Bove: US is trying to break up JPMorgan
The U.S. government is seeking to break up banking giant JPMorgan Chase, banking analyst Dick Bove suggested on Tuesday, pointing to a number of federal probes into the financial institution.
But Bove's not yet ready to lift his 'buy' recommendation on the stock. He just doesn't think it's going to go anywhere in the near-term, and even called it "dead money."
"I don't think there's any questions about this because the actions of the government will definitely harm this company," Bove said. "If the United States government is intent on breaking up this company and if the United States government is intent on every week leaking something to some paper somewhere, which is negative about this company, it's going to be very difficult for this stock to do well in the short-term."
A week after U.S. prosecutors brought criminal charges against two former JPMorgan employees involved in the "London Whale" trading scandal—which cost the bank $6.2 billion last year—there is now a federal bribery investigation into whether the firm hired the children of key Chinese officials to help it win business.
(Read more: Hiring under scrutiny)
There is also a federal probe into its energy business.
"There is no doubt about it. I think that it is the policy of the United States ... that the 'too big to fail' situation is not tenable and that we've gotta get rid of it in this country," said Bove, vice president of equity research at Rafferty Capital Markets.
He added that from Basel III to changes in the liquidity ratio, a number of new policy changes are focused on a single task: "break up the banks."