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Fitch Downgrades JPM To A+, Watch Negative

Tyler Durden's picture


Update: now S&P is also one month behind Egan Jones: JPMorgan Chase & Co. Outlook to Negative From Stable by S&P. Only NRSRO in pristinely good standing is Moodys, and then the $2.1 billion margin call will be complete.

So it begins, even as it explains why the Dimon announcement was on Thursday - why to give the rating agencies the benefit of the Friday 5 o'clock bomb of course:

  • JPMorgan Cut by Fitch to A+/F1; L-T IDR on Watch Negative

What was the one notch collateral call again? And when is the Morgan Stanley 3 notch cut coming? Ah yes:

So... another $2.1 billion just got Corzined? Little by little, these are adding up.

Oh and guess who it was that downgraded JPM exactly a month ago. Who else but SEC public enemy number one: Egan-Jones:

Synopsis: Reliance on prop trading and inv bkg income remain. LLR declines (down $1.7B QoQ and $3.87B YoY) offset DVA losses in the investment bank. Wholesale loans were up 23% YoY and 2% QoQ. Middle Mkt, Cmml Term, Corp Client and Cmml Real Estate lending increased by 9%, 2%, 16% and 19% YoY. Middle Mkt and Corp lending was up 2% and 3% QoQ respectively, while Cmml Term, and Cmml Real Estate lending were down 2%, and 9% respectively. Card and consumer loans were down 2% and 5% YoY respectively (down 5% and 1% QoQ respectively). Non accruals are up 14% QoQ due to weakness in JPM's student loan portfolio. Reserve coverage is good and capital is adequate. We believe JPM will experience further weakness in its retail portfolio due to a softening economy. We are downgrading.

Full Fitch "analysis":

Fitch Ratings-New York-11 May 2012: Fitch Ratings has downgraded JPMorgan Chase & Co.'s (JPM) Long-term Issuer Default Rating (IDR) to 'A+' from 'AA-' and its Short-term IDR to 'F1' from 'F1+'. Fitch has placed all parent and subsidiary long-term ratings on Rating Watch Negative.
Fitch has also downgraded JPM's viability rating (VR) to 'a+' from 'aa-' and placed it on Rating Watch Negative. In addition, Fitch affirmed JPM's '1'
support rating and 'A' support rating floor. A full list of rating actions follows at the end of this release.
The rating actions follow JPM's disclosure yesterday of a $2 billion trading loss on its synthetic credit positions in its Chief Investment Office (CIO). The positions were intended to hedge JPM's overall credit exposure, particularly during periods of credit stress.
Fitch views the size of loss as manageable. That said, the magnitude of the loss and ongoing nature of these positions implies a lack of liquidity. It also raises questions regarding JPM's risk appetite, risk management framework, practices and oversight; all key credit factors. Fitch believes the potential reputational risk and risk governance issues raised at JPM are no longer consistent with an 'AA-' rating.
Still, at the 'A+' level JPM's ratings continue to reflect its dominant domestic franchise as well as its solid and growing international franchise in investment banking and commercial banking. Capital remains sound and compares well with global peers, providing the bank with sufficient cushion to absorb a material idiosyncratic loss event. Fitch believes JPM continues to be well prepared to meet the minimum standards under Basel III.
Like other global trading and universal banks (GTUBs), the complexity of JPM's operations makes it difficult to fully assess the risk exposure. This trading loss is precisely the kind of risk factor inherent in the GTUB business model.
Fitch believes JPM, like other GTUBs, is in a highly confidence sensitive business and the longer-term implications for the firm's reputation are not yet known. As a result, Fitch believes JPM's ratings remain at heightened risk for downgrade until the firm's risk governance practices, appetite, oversight and reputational impact can be further reviewed.
In addition, ongoing volatility and further losses are likely to arise from these positions as the firm unwinds them, creating some uncertainty. The firm's Value at Risk (VaR) methodology was also changed in first-quarter 2012 (1Q'12) but subsequently reverted back to the original methodology. This resulted in a near doubling of VaR to $170 million, from 4Q'11 VaR of $88 million. The variance emanated from the CIO VaR and a negative $47 million diversification benefit. Fitch believes this also highlights some problems with modeling related to this portfolio.
Resolution of the Rating Watch Negative will conclude upon a further review of how JPM has addressed what Fitch views to be risk management and oversight deficiencies that allowed such a loss to occur. Fitch will also attempt to assess the future earnings and capital impact from these exposures. Fitch will also review the potential implications for market confidence in JPMand reputational damage as a result of this loss on both its liquidity profile and counterparty and dealings.
Fitch believes the Rating Watch resolution could result in a further downgrade of one notch if the risks are not appropriately sized and addressed. The complexity and opacity of these positions may also result in lingering concerns around the firm.
A return to a Stable Outlook will be dependent upon Fitch's ability to gain comfort with the risk management concerns, potential ongoing nature of these synthetic credit positions and volatility they may create, as well as the reputation issues raised.
Fitch has placed all of the ratings below (with the exception of the short-term and commercial paper ratings) on Rating Watch Negative.


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Fri, 05/11/2012 - 16:31 | 2418565 salvadordaly
salvadordaly's picture

Someone break this down for me, exactly what will be JPM's future?

Fri, 05/11/2012 - 16:35 | 2418579 tocointhephrase
tocointhephrase's picture

Who cares, buy silver!

Fri, 05/11/2012 - 16:44 | 2418628 battle axe
battle axe's picture

JPM is now in the process of being squeezed by the people on the other side of this monster trade, and the blood will flow even if JPM begs to be let out. Just wait, the 2bil number is just the beginning. 

