JPMorgan's earnings tomorrow

.04 cents?

Boy will that be a tough hurdle to clear! Finally expectations are so low, that JPM can come up with a upside surprise.

Last week, JPM was in the news because they were talking tough with Treasury regarding the valuation of their TARP warrants.

Now they are talking tough on Treasury regarding derivatives; JPM's largest profit center:

J.P. Morgan Chase & Co., freed from the government's strictures after repaying $25 billion in federal money, is back to playing hardball. The bank's tougher stands include stepping up its opposition to the government's proposed legislation on derivatives and telling the Treasury Department it is fed up with haggling over the value of warrants that the government holds in J.P. Morgan. The bank also is talking tough with clients and taking market share and top performers from competitors.

Why wouldn't JPM talk tough. After all, they only have $81 trillion of derivatives on their balance sheet:

The bank's derivatives contracts were valued at roughly $81 trillion at the end of the first quarter, representing 40% of the derivatives held by banks, according to the Office of the Comptroller of the Currency. The bank has played down its potential exposure from the contracts, saying that notional value isn't equivalent to the amount of risk facing the bank.

So JPM needs to surprise the street, and prove that they are healthy, so Treasury keeps the looking glass out of their *ss.

And they've already leaked to the WSJ, that they are getting their "swagger" back.

My 2 cents, on JPM's 4 cents of expectations.