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JPM Crashing After It Convenes Emergency Call To Advise Of "Significant Mark-To-Market" Losses In Bruno Iksil/CIO Group
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.
In Corporate, within the Corporate/Private Equity segment, net income (excluding Private Equity results and litigation expense) for the second quarter is currently estimated to be a loss of approximately $800 million. (Prior guidance for Corporate quarterly net income (excluding Private Equity results, litigation expense and nonrecurring significant items) was approximately $200 million.) Actual second quarter results could be substantially different from the current estimate and will depend on market levels and portfolio actions related to investments held by the Chief Investment Office (CIO), as well as other activities in Corporate during the remainder of the quarter.
Since March 31, 2012, CIO has had significant mark-to-market losses in its synthetic credit portfolio, and this portfolio has proven to be riskier, more volatile and less effective as an economic hedge than the Firm previously believed. The losses in CIO's synthetic credit portfolio have been partially offset by realized gains from sales, predominantly of credit-related positions, in CIO's AFS securities portfolio. As of March 31, 2012, the value of CIO's total AFS securities portfolio exceeded its cost by approximately $8 billion. Since then, this portfolio (inclusive of the realized gains in the second quarter to date) has appreciated in value.
The Firm is currently repositioning CIO's synthetic credit portfolio, which it is doing in conjunction with its assessment of the Firm's overall credit exposure. As this repositioning is being effected in a manner designed to maximize economic value, CIO may hold certain of its current synthetic credit positions for the longer term.
Accordingly, net income in Corporate likely will be more volatile in future periods than it has been in the past.
The Firm faces a variety of exposures resulting from repurchase demands and litigation arising out of its various roles as issuer and/or underwriter of mortgage-backed securities (“MBS”) offerings in private-label securitizations. It is possible that these matters will take a number of years to resolve and their ultimate resolution is currently uncertain. Reserves for such matters may need to be increased in the future; however, with the additional litigation reserves taken in the first quarter of 2012, absent any materially adverse developments that could change management’s current views, JPMorgan Chase does not currently anticipate further material additions to its litigation reserves for mortgage-backed securities-related matters over the remainder of the year.
All of this is coming form the just filed 10-Q. The full link is here.
Call dial in: (866) 541-2724 in the U.S. and Canada; (706) 634-7246 for international.
Stock now down 5% after hours dragging down ES 7 points with it.
Some segments from the 10-Q as we peruse it:
- A one-notch downgrade in the Firm’s internal risk ratings for its entire wholesale loan portfolio could imply an increase in the Firm’s modeled loss estimates of approximately $2.0 billion.
and just for some clarity on how this occurred. We know the poisitions that Iksil held were in IG9 (more likely to be tranches) but this $2bn loss comes from a tiny 12bps decompression in the index - which means the DV01 must be huge...(as we already knew given the massive rise in net notional that we warned about)...
This is the Investment Grade credit index series 9 - which is the most active tranche-related index and was the index that Iksil had driven massively rich to its fair-value...
Chart: Bloomberg
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its a buy....
they are getting rid of their losses...who really marks to market anyways?
Maybe they should hire Goldman Sachs to run their chief investment office............................then they too can be a muppet.................
I just had an orgasm.
Stress test bitchez!
link to the conference call
registration required
http://investor.shareholder.com/jpmorganchase/eventdetail.cfm?eventid=11...
I'm surprised nobody has posted a video of Nelson Muntz yet...
this link should work for direct access to the conference
http://bit.ly/KTDygZ (windows media player)
This will trigger a bunch of well-deserved bonuses.
Could'nt have happened to a nicer company!
Do beef & onion crisps compensate for popcorn?
Wow this is spooky... ZH called this one too well, lol!
Get your popcorn ready....this party is just getting started!!!!!
As JPM and the other US TBTFs get smacked, who/what will "save" the European banks tomorrow morning. Smack down gonna be UGLY.
JPM has repeatedly stole money from other companies (too numerous to list), me thinks they have a recurring liquidy problem. Sure smells that way. Who will get corzined next?
The morgue may just be heading to exactly that place!
What are ya'll sweatin' about?
Dimon is a buddy of OBAMA. So was Corzine. The printing presses will just fire up again, and U.S. Media won't DARE to call it QE3, if they even report it, at all.