Fri, 05/11/2012 - 16:59 | 2418668 AL_SWEARENGEN

This squeeze is a prelude to THE short squeeze which is coming with regards from Silver holders.  On that fateful day Silver will be a stake through the heart of the JPM monopoly that will finally end the beast. 

Fri, 05/11/2012 - 17:01 | 2418687 flacon
flacon's picture

Hey Dimon, guess what? FUCK YOU!

Fri, 05/11/2012 - 17:04 | 2418696 flacon
flacon's picture

Who is the dickhead who bought 2.7M shares of JPM @ 4:00pm for 36.95? Fuck if I know. Probably his name ends with "imon" and begins with "D".

Fri, 05/11/2012 - 17:19 | 2418722 Careless Whisper
Careless Whisper's picture

All you JPMorganChase haters are going to have to pop the champagne another time. Whether its $2 Billion or $20 Billion, it. don't. matter. Let's face it, Chase controls the private cartel Federal Reserve. The Fed creates TRILLIONS of dollars a year out of nothing. Do you really think they can't slosh a few Billion over to Chase? This is just a temporary embarassement. They don't give a fuk.

Fri, 05/11/2012 - 17:29 | 2418749 flacon
flacon's picture

The Fed creates TRILLIONS of dollars a year out of nothing.


ONE DOLLAR is 24.057 grams of silver. 


So either the Fed is able to create silver out of nothing, or those are not DOLLARS. 


Never the twain shall meet. 


Fri, 05/11/2012 - 17:31 | 2418757 NewThor
NewThor's picture

Warren Buffet says "American banks are in great shape!"

Fri, 05/11/2012 - 19:21 | 2418765 The Big Ching-aso
The Big Ching-aso's picture



JPM.  A special bank run by special people screwing up in special ways.

Fri, 05/11/2012 - 19:04 | 2418949 sgt_doom
sgt_doom's picture

Funny, I could have sworn Paul Krugman said the exact same thing recently while giving a talk at the Economic Policy Institute (EPI).

Is Paul Krugman really a hand puppet for Warren?

Fri, 05/11/2012 - 17:50 | 2418803 Magnix
Magnix's picture

??? Its current around $28.84

Fri, 05/11/2012 - 18:48 | 2418911 flacon
flacon's picture

A ONE OUNCE American Silver Eagle, although it says "ONE DOLLAR" is in fact more than a Constitutional US Dollar. 


A Constitutional US Dollar is less than one ounce. :)

Fri, 05/11/2012 - 21:16 | 2419113 mt paul
mt paul's picture

Federal Reserve Notes...

haven't been dollars

for a long time now..

Sat, 05/12/2012 - 01:15 | 2419460 tocointhephrase
tocointhephrase's picture

I understand that they are cents these days

Fri, 05/11/2012 - 17:31 | 2418751 NewThor
NewThor's picture

I'm going to take a price is right stab at the number and say $200 billion.

This doesn't feel like a fart that will be soon forgotten.

The Federal Reserve isn't God.

It must deal with the law of diminishing returns.

Fri, 05/11/2012 - 19:14 | 2418964 sgt_doom
sgt_doom's picture

Now, Careless Whisper makes come lucid and cogent comments.

After all, the purpose of bailing out AIG was to ship those billions to JPMorgan Chase, Goldman Sachs and Morgan Stanley to be sure their swaps positions were met and continued ---- otherwise JPMC would have gone phhhhfffft!

Since JPMC is historically Morgan/Rockefeller, and since Rockefeller family is worth considerably more than that so-called $2 billion (Forbes goes by public sources when they post their richest list, the majority of the ultra-rich can only be ascertained through private sources, i.e., endless holding companies, shell companies --- registered through an endless network of foundations, trusts, offshore trusts and offshore finance centers, etc., etc.), has to be in the three-figure billions, at least; ditto Morgan, etc.

Hate to be repetitive, but:

The Forbidden Question:  Who Owns What?

Steve Coll (New America Foundation, funded by the Peterson Foundation), author of the latest book on ExxonMobil, Private Empire:  ExxonMobil and American Power, has been on the book tour, appearing on show after show, where repeatedly one question is never asked:

             Who   owns   ExxonMobil?

Why is the most obvious question never – ever – asked?

Why won’t Amy Goodman, of Democracy Now!, and the various NPR show hosts ever ask this question?

Yes, ExxonMobil is a publicly traded corporation, but who or what owns the most stock in that corporation?  Why is this always a mystery?  Why should this be a mystery?

True, today with an endless number of holding companies and shell companies registered at offshore finance centers to obfuscate ownership – to make all things murky – it is difficult to ascertain, but knowing who owns stuff can be truly enlightening.

What if the same individuals or families own the controlling block of shares of both BP and Transocean?

Who knows the answer to this question --- and why is it never asked?
When certain corporations and banks are mentioned, certain family names come to mind:  ExxonMobil (Rockefeller and Mellon), BP (Rockefeller and Rothschild), AT&T (Morgan and Rockefeller), GE (Morgan), JP Morgan Chase (Morgan and Rockefeller),  Citigroup (Rockefeller), Morgan Stanley (Morgan), Royal Dutch/Shell (Rothschild), Rio Tinto (Rothschild), Northrop Grumman (the Bush family and James Baker), and Transocean (Rothschild).

Quite probably this is still the case?

