Friday, May 11, 2012

JPMorgan discloses $2 billion in trading losses


Jamie Dimon, the chief executive of JPMorgan Chase

Source: Press TV
http://www.presstv.ir/usdetail/240589.html

U.S. banking giant JPMorgan Chase on Thursday revealed that it would incur losses that could run into the billions as a result of bad bets on derivatives.

In a unscheduled conference call, chief executive Jamie Dimon reported the trades cost the company around $2 billion in recent weeks, half of which was clawed back.

It "could cost us as much as one billion dollars," Dimon said, admitting that how markets react in the coming days and weeks could put the final price tag much higher.

"It could get worse."

The losses were linked to JPMorgan's Chief Investment Office, which hedged the firm's assets and liabilities against synthetic credit derivatives.

"These were egregious mistakes," Dimon said. "They were self-inflicted and this is not how we want to run a business."

The losses are a humiliation for Dimon - one of Wall Street's best known titans - and for the bank, coming hot on the heels of the 2008 financial crisis. Raw Story

HIGHLIGHTS

J.P. Morgan is part of JPMorgan Chase & Co. (NYSE: JPM), a global financial services firm with assets of $2.3 trillion. It is a leader in asset management, investment banking, private banking, treasury and securities services, and commercial banking. jpmorgan.com

Shares of JPMorgan, frequently held up as an example of a bank that withstood the bursting of the housing bubble and subsequent crisis better than most, plunged 6.9% to $37.94 in uncommonly high volume trading after hours. Analyst Mike Mayo called the bank "best in class" in a recent note, but still smacked the stock with a two-notch downgrade. Forbes

The firm was also hit by a cut to the ratings of its residential mortgage servicing unit from Standard & Poor's after the bell Thursday. The action is not exactly the rating cuts Wall Street watchers have been waiting for, with Moody's due to wrap up a review of its ratings on firms including Morgan Stanley and Bank of America in the near future. Forbes

The troubles at the unit, the so-called Chief Investment Office, which makes trades to balance the bank's assets and liabilities, are expected to weigh on the bank's broader earnings. dealbook.nytimes.com

For example, the corporate group, which includes the Chief Investment Office, is now expected to lose $800 million in the second quarter, the company said in a filing. Previously, JPMorgan had estimated that the group would report net income of roughly $200 million. dealbook.nytimes.com


No comments:

Post a Comment

Thanks for commenting on this post. Please consider sharing it on Facebook or Twitter for a wider discussion.

Russia Today (Live)

World News 2017

South Front Military Review 2017

Syria - News 2017

US News 2017

The Russian Perspective

Debate – Global Issues 2017

Current Affairs - Important Interviews – 2017

Important Information 2016 - 2017

Yemen News 2017

Turkey News 2017

Ukraine News 2016 - 2017

Palestine & Israeli Crime 2017

Iraq News 2017

Iran News 2016 - 2017

Important Documentaries

Viewpoint, Discussion & Opinion - 2017

Abby Martin – Empire Files

Global Economic News 2017

Egypt News 2016 - 2017

Libya News 2016 - 2017

Bahrain News 2016 - 2017

Sheik Imran Hosein - Islamic Eschatology

George Galloway – Comment & Opinion

English FA Cup 2016 – 2017

New Age Weather

Space News

Music for the Revolutionary Mind

Global Revolution LIVE!

Watch live streaming video from globalrevolution at livestream.com

Japan’s 3 Nuclear Meltdowns STILL ongoing (News Censored)