Skip to comments.JPM Crashing After It Convenes Emergency Call To Advise Of "Significant Mark-To-Market" Losses
Posted on 05/10/2012 2:47:31 PM PDT by tcrlaf
Out of nowehere, JPM announced 40 minutes ago that it would hold an unscheduled 5pm call to coincide with the release of its 10-Q. Rumors were swirling as to why. The reason is as follows:
JPMORGAN SAYS CIO UNIT HAS SIGNIFICANT MARK-TO-MARKET LOSSES - "Fortress balance sheet" at least until Bruno Iskil gets done with it. JPMORGAN SAYS LOSSES ARE IN SYNTHETIC CREDIT PORTFOLIO - but, but, net is NEVER, EVER Gross. JPM WOULD NEED $971M ADDED COLLATERAL IF RATINGS CUT ONE-NOTCH JPM WOULD NEED $1.7B ADDED COLLATERAL IF RATINGS CUT 2 NOTCHES - how about three notches? JPMORGAN: MAY HOLD SOME SYNTHETIC CREDIT POSITIONS LONG TERM - "Level 3 CDS FTW" "As of March 31, 2012, the value of CIO's total AFS securities portfolio exceeded its cost by approximately $8 billion"
As a reminder, the CIO unit is where Bruno Iksil was making $200 billion-sized bets. Basically JPM has suffered massive losses at its CIO group most likely due to its IG/HY positions held by Iksil.
(Excerpt) Read more at zerohedge.com ...
LORDY, LORDY, PRAISE THE MESSIAH! It's a good thing the Obama economy is so strong, and we won't need QE3! (OOPS)
This will be another AIG type disaster. Our banks will ‘need’ help because European ones owe them. The open market will close up again, because no one trust another for good reason. Enter Uncle Ben to the rescue.
Mark to market....LOL!
Dimon is telegraphing to Bernanke that JPM needs a BILLION DOLLARS more in liquidity (free taxpayer money) if they get down-graded by the ratings agencies because of this.
FIRE UP THE PRINTING PRESSES, here comes QE3!
keep their filthy mitts out of the taxpayer cookie jar!!!!
Details slowly leaking.
Losses of $4.2 Billion “reasonably possible.”
Get ready to pony up, kids! Your future has to save Obama’s election, now!
Let ‘em die....enough is enough.
” Mark to market....LOL! “
Heaven forbid that all of the ‘big banks’ carry these assets on their books at their real (liquid) value...
All that honesty would surely bring the whole ‘too big to fail’ system down....
(By the way - doesn’t the FED hold untold billions of these inflated ‘assets’???)
How is the SP500 futures market doing right now?
I have a feeling that the Obama admin will say, "drop dead, Jamie!" and that means that Tim can parcel it up to his buddies like they did with Bear.
This has GREEK SWAPS written all over it...
And explains the Goldman-Sachs call for MORE QE on Friday.
To answer your other question, it came out Monday that the FED was holding $177 BILLION in “Other assets”.
TRANSALTION: Stocks the FED has been propping for the last 5 months.
keep their filthy obamas out, too.
“I have a feeling that the Obama admin will say, “drop dead, Jamie!””
This is LOSE-LOSE for Obama, no matter which way it goes.
The FED tried has tried to postpone the crash, and to prop things past the election. Doesn’t look like, tonight anyway, that it’s going to work out that way.
“The Era of Bailouts IS OVER!” Barack Obama, 2010
Obama’s STASH, baby! We’re all gonna be RICH! Woo-hoo!!!!/sarcasm;)
down 11.4, dow -91, as you know doubt know by now.
Don't get me started on this.
2 bil is a relatively small amount of money for such a huge operation. Can this be the one time that "big harvests [don't] get bigger?"
Oh, yeah. Isn’t JPM where they found all of MF Global’s “missing” centi-millions?
What’s that about reserve requirements? Oh, you dont have money, you paid out bonuses. Ok, fine. Good for you, but you don’t have money to cover your potential loses?
Like in Goodfellas, "F U, Pay Me!"
What’s funny is all the regs put in place were suppose to end this crisis.
Time for another crisis.
Oh for Crisis sake.
Yes, and this is obviously the real reason the money got stolen.
Foolish peon! Don't you know it's their cookie jar? They just allow us to fill it!
Obama blames this on Bush/Romney/Wall Street in 5...4...3...2...
We need a preemptive Tea Party press release, No Bailouts!
The noise should bring gas prices down a whole dime or so. Tourists, laden with government incomes, will all drive out at once to spend their debt in our “service economy” and elicit more loans from Uncle Jintao. Keep the USD artificially high for our idle political regulator class. Have fun. Enjoy the slide. Don’t mention our lack of manufacturing.
Here is the problem. What is the real value? A mortgage that is current is a contract and the value of the contract is what the home owner agreed to pay, not the underlying value of the asset.
However, if it is show that the contract is not being followed (late payments, etc) then the contract is devalued down to a new level. What is that new level? Mark to market establishes the current value of that contract as the current retail value of that asset.
But the value of a house that just sold in the neighborhood is not likely to be the value of that asset. There is now cost associated with administration of the sale of that asset. The proper way should be to value the asset lower than current market by some amount that represents the cost of selling that asset.
I am of the opinion that valuation should be mark to contract until the home owner falls behind. Then mark to less than market (say 10% less) once there is a late payment of say 60 days or more.
Isn’t the Morgue Bernanke’s designated silver market manipulator?
A CYA memo will not suffice this time! HooRah!
This seems to me like the biggest news all day, all week, bigger than anything on breaking news. Am I wrong, right? The repercussions of this would affect all other stories.
I’m no financial wizard, but I think the brown stuff is about to hit the fan.
conference call shortcut .. http://bit.ly/KTDygZ
Do a LITTLE homework before you post about bailouts and Armageddon.
She was smarter or better-informed than the rest of us. Where did it come from? He borrowed it.
JPM closed with a .25% gain.
Then at 4:02, it was down $2.79 or 6.85%.
JPMorgan Chase & Co. JPM-NYSE 40.74 0.10(0.25%).
4:02PM EDT|After Hours: 37.95 2.79 (6.85%) 6:45PM EDT - Nasdaq Real Time Price.
How may investors not in on the reality bought JPM before it started to head down south?
On Fox right now. Big concerns . Maybe up to 4.2 Billion. JP Morgan was considered the safest bank.
is it brown or baby diaper yellow?
JPM and GS are two banks with friends in very high places. Like how about the treasury and the FED and the SEC, and Congress and on and on. Does anyone think that JPM will not get whatever they need from the US tax payer via the back door. They all have been right along.
Meanwhile the kenyan muslim in chief is giving billions to his muzzy brotherhood and paliscum terrorists.
Soros sold off most of his shares last year. Nothing to see, move along.
One more thing. JPM is the bank that it is rumored to have received much of that missing MF Global customer money in the wee hours before they declared bankruptcy. They should have to pay that back too.