Top Wall Street bankers testified before The Crisis Commission whose job it is to find out what went wrong during the financial meltdown. The Chairman of the ten member commission is Phil Angelides,

Mr Angelides grilled Lloyd Blankfein, CEO of Goldman Sachs GS about its practice of first selling sub prime mortgage securities to investors and then selling them short, betting that the securities would go down. Blankfein answered that Goldman did not have a legal obligation to disclose when it was betting against the securities it was selling. In reply, Angelides said: "Sounds a little bit to like selling a used car with faulty brakes and then buying insurance on the driver."

Continue reading Wall Street Titans Testify Before the Financial Crisis Inquiry Commission

Wall Street Titans Testify Before the Financial Crisis Inquiry Commission originally appeared on BloggingStocks on Wed, 13 Jan 2010 17:40:00 EST. Please see our terms for use of feeds.

Continue reading Closing Bell: Low Rates and Easy Finance Policy to Stay for Stocks (KFT, JPM, GOOG, BIDU, EK, LLTC, NBG, MRNA, NBG)

Closing Bell: Low Rates and Easy Finance Policy to Stay for Stocks (KFT, JPM, GOOG, BIDU, EK, LLTC, NBG, MRNA, NBG) originally appeared on BloggingStocks on Wed, 13 Jan 2010 16:00:00 EST. Please see our terms for use of feeds.

Against this backdrop, Jamie Dimon of JPMorgan Chase (JPM) said "If some unforeseen circumstance should put this firm at risk of collapse, we should be allowed to fail."

Dimon went on to say writing in Friday's Washington Post: "The term 'too big to fail' must be excised from our vocabulary." Dimon also argued against limiting banks' size saying that increased scale can benefit customers.

Continue reading JP Morgan's Dimon says: 'We should be allowed to fail'

JP Morgan's Dimon says: 'We should be allowed to fail' originally appeared on BloggingStocks on Fri, 13 Nov 2009 14:00:00 EST. Please see our terms for use of feeds.

Who are they? First, we have Lloyd Blankenstein, CEO of Goldman Sachs Group (NYSE GS). Then we have Jamie Dimon, CEO of JPMorgan Chase & Company (NYSE JPM) and then CEO, Vikam Pandt of Citigroup Inc. (NYSE C).

You are probably also wondering how do we know this? The Associated Press did a review of Geithner's calendar under the Freedom of Information Act.

In his first seven months on the job, Geithner made at least 80 contacts with the "big three." Not only that Geithner jumps to the phone when they call. They are the dominant players on Wall Street who can move markets and even economies.

Continue reading Why does Geithner always take calls from the big three bankers?

Why does Geithner always take calls from the big three bankers? originally appeared on BloggingStocks on Thu, 08 Oct 2009 14:20:00 EST. Please see our terms for use of feeds.

Consumer bankruptcies have already spiked more than 30% this year, and it looks like the trend shows no signs of flagging. The American Bankruptcy Institute predicts that the tally could hit 1.4 million by the end of the year. So, although there are some experts signaling that the economy is on the upswing, the downstream effects of bankruptcy on consumer spending and corporate balance sheets are going to make it difficult for the market to turn the corner.

In July, more than 126,000 people filed for bankruptcy protection, and the filing rate was up 36.5% for the first six months of 2009 relative to the same period in 2008. The problem is affecting every rung of the social ladder.

Continue reading Consumer bankruptcies set to surge

Consumer bankruptcies set to surge originally appeared on BloggingStocks on Tue, 11 Aug 2009 09:00:00 EST. Please see our terms for use of feeds.

Continue reading Closing Bell: When sloppy days look pretty (GMCR, F, NTAP, JPM, BAC)

Closing Bell: When sloppy days look pretty (GMCR, F, NTAP, JPM, BAC) originally appeared on BloggingStocks on Tue, 02 Jun 2009 16:00:00 EST. Please see our terms for use of feeds.

JP Morgan Chase & Company (NYSE JPM) held its annual shareholder meeting with Jamie Dimon, chief executive officer holding court.

Among his jabs against the Administration he complained that the rules against hiring foreigners was a "complete and utter disgrace." We might ask Mr. Dimon if he plans to hire another Chinese mathematician such as David X Li, whom JP Morgan Chase hired in 2000. Mr. Li developed a formula that created a single number from which traders bet billions of dollars in the past decade in derivatives which eventually brought the country to its knees when the housing bubble burst. This may help to explain why JP Morgan Chase has $87.7 trillion of derivatives "off the books." We might ask Mr Dimon to disclose the exact position in derivatives that he holds "off the books." Wouldn't that make fascinating reading?