When Louis Brandeis wrote the epochal book at the beginning of the 20th century, Other People’s Money and How the Bankers Use It, he exposed the true ownership and super-concentration of wealth; an exposé eventually leading to the New Deal.

It’s the 21st century:  do you know who your owners are?

Sat, 05/12/2012 - 08:18 | 2419623 Problem Is
Problem Is's picture

+1... You need to do a guest post...

a la CD... your style is more coherent with less dissonance...

Fri, 05/11/2012 - 17:25 | 2418738 AlaricBalth
AlaricBalth's picture

BUY? I thought I hit sell short.
Damn that Scottrade IPhone app.

Fri, 05/11/2012 - 17:37 | 2418767 NewThor
NewThor's picture

"Wow. Those European bonds look like a great investment!" - MFGlobal Trader

"Wow. Those European Mortgage Backed Securities look like a great investment!" - JPMorgan Chase Trader

"Enjoy your fate." - Me

Fri, 05/11/2012 - 17:31 | 2418758 FlyoverCountryS...
FlyoverCountrySchmuck's picture

RESERVE, U.S. Federal

Fri, 05/11/2012 - 17:14 | 2418709 semperfi
semperfi's picture


Sat, 05/12/2012 - 02:06 | 2419492 DeadFred
DeadFred's picture

Learn about short silver derivatives before you make this assumption. I don't fully understand them but JPM benefits enormously if silver goes through the roof. I've heard a couple people I trust say these derivatives that are part of the loans that JPM gives to silver mining companies (they are the primary lender for miners) and if silver goes high enough JPM will own the mining companies. Any additional information on this would be appreciated.

Fri, 05/11/2012 - 16:57 | 2418676 5880
5880's picture

Triple Minus Fart

thanks 30 rock!

Sun, 05/13/2012 - 04:37 | 2420795 bigun
bigun's picture

head trader: hey dimon we lost 2b over here

dimon: >:O

head trader: but thanks to the bernake, our cost of capital is zero

dimon: genius

head trader: so we still bros right?

dimon: <3 bros forever

Fri, 05/11/2012 - 16:47 | 2418637 chunga
chunga's picture

Use a Chase credit card and never pay it back.

Fri, 05/11/2012 - 16:57 | 2418657 Poetic injustice
Poetic injustice's picture

Use Chase credit card to bet against Chase, Enjoy and profit :)


Don't forget to wear trollface while taking out card.

Fri, 05/11/2012 - 16:59 | 2418683 infinity8
infinity8's picture

Chase me for it, Fuckers!

Fri, 05/11/2012 - 17:02 | 2418690 chunga
chunga's picture

In lieu of first payment send a registered dispute letter.

Fri, 05/11/2012 - 17:43 | 2418778 ceedub
ceedub's picture

I'm about $8,200 ahead of you.


Fri, 05/11/2012 - 21:49 | 2419120 chunga
chunga's picture

I am tempted to do a case study.

Mailbox is stuffed with credit card applications. Fill them out and leave the application blank and explain my income is zero, and should they issue credit I consider it a courtesy because of their TBTF bailout status and won't ever be responsible for paying anything back.

If it's approved; max it out and then sue them for unfair debt collection on any negative credit reporting at 1k a pop.

I'll assume it's just another toxic financial bomb that will be pedaled on Wall Street that's "worth" even more if I don't pay.

File the unfair debt collection and use the federal court clerk as a notary so they must respond to them. If they don't respond in ~30 days you win by default.

Fri, 05/11/2012 - 23:53 | 2419380 infinity8
infinity8's picture

spoken like a pro.

Sat, 05/12/2012 - 08:31 | 2419628 chunga
chunga's picture


To be a *real* pro you have to do this type of thing on an industrial scale a million times a minute with HFT bots.

Otherwise it would be a moral hazard.

Fri, 05/11/2012 - 22:30 | 2419254 MayerRothschild
MayerRothschild's picture

Use it to buy silver

Fri, 05/11/2012 - 16:34 | 2418580 THX 1178
THX 1178's picture

Why does this sort of stuff always happen after-hours on a friday? It can't be coincidence can it?

Fri, 05/11/2012 - 16:43 | 2418618 Catch-22
Catch-22's picture

I wrote at 12:56

...more today after the close and a solution (read; spin) by Sunday open...’t-know-plain-scary#comment-2417839

it's always like that...

Fri, 05/11/2012 - 16:48 | 2418641 Conman
Conman's picture

Hmm now what could the solution to this be? TARP 2?

Fri, 05/11/2012 - 16:58 | 2418678 Catch-22
Catch-22's picture

Tarp is too obvious… they might go with CANVAS









Fri, 05/11/2012 - 17:01 | 2418688 walküre
walküre's picture


Fri, 05/11/2012 - 17:11 | 2418706 HoofHearted
HoofHearted's picture

$2 a share for JPM late Sunday evening. (I'd love it being as short those motherfuckers as I am.)

Fri, 05/11/2012 - 17:21 | 2418731 I Am The Unknow...
I Am The Unknown Comic's picture

I think we should stop referring to it as another bailout and instead call it another FAILout

Fri, 05/11/2012 - 16:44 | 2418624 Coast Watcher
Coast Watcher's picture

Of course it isn't. For one, it gives the markets a whole weekend to digest and then dismiss it. By Monday morning, this is old news. For two, in politics it's caled "Friday night trash." Saturday is the lowest news readership/viewership day of the week, so it has the least impact on public perceptions.