We can't endanger the Messiah's reelection in ANY way, doncha know.
MF Global went under....
To save Morgan. The 'Zini was brought in for the hit.
maybe this is why they hits golds and silvers.
Ha! You think these cocksuckers need a reason??
should have seen the weekly JPM put volume going into close, prob Dimon buying, he just got his bonus. those puts prob be up 500%+ tomorrow. he's laughing all the way to the bank.
Dimon in Congressional testimony a month from now: "I don't have access to the records since I haven't been in the office. I was too busy arranging a sale of company assets to track small transactions of $100 or 200 billion. I did not think or intend that my instructions to transfer any customer money would be taken literally. The customer accounts vaporized. Don't hate me because I'm rich."
Dimon in Congressional testimony a month from now: "I plead da fif."
Fixed it for you.
Even if you are the wrong ass slewie, good link.
"we are not going to call another call every time the number moves half a billion dollars."
no clonie baloney?
Pretty long red candles on the spx.
Is this a formal event?
Long, red melty candles? Were you looking for me?
I feel like I just won the lottery ...
Doing God's Work sometimes comes out underpar for the coarse.
god
is unemployed ....
gross
did you hit jamie in the face with the spooie?
Of course, we know this is indeed not an "emergency" meeting. Emergency meetings would have been years ago. This call is Damage Control, right up to the 5pm timing. JPMorgan is going Print or BUST!
Hey look everyone:
FAZ is fun again!
Wheeeeeeeeeeeee!!!!!!!!!!!!
WTF? Mark-To-Market still exists? WTF.
Yes, it does. And worse:
"Basically JPM has suffered massive losses at its CIO group most likely due to its IG/HY positions held by Iksil."
Or perhaps Greek sovereign swaps?
Dear Santa Bernank,
All I want is a FAZ and DZZ double for Christmas.
Preferably by August so I can commit to a long vacation in the islands.
Thank you,
John
I had to go into my account to check how much FAZ I bought last month -- LOTS!!! WEEEE!
It's been the best. Got out again at 51, got in at 21.17. Wheeeeeeeeeeeeee!!!!
Double
Bitchez.
Mark-to-Market on synthetic credit portfolio nonetheless. Synthetic being no actual assets being held. Someone really fucked up a bet. There is more to this story.
RASPUTEN I TELL YOU - http://hedge.ly/gFWVSm
From that chart, it must be much much more than 2 billion dollars in loses. I would say it could be 80 billion if not more.
Looks like I picked the wrong day to stop sniffing glue!
I only know one thing at this point. REIT equity is the only financial instrument to never ever EVER go down. Somehow this is bullish.
Brother Boiler,
Ummmm.....its the banks that hold all that REIT equity. I think you just got your catalyst to sell all of those over-priced animals.
IYR barely budging AH.
JPM - 5% , IYR -0.6%
I don't get it anymore.
UPDATE: IYR improving and about to post AH gains. Just to make it completely retarded.
Yep Cdad, this is another 'signal' they put out to tell those in the know to GTFO.
JP Morgan himself must be rolling over in this grave loss.
Everything is bullish until it isn't. At some point the Fed loses unless they double down. So far, the Fed hasn't decided who they want to be POTUS.
Does it matter? POTUS jus be takin' orders, he don't be makin' 'potant decisions.
OH YES it matters...because they want someone in charge that won't prosecute.
Nevermind, neither clown will, back to the coin flip.
And FAZ was a STEAL at $21....I'm just sayin'....
I guess you didn't understand the ebonics. POTUS doesn't make any major decisions, he only takes orders. POTUS isn't IN CHARGE of anything that they don't LET him be in charge of. POTUS is a figurehead, a frontman, nothing more. Prosecution isn't even in the vocabulary.
Prosecute. I'm still laughing.
Just Call Bullshit Barry... Randy
Obama Bin Lyin' aka Barry Soetoro, the Useful Idiot Front man, Wall Street puppet, corporate owned douche hole, Teleprompter-n-cheif only has one decision per day...
Which cheeseburger joint for lunch...
But, but, but, Obromney will do such a good job prosecuting his old hedge fund buddies.
Er, sorry, even sarcasm like that might be too much for everyone tonight.
Relax, JP-Morgan is short. They are front-running themselves and all their own shorts will pay big time. Yes the fraud is now that blatant.