Continue reading JPM's Jamie Dimon rambles on at the annual shareholder meeting

JPM's Jamie Dimon rambles on at the annual shareholder meeting originally appeared on BloggingStocks on Wed, 20 May 2009 14:00:00 EST. Please see our terms for use of feeds.

Continue reading Closing Bell: A roar over a moo (JPM, GM, VMW, FSLR, BRK.A)

Closing Bell: A roar over a moo (JPM, GM, VMW, FSLR, BRK.A) originally appeared on BloggingStocks on Fri, 27 Mar 2009 16:00:00 EST. Please see our terms for use of feeds.

Continue reading Closing Bell: Can you say two rallies in a row? Barely (AAPL, JPM, MS, SIRI)

Closing Bell: Can you say two rallies in a row? Barely (AAPL, JPM, MS, SIRI) originally appeared on BloggingStocks on Wed, 11 Mar 2009 16:05:00 EST. Please see our terms for use of feeds.

Following a meeting with CEO Jamie Dimon on Feb. 6, Citigroup analyst Keith Horowitz believes that JPMorgan Chase & Co. (NYSE: JPM) could be among the first banks to repay its indebtedness under the government's Troubled Asset Relief Program (TARP).

"Clearly there is a risk of future government interference, which is why we believe management would like to get out," noted Horowitz. However, while Dimon thinks banking industry returns will be compressed during the intermediate term due to the government's involvement, he doesn't see any significant changes to JPMorgan's long-term outlook.

Continue reading Will JPMorgan Chase be the first to repay its TARP loan?

Will JPMorgan Chase be the first to repay its TARP loan? originally appeared on BloggingStocks on Mon, 09 Feb 2009 12:40:00 EST. Please see our terms for use of feeds.

Yesterday, business reporter Charlie Gasparino wrote in The Daily Beast that JP Morgan (NYSE: JPM) and its CEO Jamie Dimon, would be the next big financial institution for fall apart. He wrote, "But Dimon is feeling that heat, nonetheless, from analysts, who believe his firm will post a loss this quarter, the first since he became CEO."

Well, maybe so, but throwing stones at the people who have done well in an industry that has not is easy, perhaps too easy. If JP Morgan does lose money, it will join a long line of other firms that have done so. If its loss is modest, it will still be better off than most if not all of its peers.

Banks may be the most heavily followed companies on Wall Street. Analysts and the press crawl over the PR and financial reports, looking for bad news. That means the market should be relatively efficient at putting values on them, especially after two years of humiliation in which they got those values wrong.

If the Street is right, JPM still has a brighter future than rivals Citigroup (NYSE: C) and Bank of America (NYSE: BAC). Over the last six months, JPM shares declined about 10%. BAC is down almost 40% and Citi is off almost 60%.

It may be a little early to write that JPM obit.

Douglas A. McIntyre is an editor at 247wallst.com.

Attacking JP Morgan (JPM) originally appeared on BloggingStocks on Tue, 06 Jan 2009 10:46:00 EST. Please see our terms for use of feeds.

Wonder what happened to the hard earned money you paid in taxes? I can't account for all of it but $540 billion that went to six financial institutions is being used, in part, to operate 27 corporate jets. I may be the only one who feels this way, but I don't think the survival of the global economy depends on using taxpayer money to pay for financial executives to fly on their own corporate jets.

Here are the six financial institutions with the amount of taxpayer money they received and the number of corporate jets they're still flying:

• American International Group Inc (NYSE: AIG). $150 billion, seven corporate jets
• Citigroup Inc. (NYSE: C). $330 billion, four jets. (The $330 billion includes Citi's initial $25 billion in TARP money plus its more recent $305 billion in loan guarantees.)
• Wells Fargo & Co. (NYSE: WFC). $25 billion, one jet
• Bank of America (NYSE: BAC). $25 billion, nine jets -- its CEO Ken Lewis used $127,643 worth of its corporate jets
• JPMorgan Chase & Co. (NYSE: JPM) . $25 billion, four jets -- its CEO Jamie Dimon's personal use of its corporate aircraft totaled $211,182 in 2007
• Morgan Stanley (NYSE: MS). $10 billion, two jets -- its CEO John Mack's personal use of its corporate aircraft totaled $358,882 in 2007

Continue reading Six banks with $540 billion in bailout money still flying 27 corporate jets

Six banks with $540 billion in bailout money still flying 27 corporate jets originally appeared on BloggingStocks on Sun, 21 Dec 2008 15:44:00 EST. Please see our terms for use of feeds.

