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FBN’s Liz MacDonald on the SEC beginning an informal inquiry of the bank’s disclosure of its losses.
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He asking questions about this -- two billion dollar trading -- -- Donald -- covering it working hard on this I know girl.
What's up what's the latest -- way it's not.
And it -- -- -- to my sources close situations on investigation into accounting.
That probably is overstating it it's -- there it's an informal -- they've been asking questions.
This is triggered.
First of all -- Bank of America analyst and Merrill Lynch analyst who -- reports and a back in April saying you know fast money smells blood because they saw these outsized bet.
Being placed by the so called London whale.
And and an index of corporate bonds that included if -- dates back to 2007 guys this index included Fannie and Freddie Mac.
And CIT group would also had some great names in there like at Burlington northern and Caterpillar to 121 names.
But the issue now that we're hearing is that the real problem for JPMorgan Chase.
-- a credibility issue he had Jamie Dimon first quarter earnings report can't -- -- consensus tempest in a teapot.
And -- longer -- says yesterday in this stunning emergency after hours.
Conference call.
Complexity.
This was it very complex traits so which is that I mean dean do you know.
What your book is and that's a big question like hanging over the firm but is it relative it is -- relative to.
You billion dollar trade right -- -- you could find two billion dollars anywhere you know yeah.
They issued a fifteen billion dollar stock buy back well announced thirteen I mean it could be that simple -- you're right I mean that's a -- -- and that its shareholder equity there's a great it's a hundred billion.
But the real issue latest weapons of mass destruction and off -- write the value at risk and -- -- -- risk problems than doubled within days.
And we've got -- -- got a comment from Jamie Dimon from about what was going on behind the scenes take a listen to what he said yesterday in a conference call pretty stunning stuff.
They're not there's some stupid willing to hold as long as necessary inventory and -- severe volatility.
-- the volatility progress this quarter and next quarter so will be you could -- does that -- two billion dollars or more.
Obviously we're gonna work hard to have that not be negative at all but it is risky and it will be for a couple quarters.
So these are really complex -- -- a credit derivative traces could take some time.
To unwind the big question you Americas look I think what's worrying is the surprise -- emerging began yesterday and that spreads fear and what else is out -- not -- JPMorgan but across the financial industry yeah that's a great point.
You know listen any when he when he says that's gonna take some couple quarters to unwind you know and it's billions he could actually victim actually ticked that those derivatives and -- them off until hold to maturity book and not marking to market I -- I delegate -- you want to -- But they -- just warehouse and effectively right and so you know so where do you go from here the question is what other banks are doing things like this of course all -- -- I don't think -- here this is gonna stick here you know the OCC the Federal Reserve all the bank regulators have been crawling over the -- the last couple of years.
The human saying -- -- -- time there's still toxic assets on those down sheets in.
I guess there was a McDonald's your awesome things from.
