some future level?

Well, first of all it’s a board-level decision. And in some ways it’s a nice problem to have. But the way you set the question up, you almost have no option. You can’t buy back stock, and you can’t raise your dividends. All you have left is something like that. So we’ll get there when we get there. I mean, we need to see all the new rules and how they’re going to apply, like this conservation buffer. And we may know more by Investor Day, but when we know more we’ll let you know.

Our next question comes from Christopher Wheeler of Mediobanca.

First, on the latest reorganization, I guess that comes really in the light of having completed the integration of both Bear Sterns and Washington Mutual, and makes complete sense. But have you actually set any targets in terms of both the revenue and cost synergies you think you might achieve in the medium-term? That’s the first question. And the second one was on the $80-100 billion of RWA you think you could shed by reworking your models, something, ironically, you’ve been pretty critical about in the past in terms of the Europeans’ view on that. But can you just tell me, is it getting more difficult to do that in the market at the moment when we are getting some pushback from [Bal] on some of the risk weighted asset calculations, or are you finding it pretty straightforward to actually negotiate that?

The first one is, obviously we do budgets and stuff. We put targets in place about things we’d like to accomplish. We’re not going to disclose it to you, but I did say that we do think it’s going to enhance revenues and reduce expenses a little bit. So a little bit is in there for the CIB and a little bit in there for consumer. And we will disclose more at Investor Day about kind of cross sell and how we look at it, and where we think we can benefit, etc. And if you look at risk-weighted assets, our balance sheet is $2.4 trillion. We’ve got $200 billion of money deposited, central banks around the world are in repo. Very short term investments. $350 billion in AA securities, and $400 billion in securities borrowed or resales. We have a really, really liquid balance sheet. I just mentioned almost a trillion dollars of very short term stuff that’s sitting there on our balance sheet on the asset side, and our risk-weighted assets are now $1.65 trillion. They’ve gone up dramatically, because of Basel 2.5, the fact we don’t have certain models in place, but we accept it. So some of the benefit is going to be, I’m going to call it runoff. Some is from models that the regulators expect people to design and put in place that we don’t have yet. We just don’t have the history. We haven’t done the modeling. And a lot of that’s around credit-related, synthetic credit type stuff, securitizations, and things like that. So we’re going to put those in place. And that’s not arguing with regulators, they would expect us to do that over time. Obviously, regulators, I know they’re going to look at how people do models around the world, and they want it done fairly, etc.

Our next question comes from Marty Mosby of Guggenheim.

Jim Mitchell – Buckingham Research:

Jim Mitchell – Buckingham Research:

You’ve got to do it a little bit by business, because I think in consumer, mostly [sticky], but it’s probably a little bit of tag… Give us an estimate for that.

Yeah, like $5 billion. Mostly those deposits we would consider core [unsticky].

And you know, TS&S is a lot of seasonal year end deposits, so bouncing all over the place. Asset management, I put in the sticky category. Commercial banking has been kind of flat, but it’s sticky. It’s flat because their loans are starting to grow, and it’s huge. Our commercial has $190 billion of deposits. I think that number was $100 billion three and a half years ago. So they have a lot of money there. We actually expect that might have come down one day, as companies start to grow and expand more aggressively, which would be a good thing.

Our next question comes from Guy Moszkowski of Autonomous Research

The first question is a little bit short term, so forgive me. But the CSPC, as somebody mentioned earlier, did push back the timing of some of the OTC reforms with respect to central clearing. And definitely the question is, from your point of view, all other things being equal, should we expect stronger fixed income revenues as a result of that in the first half than we otherwise might have?

That’s a woulda-coulda-shoulda. I don’t know the answer to that question. I think they’ve been put in place… It depends how they would have ultimately been put in place. So they were delayed, to get more work on how it gets done. I think if they’d been put in place for JPMorgan where the rules constrained us overseas, but didn’t constrain other companies overseas, we would be down from what we might now have. If the rules were put in place so we can compete freely in Frankfurt, London, Singapore, and Shanghai, my guess is our U.S. revenues would have been down a little bit, our international revenues would have been up a little bit.

