Thursday, June 28, 2012

JPMorgan trading losses could reach $9 billion

Welcome to the morning roundup. Here's a look at today's banking and finance news.

JPM losses. Losses on JPMorgan Chase & Co.'s trading blunder could total as much as $9 billion, far higher than earlier estimates, the New York Times reports, citing sources familiar with the situation. CEO Jamie Dimon initially said the bank's $2 billion trading loss could double within the next few quarters. But losses have mounted as the bank works to exit its position.

Reverse mortgages. Federal regulators say new rules might be needed to address hidden dangers in reverse mortgages, the Wall Street Journal reports. Those loans, which enable cash-strapped seniors to borrow against the equity in their home, sometimes come with deceptive marketing practices and complicated terms, the Consumer Financial Protection Bureau said. Big banks, including Charlotte's Bank of America Corp., have left the reverse mortgage market in recent years.

Risky lending. The U.S. Federal Home Loan Banks' unsecured lending to foreign banks jumped as the European debt crisis intensified, raising concerns about their risk management, Bloomberg reports. An auditor's report said the Federal Housing Finance Agency, which oversees 12 regional Home Loan Banks, should tighten limits on that lending.

Economic reports. Consumer spending and export growth in the U.S. were weaker than expected in the first quarter, suggesting less momentum in the economy, Reuters reports. A separate report showed the number of Americans filing for jobless benefits fell last week but remains elevated. Meanwhile, stocks opened lower this morning amid concerns at home and overseas.


Garth Vader said...

Any firm that loses $9 billion shouldn't just be ALLOWED to go out of business, it should be REQUIRED to go out of business.

"Too Big To Fail" is really "A License To Fail". Time to revoke that license and put Jamie Dimon on the unemployment rolls.