I had the same thought. In the good for nothing hearings soon to ensue JPM will come up with a new term, "autohedge", e.g., and that will do the trick.
Never saw it coming...
Black swan?
More like a narwhal, I think.
Shit Hawk.
But it passed the Bank Stress Test with flying colors? How could this be??
Just like Dexia and Bankia. Don't you like these names. Like Levitra.
Now you know why the market sold off this afternoon...................nothing some Depends wouldn't fix...............
Uh oh.
Sell silver save JP Morgan!
Harvey's commentary last night talked about this sort of thing. Actually it was that imperious wit, Jim Willie, who had the most to say about it.
hahahaha
<slow motion golf clap>
Today we got Shanghai new silver contract and now this. Couldn't have happened to a nicer guy.
Dimon has hit into the rough?
So, this may hurt his second coming status?
Genuflect when you say that ...
Nice. "A Dimon in the Rough"
I hope WB7 is ginnin' up sumpin' tasty over dis.
Sell some paper silver for a liquidity injection.
pleeeeeeeeeeeeeeeeeze
Do you mean cover shorts?
About time.
couldn't happen to a nicer bunch of satanic mongoloids.
Jamie Dimon will threaten to have people sleeping with the fish (and not the ones in blythe's pants) if anyone does anything untoward before the firm though.
fyi, Blythe wears silver shorts...
(credits magpie)
yes for the antibacterial properties I expect since her ham wallet smells like an open grave.
p.s. that is a good one lmao.
gawd - all I can think of is an image of bigfoot getting sniped
BULLISH FOR PUTS!!! First of the US Bankster dominoes to crash...
Cue CNBC Scramble...
We need Dick Bove in here pronto!...
We're workin' on it! Somebody tee up makeup - and get us a wheelchair, some Ensure, a bib, and a spare bib.
Wouldn't you just LOVE to know who got the phone call at 3pm and went mega-short JPM into the close ...
Well well...and with the VIX having f'n flash crashed exactly at the close today...I wonder how f'n mispriced that indicator is now, hmmmm?
Just great. More manipulations! More off balance sheet instruments! More criminal bankers...one in every American household, in fact! More 6 sigma currency moves! More misallocation of capital!
And ALL IN THE NAME OF PRESERVING THIS BANKRUPT BANKING INDUSTRY AND ALL OF ITS BUDDIES IN CONGRESS!
Fuck me.
As I've already stated .. Cops looting the stores in broad daylight in front of the TV cameras and nobody gives a shit.
This could also be the snowball starting down the mountain
Every crash needs a trigger
They have 300 million in silver. Sell that and.... Oh... It's a collateral.... And spoken for....
oops
Grab money from MF Global! Oh wait...
Since when does any bank mark to market anymore? Is Egan Jones threatening to use actual values in ratings decisions? Fed will just ram through them unless . . . there is an intentional attempt to reduce medicated manipulation of the markets before the great sov. debt resets begin.
If you thought Lehman and '08 was disruptive, just wait til you see 2012 Sov. Debt stick save.
If mark-to-market was enforced, all the big banks in the western world would implode.
Immediate and absolute collapse. And all that is is a change in accounting convention as to when reality is recognized.
The world as we know it sits just a few excel keystrokes away from financial obliteration.
TruFuckingDat
Commencing MTM in -1, -2, -3, ...
I love how the markets first popped AH on the news of the conference call . oops.
Quote from Blythe just one month ago: "We have offsetting positions. We have no stake in whether prices rise or decline. Rather we're running a flat or relatively flat matched book."
The halflife for lies being exposed is going down fast these days.
They have a "matched book" in Gold & Silver ....
Next Half of 2012, someone will "light the match"
Physical Bitchez
I didn't realize there was still such a thing.
(SARC)
I didn't think the FED marked-to-market, and I didn't think they could take losses.
We've all seen this before...but, let's watch it again.
http://www.youtube.com/watch?v=9MRoF25gPAg
tip of the hat to ZH and the TD's; http://www.zerohedge.com/news/why-jpms-chief-investment-office-worlds-largest-prop-trading-desk-fact-and-fiction
bravo guys and gals
Details slowly leaking. Losses of $4.2 Billion "reasonably possible."
