JPMorgan trading loss widens to $3B

More pain for JPMorgan Chase:

The trading losses suffered by JPMorgan Chase have surged in recent days, surpassing the bank’s initial $2 billion estimate by at least $1 billion, according to people with knowledge of the losses.

When Jamie Dimon, JPMorgan’s chief executive, announced the losses last Thursday, he indicated they could double within the next few quarters. But that process has been compressed into four trading days as hedge funds and other investors take advantage of JPMorgan’s distress, fueling faster deterioration in the underlying credit market positions held by the bank.

A spokeswoman for the bank declined to comment, although Mr. Dimon has said the total paper trading losses will be volatile depending on day-to-day market fluctuations.

The Federal Reserve is examining the scope of the growing losses and the original bet, along with whether JPMorgan’s chief investment office took risks that were inappropriate for a federally insured depository institution, according to several people with knowledge of the examination. They spoke on the condition of anonymity because the investigation is still under way.

The overall health of the bank remains strong, even with the additional losses, and JPMorgan has been able to increase its stock dividend faster than its rivals because of stronger earnings and a more solid capital buffer.

Read more …

That last paragraph is what gets me.  The company can lose $3B and still be strong.  Why are they complaining so much about lost fee revenue from the new (and reasonable) rules regarding debit cards, automatically enrolling people in debit card overdraft schemes, etc.?  Because they don’t want to give up the free money they are “stealing” from retail banking customers.

Foreclosure settlement money going to plug State budget gaps

The New York Times reports today that about 10% of the foreclosure settlement money being paid by the banks is being siphoned off to plug some state budget deficits.

Needy States Use Housing Aid Cash to Plug Budgets

Hundreds of millions of dollars meant to provide a little relief to the nation’s struggling homeowners is being diverted to plug state budget gaps.

In a budget proposed this week, California joined more than a dozen states that want to help close gaping shortfalls using money paid by the nation’s biggest banks and earmarked for foreclosure prevention, investigations of financial fraud and blunting the ill effects of the housing crisis. California was awarded more than $400 million from the banks, and Gov. Jerry Brown has proposed using the bulk of that sum to pay the state’s debts.

The money was part of a national settlement valued at $25 billion and negotiated with five big banks over abuses in their mortgage and foreclosure processes.

The settlement, reached in February after a year of talks and intervention by the Obama administration, was the second-largest in history involving the states, trailing the tobacco industry settlement, and represented the first large-scale commitment by banks to provide direct aid to borrowers.

As part of the settlement, the banks agreed to pay the states $2.5 billion, money intended to help homeowners and mitigate the effects of the foreclosure surge. But critics complained that this was the only cash the banks were required to pay — the rest comes in the form of “credits” for reducing mortgage debt and other activities. Even that relatively small amount has proved too great a temptation for lawmakers.

Only 27 states have devoted all their funds from the banks to housing programs, according to a report by Enterprise Community Partners, a national affordable housing group. So far about 15 states have said they will use all or most of the money for other purposes.

In Texas, $125 million went straight to the general fund. Missouri will use its $40 million to soften cuts to higher education. Indiana is spending more than half its allotment to pay energy bills for low-income families, while Virginia will use most of its $67 million to help revenue-starved local governments.

Like California, some other states with outsize problems from the housing bust are spending the money for something other than homeowner relief. Georgia, where home prices are still falling, will use its $99 million to lure companies to the state.

“The governor has decided to use the discretionary money for economic development,” said a spokesman for Nathan Deal, Georgia’s governor, a Republican. “He believes that the best way to prevent foreclosures amongst honest homeowners who have experienced hard times is to create jobs here in our state.”

Andy Schneggenburger, the executive director of the Atlanta Housing Association of Neighborhood-Based Developers, said the decision showed “a real lack of comprehension of the depths of the foreclosure problem.”

The $2.5 billion was intended to be under the control of the state attorneys general, who negotiated the settlement with the five banks — Bank of America, Wells Fargo, JPMorgan Chase, Citigroup and Ally. But there is enough wiggle room in the agreement, as well as in separate terms agreed to by each state, to give legislatures and governors wide latitude. The money can, for example, be counted as a “civil penalty” won by the state, and some leaders have argued that states are entitled to the money because the housing crash decimated tax collections.

Read more …

Simply distasteful.

Dimon’s incomprehensible answer to the $2B loss

Huh?

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JPMorgan Chase blows $2 Billion in proprietary trade losses

JPMorgan Chase’s loss of $2 Billion in proprietary trading losses reported yesterday by egg-on-the-face CEO Jamie Dimon only helps to show the banks true colors – a relentless quest for profits above all else.

