This initial report is pretty thin on details and the only real reference is to an old settlement that occurred in 2010 wit a mortgage related issue. We can be assured a major press release will be announced soon give us more details on exactly what this is regarding and if any guilt it admitted. My bet in on “no wrong-doing” which is the trend lately in the wake of the largest financial crisis…..ever.
We didn’t get executives on the stand receiving justice, what we can hope for is real regulation and prohibits all this cowboy behavior tied to basic human greed. If not, then it will happen again and maybe that is what it will take to put this situation into the proper perspective. I love capitalism and finance, but it has to be done with the national and global interest in the forefront. We use these tools to bring betterment to everyone as a whole and provides incentives for people to do the “bare maximum”.
Bloomberg - JPMorgan Chase & Co., the biggest U.S. bank, reached a settlement with regulators to resolve claims tied to its home-loan business and said it would buy back as much as $3 billion of shares.
$5 trillion is quite a bit of debt insurance to have exposure on. This could be of concern, both banks should clear up where a majority of this exposure originates before this rumor-mill gets out of control. I would assume that debt insurance is purchased in places where there was enough risk to bring that type of protection into the picture. I would think that the emerging portion of the Eurozone would be of higher risk. Banks need to set this straight soon, they already still haven’t fully disclosed and written down all they liabilities they still have from the U.S. real estate bubble of 2007.
Bloomberg (Christine Harper) – JPMorgan Chase & Co. (JPM) and Goldman Sachs Group Inc. (GS), among the world’s biggest traders of credit derivatives, disclosed to shareholders that they have sold protection on more than $5 trillion of debt globally. Just don’t ask them how much of that was issued by Greece, Italy, Ireland, Portugal and Spain, known as the GIIPS.
Very interesting that JP will not buy-back the paper is purchased as part of the Bear Sterns acquisition. Not surprising though. If I had a bunch of known bad or even worst, fraudulent, I would not want to buy it back either. It would be a instant loss when you write it off. The article mentions there is over $90 billion dollars of the paper running around like the boogeyman. If the official number is $90 billion, I am going to assume at least twice that is actually out there.
JP Morgan is digging in, they have set aside a whooping $1.5 billion dollars in legal fees to use to litigate other financial institutions that are going force the issue and make them purchase the paper back. In closing, a conference call was quoted and I am going to quote it here, “”It’s going to be a long ugly mess”.
Bloomberg - Ambac Assurance Corp., the debt guarantor partly seized last year by Wisconsin’s insurance commissioner, made the claim in a proposed amended complaint in its lawsuit against Bear Stearns’s EMC Mortgage unit, now owned by JPMorgan. Ambac, seeking to add a fraud claim to the case, referenced depositions, e-mail and letters in the filing, which was unsealed Jan. 14 in Manhattan federal court.
Interesting how an accounting change can give so much benefit to a bank that had a bundle of bad loans on its books. I would like to know more about the loan that are in question and if they figure they will become or stay current in the future or if this is using the losses to offset tax liabilities?
I was on the conference call with JP when they announce the Washington Mutual acquisition and what I can tell you is that they were very very happy when announcing the deal. They talked about how low they paid for WaMu’s “good” assets and now matter how they looked at this purchase, it would be very beneficial to JP Morgan Chase in the future and you know what, I believe it.
JPMorgan Chase & Co. stands to reap a $29 billion windfall thanks to an accounting rule that lets the second-biggest U.S. bank transform bad loans it purchased from Washington Mutual Inc. into income.
It was to be expected to see more workforce reduction after this major acquisition purchase. JPMorgan got an excellent deal in the purchase of Washington Mutual. They purchased largest base of retail obanking deposit in the country for a fraction. I have noticed all the marketing is getting slowly changed to the Chase brand.
JPMorgan Chase & Co said it expects to cut 12,000 jobs as it integrates the former Washington Mutual Inc, 2,800 more than its previous estimate. The second-largest U.S. bank also said on Thursday it expects about $2.75 billion of savings from Washington Mutual, offset by $750 million of new investments. Retail banking chief Charlie Scharf said the bank expects to achieve most of the savings by the end of 2009, sooner than originally thought.