Fri, 05/11/2012 - 16:36 | 2418582 slaughterer
slaughterer's picture

JPM's future?  They will either become a subsidiary of Goldman Sachs or be re-located to Ireland or Greece for purposes of national security.  

Fri, 05/11/2012 - 16:55 | 2418669 cossack55
cossack55's picture

Rumor has it the JPM officers and board applied for Iceland citizenship and were told "go to hell vampire-squid Bitchezzz" (in Icelandic "toaazeer btraaaee mntryziii wwineimopzz-ti Bitchezzzz")

Fri, 05/11/2012 - 16:58 | 2418679 Sweet Chicken
Sweet Chicken's picture

+1 silver!

I love it!

Fri, 05/11/2012 - 16:37 | 2418584 battle axe
battle axe's picture

Perhaps Fitch knows that the 2bil reported is just the beginning of the loss on this monster trade. I think I hear a landslide.

Fri, 05/11/2012 - 16:41 | 2418610 Cdad
Cdad's picture


Fri, 05/11/2012 - 16:42 | 2418613 AlaricBalth
AlaricBalth's picture

Think about it. That $2 billion loss is no longer an asset that can be re-hypothecated to infinity in London. What is the possible exposure?

Fri, 05/11/2012 - 16:46 | 2418630 data_monkey
data_monkey's picture

All of this does not matter. It is simply a ploy to unleash QE3 before the EU implodes.

Once again, in the quiet words of Jamie Dimon, "[The trading loss] plays right into the hands of a whole bunch of pundits...."

So did Dimon time the announcement for Thursday cause he knew the downgrades would come on Friday?

Fri, 05/11/2012 - 16:45 | 2418633 vast-dom
vast-dom's picture

7b min loss more at 12b

Fri, 05/11/2012 - 17:18 | 2418721 Rainman
Rainman's picture

no matter how much fiat JPM loses, they will lose a downhill foot race with the FHA......3 million new borrowers quickly underwater....and counting. Taxpayers grab your ankles.

Fri, 05/11/2012 - 16:59 | 2418677 tekhneek
tekhneek's picture

Bingo. And remember kids, MF Global taught us the multiply all bullshit by 3.

$2 billion...? Let's try $6 billion for starters and who knows where it will be EOD Monday.

+$1.3 billion tyler pointed out... and now what, $1.2 billion from the downgrade?

$8.5 billion?

Proper "fucked"

Fri, 05/11/2012 - 17:24 | 2418737 Tijuana Donkey Show
Tijuana Donkey Show's picture

So, the big question is if/when they go under, and they found the missing MF Global customer account money at JP Morgan, will the MF Global customers get double dicked, or are the funds protected? 

Sat, 05/12/2012 - 03:23 | 2419533 Arkadaba
Arkadaba's picture

For Dimon to do a mea culpa ... I dated guys like him (in my misguided youth). No way he would admit this unless the losses will be horrific (he knows he is going to lose his job) and/or there is a personal bailout in place.

Fri, 05/11/2012 - 16:36 | 2418587 myshadow
myshadow's picture

those armenian twin sharks on 'fast money' called it a 'rounding error'.

Fri, 05/11/2012 - 16:36 | 2418589 AlaricBalth
AlaricBalth's picture

Bleak. With a possibility of a new CEO soon.

Fri, 05/11/2012 - 16:38 | 2418592 InconvenientCou...
InconvenientCounterParty's picture

1. suck in short sellers

2. Call the fed chairman and explain the opportunity

3. Fed announces creation of new credit facility for no one in particular.

4. mother of all short covering rallies.

5. Hilarity ensues

Fri, 05/11/2012 - 16:53 | 2418655 ForWhomTheTollBuilds
ForWhomTheTollBuilds's picture

"Fed announces creation of new credit facility for no one in particular."


They may lose in the long run, but TPTB have been and will continue to laugh their asses off at those of us who can see through them but are powerless to convince even a single one of our neighbors.

Fri, 05/11/2012 - 17:14 | 2418714 Joe The Plumber
Joe The Plumber's picture

If you buy FAZ or short jpmchse directly be nimble

Fri, 05/11/2012 - 17:15 | 2418712 slaughterer
slaughterer's picture

There are 3 ways to make a living in this business:

Be First

Be Smarter


Guess Jamie Dimon did not know how to do any of these things.  

Fri, 05/11/2012 - 17:24 | 2418726 vast-dom
vast-dom's picture

ALERT: Prof Krugman is advocating war:


His logic is beyond logic, his inferences transcend economics and physics, tho not quantum. He solved nothing in that opinion piece, but he sure did sound uh knowledgable more at opinionated.


War->U.S. nonfarm employment up 20% -> Krugman the fucktard laureate!

Fri, 05/11/2012 - 17:26 | 2418741 Tijuana Donkey Show
Tijuana Donkey Show's picture

Wait, what about the current wars? (That's plural) We're at war with drugs, illegal immigrants, terrorism, single mothers, Iraq, Afganistan, and ourselves, so tt should be 0% unemployment then, right Mr Krugman? Maybe I'm missing something since I don't have a Nobel prize.

Fri, 05/11/2012 - 17:32 | 2418755 vast-dom
vast-dom's picture

actually by your estimation it would be negative unemployment. But I guess only interest rates can go negative in today's neo-quantum markets.


“But this long run,” he wrote, “is a misleading guide to current affairs. In the long run we are all dead." JM Keynes ----> "On a long enough timeline the survival rate......" Hmmmm........... Maybe Krugman does deserve that Nobel? Fucktard.

