Whoopsie. Things just got wobbly for JP Morgan. Street Insider. Excerpts:
Shares of JPMorgan (NYSE: JPM) are under heavy pressure after-hours Thursday after announcing a surprise conference call and large surprise mark-to-market loss in its chief investment office and exposure to a possible credit downgrade.
Since March 31, 2012, the company said its CIO has had significant mark-to-market losses in its synthetic credit portfolio. JPMorgan said the portfolio has proven to be "riskier, more volatile and less effective as an economic hedge than the Firm previously believed."
The company said it now see a loss of $800 million in its CIO unit, versus an expected profit of up to $200 million. (A one billion dollar swing from projections!) Although CEO Jamie Dimon said it could "easily get worse."
The company said the loss was driven by $2 billion trading loss in its synthetic credit portfolio.
Despite the loss, JPMorgan said at this time it still expects to earn $4 billion in the quarter.
My guess is this is just the first of many surprise calls and losses in store for many, many corporations, finance-related or not. If JP Morgan cannot sustain, the worldwide economic repercussions will be significant and quick. Could JP Morgan be that falling domino that starts the chain reaction crash?
Shares of JPMorgan (NYSE: JPM) are under heavy pressure after-hours Thursday after announcing a surprise conference call and large surprise mark-to-market loss in its chief investment office and exposure to a possible credit downgrade.
Since March 31, 2012, the company said its CIO has had significant mark-to-market losses in its synthetic credit portfolio. JPMorgan said the portfolio has proven to be "riskier, more volatile and less effective as an economic hedge than the Firm previously believed."
The company said it now see a loss of $800 million in its CIO unit, versus an expected profit of up to $200 million. (A one billion dollar swing from projections!) Although CEO Jamie Dimon said it could "easily get worse."
The company said the loss was driven by $2 billion trading loss in its synthetic credit portfolio.
Despite the loss, JPMorgan said at this time it still expects to earn $4 billion in the quarter.
My guess is this is just the first of many surprise calls and losses in store for many, many corporations, finance-related or not. If JP Morgan cannot sustain, the worldwide economic repercussions will be significant and quick. Could JP Morgan be that falling domino that starts the chain reaction crash?
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