Continue reading Is Jamie Dimon the reincarnation of J.P. Morgan?

Is Jamie Dimon the reincarnation of J.P. Morgan? originally appeared on BloggingStocks on Fri, 26 Sep 2008 10:05:00 EST. Please see our terms for use of feeds.

DealBook reports that JPMorgan Chase & Co. (NYSE: JPM) CEO Jamie Dimon let out some bad news on JPMorgan's conference call today. Despite beating estimates, DealBook reported that JP Morgan's highest quality, so-called Prime mortgages, were, as Dimon said, "terrible, and we're sorry. We can say it eight times. It looks terrible."

Prime mortgages are not supposed to behave like subprime ones. But disappointment seems to be the big theme with the mortgage industry. Prime mortgages barely defaulted at all in the second quarter of 2007 -- JPMorgan wrote off 0.05% of them a year ago -- taking a $4 million charge. But in the same quarter of 2008, JPMorgan wrote off 0.91% -- and charged off $104 million.

And Dimon expects those Prime losses to triple -- to $300 million. If there's any good news, that $300 million is a mere 15% of the net income it earned this quarter. Still, it suggests the depth of the economic problems that lie ahead.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.

JPMorgan CEO: Our best mortgages are 'terrible and we're sorry' originally appeared on BloggingStocks on Thu, 17 Jul 2008 16:49:00 EST. Please see our terms for use of feeds.

Bloomberg News reports that Lehman Brothers Holdings (NYSE: LEH) wants to sell $4 billion in equity. But it already raised $6 billion so why does it need more? It should be no surprise -- but thanks to a chorus of statements by financial leaders that "the worst is over" -- including Lehman's CEO Richard Fuld, Jamie Dimon, Hank Paulson, and Barton Biggs some are surprised that there are still problems.

Since the crisis began -- last August when the Fed began cutting rates from 5.25% to 2% -- banks have been trying to reduce their ratio of debt to equity below the hugely risky 32:1. But it's hard when they hold $500 billion worth of Level 3 assets -- which don't trade and therefore have no objectively set market value. To maintain or improve their capital ratios, banks have been writing down the value of the securities on their books -- $276 billion worth so far -- and simultaneously raising capital. Citigroup (NYSE: C) has raised the most -- $44 billion.

S&P downgraded Lehman, Morgan Stanley (NYSE: MS) and Merrill Lynch (NYSE: MER) saying they may disclose more write-downs for devalued assets. And hedge fund manager David Einhorn -- who's short Lehman -- got into a verbal debate with Lehman CFO Erin Callan arguing that Lehman had failed to disclose $6 billion worth of such Level 3 assets -- known as Collateralized Debt Obligations (CDOs) and it needed to raise capital. Today's announcement suggests that Einhorn was right.

Just because executives act like cheerleaders, it doesn't mean investors should take them at their word.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He owns Citigroup shares and has no financial interest in the other securities mentioned

As Lehman seeks $4 billion in capital, is the worst really over? originally appeared on BloggingStocks on Tue, 03 Jun 2008 10:33:00 EST. Please see our terms for use of feeds.

JP Morgan's Dimon: Recession is just starting originally appeared on BloggingStocks on Wed, 14 May 2008 16:35:00 EST. Please see our terms for use of feeds.

Last weekend JPMorgan Chase & Co. (NYSE: JPM) struck a deal to acquire -- or steal -- The Bear Stearns Companies (NYSE: BSC) for $2 a share (or $236 million) with the help of $30 billion in Fed financing. For the first time in my life, I was amazed to read in the New York Times that JPMorgan is now negotiating to raise its bid to $10 a share -- or $1.2 billion.

Why is this happening? Because some big shareholders plan to fight the deal. A third of Bear Stearns is owned by employees and British billionaire financier Joe Lewis, the firm's largest shareholder, who had invested $1.26 billion in Bear over the last year at an average price of about $104. JPMorgan needs 51% shareholder approval for the deal to go through. Last night, Bear's board was negotiating to sell JPMorgan 39.5% of the firm -- leaving it in a position to need only 10.5% of shareholder support to complete the transaction.