Fri, 05/11/2012 - 18:05 | 2418836 Vince Clortho
Vince Clortho's picture

lol  +1

Fake war on drugs since tptb are the biggest drug dealers on the planet

they are also actively promoting immigration to bring cheap labor into the U.S.

"War on Terrorism" is a another scam to facilitate acceptance of the trashing of Bill of Rights and conditioning the muppets to get ready for martial law.

Iraq and Afghanistan "wars" are staging areas for rapid deployment to secure Oil

and I'm not sure what to say about single mothers.

Fri, 05/11/2012 - 18:51 | 2418924 Tijuana Donkey Show
Tijuana Donkey Show's picture

Sorry, war on non-prescription drugs. The new front is single mothers who use non-prescription drugs.

Fri, 05/11/2012 - 19:12 | 2418961 Cathartes Aura
Cathartes Aura's picture

"single mothers" are used to stoke fear 'n' loathing from single fathers - knowns & unknowns.

the "I don't want my tax dollars to be spent on_______" meme is older than all of us, and while some "single mothers" do benefit from working the system, their payouts pale in significance when compared to just about anyone else - BUT

they make a fabulous target for bitter(s).  divide & rule, rinse, repeat.

Fri, 05/11/2012 - 19:34 | 2418985 Global Hunter
Global Hunter's picture

so single mothers abusing the system cost less and are less of a burdon on society than say banksters like Jamie Dimon for example? (sarc)

Fri, 05/11/2012 - 22:38 | 2419278 Cathartes Aura
Cathartes Aura's picture

put all the "earnings" of the all the single mothers on one side of this balance scale, and weight the other side with all the looted earnings of society on the other, that which is skimmed off the "top" by the banking class. . .

single mothers on "benefits" are a drop in the ocean by comparison - but they ARE visible in the community, and in that respect, the part they play as hate deflectors is priceless. . .

Throughout the year and on the Day of Atonement, the record of all the sins of the Israelites was transferred to the Tabernacle by the blood of the sacrifices. On the Day of Atonement, the tabernacle was cleansed of all the accumulated sins by the ritual described in Leviticus 16. At that time the high priest confesses the accumulated sins of the Children of Israel to the scapegoat which is then sent into the desert wilderness. The Tabernacle and the Children of Israel were thus cleansed of sin.[


Sat, 05/12/2012 - 02:49 | 2419513 AustriAnnie
AustriAnnie's picture

the single mothers are used to rally support for programs which pay administrators huge salaries, pay banks transaction fees for processing food stamps, welfare, HUD, free childcare, free healthcare, etc, and which justify the existence of politicians, because if single mothers weren't kept down, and weren't a growing demographic, the world wouldn't need lobbyists and Congress to save them.

The single mothers are just taking what's offered.  I'm not saying its right, I'm just saying, they were socially engineered to exist so that TPTB can extract a little more wealth from the taxpayers.

That being said, every single mother and other on-the-dole recipient of taxpayer money helped make this situation what it is.  The bankers might be getting away with murder, but that is because of all the individuals who accepted the banksters' system, only because they got a little piece of the pie.  And not just the recipients, but the voters who allow it to happen. 

Sat, 05/12/2012 - 13:14 | 2419906 Cathartes Aura
Cathartes Aura's picture

couldn't agree with you more AA, for every "single mother" there are at least three jobsworths created to "administer" the benefits - THIS is where the system feeds at the lower levels, in creating ever more programs to sign up the masses for.

The single mothers are just taking what's offered.  I'm not saying its right, I'm just saying, they were socially engineered to exist so that TPTB can extract a little more wealth from the taxpayers.

and there could not ever be "single mothers" if the socially engineered absent fathers didn't exist - all the pieces of the puzzle fit when you pay attention to the details. . .

Sat, 05/12/2012 - 00:28 | 2419418 JeffB
JeffB's picture

Thanks for the link.

"All of this strongly suggests that we’re suffering not from the teething pains of some kind of structural transition that must gradually run its course but rather from an overall lack of sufficient demand — the kind of lack that could and should be cured quickly with government programs designed to boost spending."

He just doesn't get it. The bust is caused by the government crack induced boom. The cure for the lethargic crack addict trying to recover from a binge isn't to give him more crack, even though that might temporarily ease some of the symptoms.

More government stimulus, and the borrowing and printing necessary to bring it about, will only make things worse.

Economists worked this stuff out more than half a century ago, why doesn't he get it?

He even admitted that neither he nor his mainstream economist friends had a clue what caused the current crisis, but that apparently didn't humble him enough to take seriously the analysis of those who were jumping up and down warning exactly what was going to happen for a couple of years before their predictions came true to a "T".

How Did Economists Get It So Wrong? - Paul Krugman

It makes me wonder whether he's a puppet on a string, or just extremely dumb for a smart guy.


Fri, 05/11/2012 - 17:27 | 2418744 scatterbrains
scatterbrains's picture

It might look something like this....

Fri, 05/11/2012 - 16:32 | 2418567 RmcAZ
RmcAZ's picture

Screw Fitch, those financial terrorists.

Fri, 05/11/2012 - 16:33 | 2418573 Eclipse89
Eclipse89's picture


Fri, 05/11/2012 - 16:33 | 2418574 AlaricBalth
AlaricBalth's picture

Hey JPM. How are those linear economic models working out for you?