My other couple of questions have to do with your outlook slide. First, corporate private equity, I just want to make sure that there’s no distinction that I should read in. When you talk about Treasury and CIO, you talk about the net loss of $300 million plus or minus specifically in the first quarter. When you talk about the other corporate $100 million, you don’t mention a timeframe. So does that mean that you expect more potential variability over, say, the course of this year in the Treasury and CIO number than the other number, which is more of a run rate?

No. So, private equity is $8 billion invested. We expect to earn a return on that. We obviously have been getting great return on it. So that’s lumpy, but it should be more than $50 million on average. Think of the Treasury as it’s NII. It’s fairly predictable. NII is fairly predictable by quarter. That number will go down a little bit. That’s just how we allocate capital and funds between all the business units. And then how we invest the assets. So we can change that tomorrow by having longer duration of our investment portfolio. The lumpier part of Treasury and CIO is when we have mark-to-market gains or securities gains. That bounces around a little bit. And again, some of that’s discretionary. So we should almost call it a net loss. And that number, I think the $300 million will come down over time, not go up, for a whole bunch of different reasons, which I won’t go through right now. And then the other corporate, that has net allocations, [voly, coly], taxes, all these lumpy items, and we’re just trying to tell you, it should be, on average, 100, plus or minus a couple hundred, because of the lumpiness of those items. Like corporate taxes, you know, are lumpy, for a whole bunch of different reasons. And so our numbers would be 100 on average. And we always explain the difference if there’s ever a big difference there.

So if I add the two together, and obviously we know there’s lumpiness, but just adding those two numbers together at face value, we’re talking about a quarterly loss of a couple hundred million. You used to guide to quarterly earnings of I think it was $100-200 million on that kind of combined line. So if I was trying to assess what the swing had been relative to a few years ago, how much of it would you say is just the compression of net interest margins, and how much of it is moving away from some of the exotic investment strategies that CIO used to…

It’s got not a damn thing to do with exotic investment strategies. Zero, nada, nothing. Okay? The bulk of those assets always invested conservatively, AA-plus. You know, we have to do it around the world, so deposits around the world, etc. Nothing to do with that. It’s all got to do with some of the NIM compression that shows up there, because obviously investment portfolio yield has gone from a little over 2%. It was, you know, 4% three years ago. And how we allocate capital and things like that. The changes you’ve seen, some of them are the differences due to regulatory changes of B3, RWA, stuff like that. So we’ll try to make this a little bit clearer going forward, but on average, that number will come down, not go up over time.

And then final question I have is just on the firmwide, right below that. You talked about capital allocations a moment ago. It sounds like your LOB return on equity targets are, like you say here, going to come down for some units, and therefore overall. But the corporate guidance is the same. So does that mean that basically all this change is just because you’re allocating more capital out to the business units, and you’ll have less at the corporate parent? That’s the only real change?

Yes. So we allocate the new Basel III operational capital, all that. The capital allocations will go up, mostly to the CIB, by I’m going to say 20% or so, and to the commercial bank by 20% or so, or maybe a little bit more than that. And now, obviously, change the return targets of those units. All to be very healthy. It will just come down. The company will be exactly the same. I think if we allocate all that stuff intelligently, we’ll actually probably end up driving better returns over time, as people learn how to manage a little bit differently. So, again, eventually it will show more. We’ll be allocating out, think of it as everything at one point, LCR, [G Sif V]. Basel III, Basel II, whatever comes down the pike, we allocate out, so our managers can manage through it. And the other thing we haven’t decided permanently is how you look at each business. Because my thought has been, but it’s open for debate, that the business should be capitalized the way its competitors are going to be capitalized, so they’re free to compete in that category. I think the people lump their capital ratios around their competitors. I think it would be very hard, for someone, for example, to run with 7.5% capital and all their competitors are at 10%, or vice versa.

So you’re going to move both capital and cost allocations more to each unit being on a standalone basis, is that right?

No, cost is cost. It’s nothing to do with that. I’m talking about capital, saying we may capitalize the commercial bank at 8.5% and the investment bank at 10%. It may not be 9.5% for everybody, because they have to compete in different environments. So we haven’t figured out exactly how to do that yet.

And we have no further questions at this time.

Folks, thank you for spending time with us. Marianne, great job. We’ll talk to you all soon. Thank you.