JPMorgan Chase, the largest bank in the United States, said Thursday that it lost $2 billion in the past six weeks in a trading portfolio designed to hedge against risks the company takes with its own money.

Read the entire story.

A reader remembers Dimon commenting on Google’s “Don’t be Evil” motto: “We have a motto too. It’s make more money.”

This loss can only mean that Chase will try to boost it’s profits by sucking more fees out of customers.

Chase annual shareholders meeting

A reader sent this in:

Tampa, FL, Chase campus is expecting large crowds of picketers on May 15, 2012, to protest onsite at the Annual Shareholders Meeting where the big money-making executives are scheduled to be present.

The PDF for this event is available at www.Shareholder.com
or simply Google this phrase “site:shareholder.com 2012 chase shareholder meeting tampa”

Employees are being encourages to stay home on May 15, 2012, in light of the heightened security for this three-building campus at 10430 Highland Manor Drive, 33610

I can’t vouch for any of the information but if past big bank (including Chase) annual shareholder meetings are any guide, protests are likely.

JPMorgan Chase has 9th worse corporate reputation in the US

Chase CEO Jamie Dimon recently complained that the New York Times hates banks.  There is some good evidence that it isn’t just the New York Times, or media in general that hates banks, but pretty much everyone on the US.  Furthermore, Chase in particular seems to have people’s ire, and a Harris Interactive poll found them to have the 9th worse corporate reputation in America.

A company’s reputation is formed not only by the products it sells, but by the decisions it makes in times of crises. For some, that’s a good thing. For others, some present on this list, not so much.

Using survey results, market research firm Harris Interactive has compiled a list of the U.S. companies with the best and worst reputations. For the 12th Annual Harris Interactive U.S. Reputation Quotient Survey roughly 30,000 Americans were asked to rate the 60 most visible companies in the United States based on six factors: financial performance, products and services, workplace environment, vision and leadership, social responsibility, and emotional appeal. Combining these factors, Harris tallied a total RQ Score. Scoring above 80, for reference, indicates a company’s reputation is “excellent.”

Overall, companies in this year’s survey ranked higher than the previous year, with 16 companies rated as “excellent” compared to only six last year. Tech companies, in general, seem to have the best reputations, while financial and oil companies have the worst. Notorious scandals like the BP Gulf Oil Spill and Goldman Sachs’s role in the subprime crisis seem to have lingered in American minds, and companies with the worst reputations scored especially poorly when rated on whether they have “high ethical standards” and could be “trusted to do the right thing.”

Car companies largely fell somewhere in the middle, but that could change in the coming years. General Motors and Chrysler, while stuck in the bottom 11 this year, did make the third and fourth highest gains on the list, respectively, of any company.

Below are the 11 companies with the worst corporate reputations:

9. JPMorgan Chase

Chase banking glitch causes double charges on accounts

Another gift from the technically savvy people at Chase (article 1, article 2).

J.P. Morgan Chase & Co. (JPM) acknowledged Tuesday that it accidentally charged customers in some states twice for their debit-card transactions.On Tuesday afternoon, the bank fixed the glitch that had affected transactions between Friday and Monday, a spokesman said. J.P. Morgan will refund any fees tied to the double bookings.

Purchases were booked as a temporary charge, but when the transaction was actually processed, the temporary charge remained, which meant the customer was charged twice for that same purchase, customer accounts show.

By Tuesday afternoon, J.P. Morgan, the nation’s largest bank by assets, had credited customers for the errant charges. Account balances are corrected, a spokesman said. The original, duplicate and corrected transactions are still on the online account statements until those are synchronized overnight, at which point only one transaction will be shown.

Fraud is not the issue, the spokesman said. Rather, a technical glitch related to a recently changed computer program inside the bank occurred Monday, the first business day of the month. Since debit transactions made over the weekend are also processed Monday night, those were also impacted by the double booking.

Chase couldn’t say how many of its 25 million customers and transactions were impacted. But the glitch hit customers in the tri-state metropolitan region of New York, New Jersey and Connecticut.

Chase told customers in Twitter messages, “We do apologize for the error. We are working to get the charges reversed as quickly as possible. We appreciate your patience.”

“Chase bank gave me a heart attack,” one Twitter post said. “I was declined for a $2 coffee this AM, checked account… HUNDREDS of $ in duplicated charges.”

On March 26, J.P. Morgan Chase said its consumer-banking website experienced technical difficulties that slowed online banking for several hours and intermittently made access to the site unavailable, including through mobile devices. It resolved the issue the same day.

Chase down again

Readers are reporting another outage this morning that has lasted several hours.  The login screen as of now appears active and I can’t test it as I am not a Chase customer.  One reader reported being redirected to this page.