Fri, 05/11/2012 - 17:17 | 2418719 Joe The Plumber
Joe The Plumber's picture

Thats what they want you to think that they were just stupid. They dont want u to realize they were stupid AND intentionally violating the new bank regs

Fri, 05/11/2012 - 16:34 | 2418575 Piranhanoia
Piranhanoia's picture

911 call;  "This is Jamie Dimon of chase",   "Yes Sir, and where are you located, your caller ID is not functioning".  "I'm Jaime Dimon of Chase, don't you know where I am";  "No sir, if your caller ID is not working we have no way to send a rescue vehicle,  Can you please tell me the nature of your emergency?"   "I've been cut"     "Yes sir, is the bleeding extreme or are you able to stop it?"  "No I can't stop it"


Fri, 05/11/2012 - 16:42 | 2418619 lolmao500
lolmao500's picture

Well too bad. Enjoy hell.

Fri, 05/11/2012 - 16:33 | 2418576 GtownSLV
GtownSLV's picture

Big hit for a single notch - good by High\Prime, hello medium next stop, junk. 

Fri, 05/11/2012 - 16:33 | 2418577 BigMike
BigMike's picture

These bitches got fooled by randomness

Fri, 05/11/2012 - 16:36 | 2418585 El Oregonian
El Oregonian's picture

... And then the sun sets on the effing squid after it is consumed by yet another shark...

Fri, 05/11/2012 - 16:36 | 2418588 Boilermaker
Boilermaker's picture

Totally forgotten by Monday 9:30 EST. 

Sad, but true.

Fri, 05/11/2012 - 16:47 | 2418638 tocointhephrase
tocointhephrase's picture

Monday is going to be a whale of a time!

Fri, 05/11/2012 - 16:39 | 2418600 hugovanderbubble
hugovanderbubble's picture


Morgan Stanley?


Credit Agricole?






















Rating Agencies always laggards,



SELL OFF with merkel losing Rhine Regional Elections

Fri, 05/11/2012 - 16:39 | 2418601 lolmao500
lolmao500's picture

Downgrade these fucks to JUNK!

Fri, 05/11/2012 - 16:42 | 2418608 Pancho Villa
Pancho Villa's picture

Oh and guess who it was that downgraded JPM exactly a month ago. Who else but SEC public enemy number one: Egan-Jones:

What the wise man does in the beginning, the fool does in the end. If Egan-Jones is as clueless as the SEC claims, how come they saw this coming long before Fitch?

Fri, 05/11/2012 - 17:21 | 2418730 12ToothAssassin
12ToothAssassin's picture

Maybe Egan-Jones just has a higher buy off price

Fri, 05/11/2012 - 21:41 | 2419147 Dingleberry
Dingleberry's picture

Doubt it.....they didn't go with the flow the last decade like the other raters, plus getting "investigated" all the sudden by the gov is proof positive they are honest, realtively speaking.

Fri, 05/11/2012 - 16:42 | 2418609 max2205
max2205's picture

SEC knew JPM had this issue and just today announced invest. After they let the boys know on the hill 1st.

Well play sir

Fri, 05/11/2012 - 16:42 | 2418621 jmcadg
jmcadg's picture

If you had money in a JPM account. Would you keep it there?

Bye bye Jamie.

Fri, 05/11/2012 - 16:44 | 2418627 hugovanderbubble
hugovanderbubble's picture

So max...

this is insider trading by JPM and Fitch?:


Fri, 05/11/2012 - 16:47 | 2418640 Rastamon
Rastamon's picture





this weekend EVERY hedgefund in the world is going to formulate a plan to naked short sell this stock into the toilet.....i wouldn't want to be Jamie Dimon.

Fri, 05/11/2012 - 19:45 | 2418996 Cathartes Aura
Cathartes Aura's picture

vultures clean up the spoils, pick clean the bones of the dead. . .

they need the hyena funds to get down to it first.

but circling?            *nods*

Fri, 05/11/2012 - 20:57 | 2419098 lotsoffun
lotsoffun's picture

jamie will be fine.  worry about what it means to your own a..

seriously - anybody seen jon corzine lately?  or stanley o'neal?  or mozilla? or, i can mention dozens of other high paid guys that brought large firms down, left with big bucks and nothing happened.

jamie won't be sleeping in parks with ows guys and proffering a cup anytime soon.


Fri, 05/11/2012 - 16:47 | 2418642 jmcadg
jmcadg's picture

$2 billion is chump change to JPM. This is way bigger for JPM to have to come out like this.

We are talking Primary Dealer Numero Uno, being forced to admit such ineptitude. This could easily have been smoothed over by The Fed ... if it were $2 billion.

This is tip of the iceberg stuff. I smell BS and lots of it. Who said Bear Sterns? That silver bag is cursed.


Fri, 05/11/2012 - 18:53 | 2418928 Tijuana Donkey Show
Tijuana Donkey Show's picture

Do you smell bullshit or Bear Sterns? BS needs to be identified. 

Fri, 05/11/2012 - 23:08 | 2419305 tom a taxpayer
tom a taxpayer's picture

Barbara Steisand. The Streisand effect:

Fri, 05/11/2012 - 21:41 | 2419141 Dingleberry
Dingleberry's picture

The word you seek is "LEVERAGE".....look out below!!!!!!!!!!!!!!

Fri, 05/11/2012 - 16:49 | 2418643 walküre
walküre's picture

JPM down 10% including AH drop. They fought hard to keep it below 10% during the day.

216mm shares traded so far. Who is on the buy side OTHER than the Fed? Blatantly obvious they're trying to contain this.

Fri, 05/11/2012 - 16:53 | 2418661 junkyardjack
junkyardjack's picture

Maybe Buffett wants more bank exposure....

