Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
The action was poor this afternoon but it was highlighted by a huge volume spike in the last 20 minutes of the day, with big downward movement. Very suspicious. Now after the bell we have a news of a surprise JPM conference call to announce bad news – obviously it wasn’t a surprise to “someone(s)” of a large nature. Futures are getting punked to the tune of 0.7% 0.9% as I type. Seriously it is pathetic what happened between 3:40 and 3:55 PM, massive selling in the SPY ETF with volume 2-4x as high as any normal 5 minute period! That is the stuff that should make every “main street” person mad … incenses me.
On another front, once it it shows our “too big to fail” banks are still there, as glorified hedge funds with a banking arm – protected as ‘bank holding companies’ by the Fed. Glad we learned our lessons from 2008-2009. Not.
JP Morgan said it has encountered significant mark-to-market losses in its Chief Investment Office (CIO) since the end of the first quarter, and anticipates an $800 million loss in its corporate and private equity segment during the second quarter.
In a filing after the closing bell Thursday, JPMorgan said net income in its Corporate unit will be more volatile in future periods. The CIO has seen significant mark-to-market losses in its synthetic credit portfolio, the firm said, a portfolio that has “proven to be riskier, more volatile and less effective as an economic hedge than the Firm previously believed.”
Though partially offset by realized gains from sales of credit-related positions, the losses in the CIO’s total portfolio “exceeded its cost by approximately $8 billion.”
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Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund’s holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/holdings/blog