This has fucking Greek swaps written all over it.
Now ask yourself how much banks have in Spain.
lotz
much more than greece
Jamie Dimon:
"What, me worry?
I'm TBTF."
If this isn't bullish, then I truly don't know what in the hell is.
I am laughing and laughing and laughing so much that I nearly can't type.
From March 31st to May 10th, Bruno Iksil was taking LSD and heroin at his trading desk.
Of course he was, and every day he watched the Greek PSI get closer and closer to his paper.
One would hope other banks are looking at their Spain swaps, that ISDA will declare null and void.
Time for the US government to seize JPM, eliminate all equity, and sell off the assets.
There are no assets, it's MOTU
Teach them a Lehman lesson.
The assets they got from MFG?
How many times can they sell them before the muppets wise up and stop buying?
this stock is gonna impload!!! what a huge loss!!!!
What!? There are accounts that probably need to be "marked to market"?! ... who could have seen this coming ...
QE3 Tomorrow !!
PArty Party Party
The stock is down 6% after hours
not tomorrow ... but if things spiral out of control and can't be contained by the Asian open Sunday evening, I imagine something will happen ...
Yes, there is something brewing ... Am so happy that those fuckers imploded
This is a small gift from god to all those MF-Global Victims, and more to come
SHIT...Dimon just vaporized the MF money too... Cock sucker!
This fucker is hiring Corzine as a consultant....Sharpen Pitchforks!
correction he 'corzined' the money
What is the diameter of Bruno Iksil's fingers? Just wondering if he has fat fingers.
I´d would up arrow you if you hadn´t felt the need to add that last sentece. You ruined quite a funny joke.
And.... It's gone
It's the new fat cat dance, vaporization is sweeping the nation.
No problem We will hedge it. Waaaaa
Let's hypothecate the re-rehypothecated amount, pre margin hypothecation and then guess at hypothecial CDS exposure. Figure what, a margin call on about $45B?
we didn't start the fire.
Lehman/Fuld - Black Swan
JPM/Dimon - Black Swine
Fed should IMMEDIATELY approve another JPM dividend increase. You know, b/c raising dividends implies better financial position of the company and when dividends increase the stock goes higher. It creates "wealth effect", right? Otherwise the market will implode tomorrow... whcih can'tbe allowed to happen
So that's what they used the MF Global cash for!!!
Dimon: "Obviously we should have acted sooner."
Dimon is done speaking, will take a few questions.
Dimon calls the mistakes "egregious" and "self inflicted" and takes blame as top management. "We will admit, we will learn from it, we will fix it and move on."
Dimon calls the mistakes "egregious" and "self inflicted" and takes blame as top management. "We will admit, we will learn from it, we will fix it and move on."
"These were egregious mistakes, they were self-inflicted."- Dimon
Dimon says capital positions under Basel III, the all important future rules, will fall to 8.2% of risk-weighted capital from 8.4%.
Dimon says an incident like this is why you have a "fortress balance sheet." So that reference didn't take too long.
Dimon says volatility will be high, will be risky for a couple of quarters.
Dimon warns the bank could be facing $1 billion in losses on this.
Dimon calls it "sloppy" says "all appropriate" measures will be taken.
From Dimon: "$2 billion trading loss on synthetic credit position."
Dimon calls trade: "flawed, complex, poorly reviewed."
Dimon says the strategy was "Flawed complex poorly reviewed poorly executed and poorly monitored."
J.P. Morgan has also decided that its "value-at-risk" model was inadequate and is going back to an older model.
J.P. Morgan is now forecasting an $800 million loss in the corporate segment in the second quarter.
previous zh articles on this
http://www.zerohedge.com/news/behind-iksil-trade-ig9-tranches-explained
http://www.zerohedge.com/news/footprints-whale
http://www.zerohedge.com/news/jpmorgans-whale-responsible-rising-equity-tide
http://www.zerohedge.com/news/why-jpms-chief-investment-office-worlds-largest-prop-trading-desk-fact-and-fiction
I have an idea -- why don't they just sell the crap to the FED at par ... they'll buy fucking anything ...
but but but but JPM has NO prop desk trading
BLYTHE TOLD ME SO !!
Dimon you FUCKIN FUCK!
to be honest - I haven't a clue what half of you are saying.
What do you mean by that?