Fri, 05/11/2012 - 16:55 | 2418667 walküre
walküre's picture

No, he is buying gold. Lots of it.

Do as they do, not as they say.

Fri, 05/11/2012 - 20:30 | 2419041 Winston Churchill
Winston Churchill's picture

Evwn Cramer was advising sell JPM/

If all of the last three investors in the 'market"sell......

Fri, 05/11/2012 - 16:49 | 2418647 Oquities
Oquities's picture

watch out!  K-Mart went from A-ish to junk in a coupla months.

Fri, 05/11/2012 - 16:52 | 2418652 midgetrannyporn
midgetrannyporn's picture

A bank holding company could give a f$ck less about ratings. phascist phucks.

Fri, 05/11/2012 - 21:39 | 2419137 Amish Hacker
Amish Hacker's picture

I can see from your avatar that you work at the SEC, so you must already know this, but ratings downgrades often result in demands for additional collateral, especially for heavily leveraged derivative bets like the ones that Jamie Dimon puts on. Of course, if you're JPM, you control the printing press, so no problemo. Put the decimal point wherever you want to. 

At least for now.

Fri, 05/11/2012 - 16:53 | 2418656 junkyardjack
junkyardjack's picture

It would have all been fine if they didn't have to mark to market...

Fri, 05/11/2012 - 17:55 | 2418813 Vince Clortho
Vince Clortho's picture

mark to what?

Fri, 05/11/2012 - 16:53 | 2418659 cougar_w
cougar_w's picture

Let's see ...

It's Friday.

The world is about to blow the fuck up.

And someone mentions Morgan and Stanley


When the angel-witch with the tower-of-power t-shirt gets a whiff of un-truthy-ness, what do you expect her to do? Well of course she destroys the world.

But only for a day. Sit back and have a beer, watch the pretty flames, and remember to BTFD my homiez.

Fri, 05/11/2012 - 20:13 | 2419022 fuu
fuu's picture


Fri, 05/11/2012 - 16:54 | 2418663 walküre
walküre's picture


"Right now it's ugly times ugly .. "

LOL How true! Did the movie makers know it would end this way?


Fri, 05/11/2012 - 17:01 | 2418671 Joe The Plumber
Joe The Plumber's picture

Sell bonds. Even if you just sell one bond out of your portfolio it will help

Dont buy cds

Buy a hundred shares of FAZ

Somebody tell me the exact positions iksil is holding or their best guess. I would like to aim my fire a little more accurately. Apparently i dont have the contacts to find out on my own

Fri, 05/11/2012 - 17:05 | 2418698 Joe The Plumber
Joe The Plumber's picture

Its not collusion its free speech. Besides its obvious no rules are enforced anymore

Fri, 05/11/2012 - 17:10 | 2418704 walküre
walküre's picture

Did JP sell CDs on sovereigns?

Fri, 05/11/2012 - 17:14 | 2418713 RoadKill
RoadKill's picture

Are you serious? You think 100 shares of FAZ will impact JPM? Dude we are misquitoes. FAZ trades $350 million a day.

Fri, 05/11/2012 - 17:21 | 2418732 Joe The Plumber
Joe The Plumber's picture

Every drop in the bucket counts. Even the little fish can have the satisfaction of taking action no matter how small.

I know the odds are low, but if kill the iksil trade went viral thousands of people could contribute what they could

What would happen if everyone shortened their bond maturities? Small changes by huge numbers of people could make a difference.

Fri, 05/11/2012 - 18:03 | 2418832 NidStyles
NidStyles's picture

Ever been bit by a million mosquitoes? Probably not, because the resulting infection and blood loss would kill you.


FAZ moves $350 million a day, how much of that is on margin?

Fri, 05/11/2012 - 17:51 | 2418802 Bohm Squad
Bohm Squad's picture

I bought 3 ozt silver own little way of kicking JPM while they're down.

Fri, 05/11/2012 - 17:00 | 2418684 JackT
JackT's picture

ahhhhh...that's why they rolled on a Thursday.

Fri, 05/11/2012 - 17:00 | 2418686 navy62802
navy62802's picture

Meanwhile everyone else is worried about the Facebook IPO. HAHAHAHAHAH

Fri, 05/11/2012 - 17:03 | 2418695 Jake88
Jake88's picture

How could the brilliant magnificent and beautiful Jamie Dimon fuck up like this.  Perhaps it was hubris.  Maybe he is just stupid.

Fri, 05/11/2012 - 17:10 | 2418705 midgetrannyporn
midgetrannyporn's picture

He gets paid big to be clueless.

Fri, 05/11/2012 - 17:20 | 2418727 catacl1sm
catacl1sm's picture

To be fair (which is more than Jaimie deserves), he could be the victim of the Mum Effect.

Fri, 05/11/2012 - 21:27 | 2419125 Acorn10012
Acorn10012's picture

Or the mung effect. Yesterday was the first time I'd seen a picture of him. Doesn't look like a genius - guessing he tongue-washed ball sack to get to the top. Hope its a long, hard fall.

Fri, 05/11/2012 - 20:48 | 2419084 lotsoffun
lotsoffun's picture

my friend mr. jake88 - hubris is starting to mean whale fat.  he just got greedy.  it's that simple.  and the fed is handing him money at .25% and telling him to go buy treasurys, as much as you want at a higher rate and just sit back and skim.  wasn't good enough.

Fri, 05/11/2012 - 22:09 | 2419189 Umh
Umh's picture

Maybe he was doing as instructed?

