Thursday, May 10, 2012 – JP Morgan Chase Goes Boom

DOW +19 = 12,855SPX + 3 = 1357 NAS – 1 = 2933 10 YR YLD + .05 = 1.88%OIL – .26 = 96.55GOLD + 4.00 = 1594.40SILV -.23 = 29.14PLAT – 13.00 = 1492.00 So, it was a quiet day in the markets, not much going on; the Dow and the S&P managed to eke out modest gains, and this was welcome following 6 days of losses. Back in early April I told you to start getting out of the market, based in part, on the the idea of “Sell in May and stay away”. Sure, enough, May has been ugly, but not every day is ugly. There will be ups and downs. The past six days have been down; today the markets stopped banging their head against a wall, but the headache hasn’t gone away. All in all, an uneventful trading day. And then after the closing bell – boom! JP Morgan Chase lost about $2 billion on mark-to-market accounting tied to synthetic credit securities after positions taken by its chief investment office were riskier than expected. JPMorgan’s chief investment office, or CIO has been transformed in recent years under Chief Executive Officer Jamie Dimon, into a unit that makes bigger and riskier speculative bets with the bank’s money, five former employees of the bank said earlier this year. Some of the bets were so big that the bank probably couldn’t unwind them without losing money or roiling financial markets. Losses in CIO’s synthetic credit portfolio have been …

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Friday, April 13, 2012

DOW – 136 = 12,849SPX – 17 = 1370NAS – 44 = 301110 YR YLD -.05 = 2.00%OIL – .81 = 102.83GOLD – 16.80 – 1659.50SILV – .88 = 31.60PLAT – 20.00 = 1581.00 The S&P 500 is now down 3.4 percent from this year’s closing high, after falling 2.7 percent over the past two weeks. Wells Fargo and JP Morgan reported first quarter results; both beat expectations. JP Morgan came in with EPS of $1.31 on $26.7b in revenues; topping estimates of EPS $1.18 and revenues of $24.6b. Wells Fargo posted EPS of $0.75 on $21.6b in revenues, beating estimates of $0.73 and $20.4b. JP Morgan made a big chunk of earnings by lowering their reserves for loan losses by $2 billion. In the last 2 years, JP Morgan has generated $12.3 billion in non-earning earnings, even as non-performing loans increased by $600 million in the last quarter. Or as CNBS said, they “blew expectations out of the water.” Blowing smoke is more like it. WFC – 3.4% JPM -3.6% BAC -5.3% GS -4.4% C -3.5%. Jamie Dimon, the CEO of JP Morgan said he would fight buyback demands or repurchase claims on mortgage securities that turned sour. Bank of America has already lost a few of these multi-billion dollar battles. JP Morgan is in the same business as Bank of America. Jamie Dimon briefly responded to questions about the Chief Investment Office, or CIO; that’s the proprietary trading division. According to JP Morgan the CIO division uses approximately …

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