My aplologies for the formatting in my previous post, this should be easier on the eyes:
Dimon personally apologizes for meetings he had this week with analysts where he wasn't allowed to say anything.
5:10 pm$2 billion trade came in 2Qby Paul VignaAdd a Comment
Question: When did you catch it? When did you update regulators?
Dimon says there were "small" losses in the first quarter, and the $2 billion loss came in second quarter. "Obviously, that got our attention."
5:09 pmby David BenoitAdd a Comment
Dimon: "Obviously we should have acted sooner."
5:09 pmby David BenoitAdd a Comment
Dimon is done speaking, will take a few questions.
5:08 pmby David BenoitAdd a Comment
Dimon calls the mistakes "egregious" and "self inflicted" and takes blame as top management. "We will admit, we will learn from it, we will fix it and move on."
5:08 pmby David BenoitAdd a Comment
Dimon calls the mistakes "egregious" and "self inflicted" and takes blame as top management. "We will admit, we will learn from it, we will fix it and move on."
5:08 pmself-inflicted mistakesby Paul VignaAdd a Comment
"These were egregious mistakes, they were self-inflicted."- Dimon
5:08 pmby David BenoitAdd a Comment
Dimon says capital positions under Basel III, the all important future rules, will fall to 8.2% of risk-weighted capital from 8.4%.
5:07 pmfortress balance sheetby Paul VignaAdd a Comment
Dimon says an incident like this is why you have a "fortress balance sheet." So that reference didn't take too long.
5:07 pmVolatile, riskyby Paul VignaAdd a Comment
Dimon says volatility will be high, will be risky for a couple of quarters.
5:07 pmby David BenoitAdd a Comment
Dimon warns the bank could be facing $1 billion in losses on this.
5:06 pmby David BenoitAdd a Comment
Dimon calls it "sloppy" says "all appropriate" measures will be taken.
5:06 pmBig Lossby Paul VignaAdd a Comment
From Dimon: "$2 billion trading loss on synthetic credit position."
Dimon calls trade: "flawed, complex, poorly reviewed."
5:06 pmby David BenoitAdd a Comment
Dimon says the strategy was "Flawed complex poorly reviewed poorly executed and poorly monitored."
5:05 pmby David BenoitAdd a Comment
J.P. Morgan has also decided that its "value-at-risk" model was inadequate and is going back to an older model.
5:04 pmby David BenoitAdd a Comment
J.P. Morgan is now forecasting an $800 million loss in the corporate segment in the second quarter.
5:04 pmby David BenoitAdd a Comment
Jamie Dimon has begun speaking.
5:04 pmby David BenoitAdd a Comment
Another note from the 10Q, because of the CIO repositioning, "net income in Corporate likely will be more volatile in future periods than it has been in the past."
(Corporate for JPMorgan doesn't mean the whole corporation, just one of its few segments.)
Edit it dimon! I mean dammit!
But what Jamie did not say was......we are exposed,open and bleeding in a shark infested pond with no shore of safety at hand.
subsequently.. we are dead meat in a market that has no mercy. It will take a short time only for the proud name of JPM to disappear into the pages of history .
Vail JPM .... I fart in your general direction
Dimon: "The volatility this quarter and next could cost us a billion dollars or more, but we'll try to not let it be negative."
I'd love to see how he's going to try to pull that off. There's only a few dollars between $0 and -$1,000,000,000, right?
If they play around enough they might be talking about real money...
<implied sarc tags>
All I see are ones and zeros just move them around in different ways, it's all good.
Sympathy for the Devil.
Jamie Dimon priming Ben's QE3 pump.
It is not JPM's money anyway. It was their clients' money, even if it was JPM's money.
Well, when they "earn" money it's Theirs (and they shouldn't have to pay taxes on it); when they "lose" money it's someone else's (clients', govts/taxpayers; AND, they get to write it off).
rogue trade season.
Anybody think Ben can keep up tomorrow? Press that button and just hold it. LOL!
10 PRINT *
20 GOTO 10
BONUS TIME!!
CNBC: Where the hell is Dick Bove? Have him to free up his calendar for all day tomorrow. Actually, see if we can get him to be on KudBlow tonight.
listen to these analysts suck up and toss soft BALLS
"I love the smell of napalm in the morning"