Fri, 05/11/2012 - 17:05 | 2418697 I am a Man I am...
I am a Man I am Forty's picture

You want to see a company that is a complete and total fraud?  Check out DOMK.OB.  I emailed FINRA about them, but I'm sure they will do nothing.

Fri, 05/11/2012 - 17:06 | 2418699 Father Lucifer
Father Lucifer's picture

Jamie come home, you are always welcome in HELL!!!!

Fri, 05/11/2012 - 17:09 | 2418700 Ness.
Ness.'s picture

A little Steely Dan (Black Friday) for such a beautiful day.


Enjoy the weekend Mr. Jamie Diamonds.



Fri, 05/11/2012 - 17:39 | 2418768 Joe The Plumber
Joe The Plumber's picture

Hey roadkill down below

Yeah i might get burned but i doubt i lose more than a few thousand

I consider it a lottery ticket. Also I will get a few thousand entertainment value and even if the elephant doesnt feel my pin prick i can always hope a million other people do the same thing. Damn elephant will feel a million pinpricks and one might cause a fatal infection lol

Fri, 05/11/2012 - 17:09 | 2418701 RoadKill
RoadKill's picture

Ohhh God is ZH going to start rumors of an impending JPM bankrupcy?

Didnt you burn enough people with your BOA is going bankrupt pitch.

Their is no question the loss will be bigger then $2 billion, but even at $10 billion its not a big deal. Not big enough to take down a $150 billion mkt cap bank with $185 billion of book value.

Fri, 05/11/2012 - 17:13 | 2418710 walküre
walküre's picture

That market cap is melting and the book value you're referring to.. depends on which book I guess. When the panic sets in and redemption calls are coming in, it doesn't matter what perceived book value the firm has.

You don't know what greed is capable of doing. JP is getting fucked from all sides. There is simply too much money to be made by breaking the buck on JP than just to sit idle.

Fri, 05/11/2012 - 17:20 | 2418724 CryingBear
CryingBear's picture


Fri, 05/11/2012 - 18:08 | 2418843 NidStyles
NidStyles's picture

Spiders do this.

Fri, 05/11/2012 - 19:53 | 2419004 Cathartes Aura
Cathartes Aura's picture


Fri, 05/11/2012 - 17:27 | 2418742 Joe The Plumber
Joe The Plumber's picture

I agree

I am willing to lose a few thousand just for the small chance that i might have the satisfaction of helping take them down

Collapse now, bitchez

Fri, 05/11/2012 - 17:15 | 2418717 CryingBear
CryingBear's picture


Fri, 05/11/2012 - 17:15 | 2418718 Global Hunter
Global Hunter's picture

oh come on for this to happen to JPM is very fitting and intriguing for those followin. As for the trades don't play the game and you won't get burned.

Fri, 05/11/2012 - 17:32 | 2418756 Joe The Plumber
Joe The Plumber's picture

Trying to hurt jpm is just like voting. You lnow ur single vote is worthless but there is always the dream that enough people vote the same way that it makes a difference

Yes trying to hurt jpm with my puny portfolio is tilting at windmills but someday enough people might collectively be able to hurt them by millions of small trades

Fri, 05/11/2012 - 17:40 | 2418763 Global Hunter
Global Hunter's picture

That's fair enough Joe (my original comment was in reply to the post you were replying to not at you) and I commend your efforts, I just follow the markets these days.

Fri, 05/11/2012 - 17:40 | 2418773 Joe The Plumber
Joe The Plumber's picture

Lol i aint betting the farm

Fri, 05/11/2012 - 17:18 | 2418720 i_call_you_my_base
i_call_you_my_base's picture

"$185 billion of book value"


Fri, 05/11/2012 - 17:21 | 2418729 Seer
Seer's picture;range=5y;c...

Maybe you need to learn how to read charts...

Down and to the right, ALL THE WAY!

And realize that this is happening at a time in which the banks are being handed free money!

Sat, 05/12/2012 - 00:46 | 2419436 SAME AS IT EVER WAS

The banks seem bullet proof in that nothing can bring them down. Trillions of dollars just went "poof, aaand its gone". The banks are (so were told?) bigger than ever. JPM loses 10-20 billion, ahh fuck it, so what-this shit does not make sense. JPM was also supposed to be the best of the best of banks as well, (again, so we are led to believe) WTF?

Fri, 05/11/2012 - 18:58 | 2418934 Tyler Durden
Tyler Durden's picture

October 19, 2010: Can You Spell U-N-D-E-R-R-E-S-E-R-V-E-D? If Not, Here Is A Visualization Aid

-> 43%

So the answer to your question is no.

Sat, 05/12/2012 - 03:07 | 2419523 Arkadaba
Arkadaba's picture

<cough> it is 'there' not 'their'

Fri, 05/11/2012 - 17:14 | 2418715 Siegfried
Siegfried's picture

Fantastique! J'aime votre site.

Fri, 05/11/2012 - 17:16 | 2418716 Seer
Seer's picture

"Fitch believes JPM, like other GTUBs, is in a highly confidence sensitive business and the longer-term implications for the firm's reputation are not yet known."

"highly confidence sensitive business"  Another way to put "ass-raping business" I suppose.

The rating agencies are just shooting in the dark, with blanks.  Pretty silly to measure the immeasurable, no?  Yup, as Grant said the other day, this IS The Truman Show.

Fri, 05/11/2012 - 17:17 | 2418723 ebworthen
ebworthen's picture

Where is Jon Corzine?

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