However, even that 39.5% deal may not go through as the Federal Reserve, which guaranteed $30 billion of Bear's most illiquid assets, is sensitive to criticism that it bailed out Bear. It's worried that allowing that deal will subject it to even more criticism. On Sunday JPMorgan was negotiating with the Fed to take some of the heat off the Fed by assuming at least the first $1 billion in losses on Bear assets before the $30 billion kicks in.

Continue reading Why JPMorgan wants to pay five times more for Bear Stearns

Why JPMorgan wants to pay five times more for Bear Stearns originally appeared on BloggingStocks on Mon, 24 Mar 2008 08:40:00 EST. Please see our terms for use of feeds.

Today's breakingviews praises the idea about which I posted last week: a merger between Citigroup Inc. (NYSE: C) and JPMorgan Chase (NYSE: JPM). (DealBook has also picked this up.) I thought such a merger would be a good way to get JPMorgan CEO, Jamie Dimon, into Citigroup's CEO slot.

Here was my rationale: "Dimon -- who was Citi ex-CEO Sandy Weill's right hand man until Weill fired him for not giving his daughter a good enough job -- would probably enjoy running a combined Citi-JPMorgan Chase. After all, after he left Citi, he took over Bank One, which merged with JPMorgan Chase. And then Dimon took over from its former CEO, Bill Harrison. But a Citi-JPMorgan Chase combination could land Dimon in Sandy Weill's old slot once such a deal closed."

Breakingviews said: "J.P. Morgan boss Jamie Dimon is the top pick of many investors to succeed Mr. Prince. Not only did Mr. Dimon spend more than a decade carrying Sandy Weill's bags on the shopping spree that built Citigroup, he also has made the financial-supermarket model work for his current investors. Citi shares are down 31% in the past four years; J.P. Morgan shares are up 24%."

Continue reading Should Citigroup and JPMorgan merge?

Should Citigroup and JPMorgan merge? originally appeared on BloggingStocks on Thu, 29 Nov 2007 12:05:00 EST. Please see our terms for use of feeds.

Jamie Dimon, JPMorgan Chase's (NYSE: JPM) CEO, would be a great replacement for Citigroup Inc.'s (NYSE: C) recently retired CEO Chuck Prince. The only problem is that Dimon already has a job.

But Dimon -- who was Citi ex-CEO Sandy Weill's right hand man until Weill fired him for not giving his daughter a good enough job -- would probably enjoy running a combined Citi-JPMorgan Chase. After all, after he left Citi, he took over Bank One which merged with JPMorgan Chase. And then Dimon took over from its former CEO, Bill Harrison. But a Citi-JPMorgan Chase combination could land Dimon in Sandy Weill's old slot once such a deal closed.

Such a merger would probably be couched as a merger of equals. JPMorgan Chase's market capitalization of $140 billion is currently less than Citi's ($160 billion). But at the rate Citi is falling, that valuation gap probably won't last long. Then there's the little matter of the deposit cap -- no bank can control more than 10% of U.S. deposits. With combined deposits of $1.5 trillion -- which includes Citi's international deposits -- the combined banks would probably control more than 10% of the U.S.'s $7.5 trillion (as of January 2007) in deposits.

So the merged companies would need to divest some branches if they wanted the deal to go through and Dimon would not be able to take over officially until after the merger closed. But these seem like small prices to pay to get a good CEO for Citi.

Peter Cohan is President of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He owns Citigroup shares and has no financial interest in JPMorgan Chase.

Is a Citigroup-JPMorgan Chase merger the quickest way to replace Prince? originally appeared on BloggingStocks on Mon, 19 Nov 2007 17:00:00 EST. Please see our terms for use of feeds.

Panera Bread (NASDAQ: PNRA), an owner and franchisor of 1,115 bakery-cafes, is recently up $2.28 to $45.40.

• PNRA reported that third quarter revenue increased 35% to $276 million compared to the year ago period.
  
• Bear Stearns says: "Sales in line; guidance narrowed up versus consensus."
  
• PNRA overall option implied volatility of 37 is above its 26-week average of 34 according to Track Data, suggesting slightly larger price risks.

JP Morgan (NYSE: JPM), a global financial holding company, closed at $46.78.

• Bloomberg reported: "China may prevent foreign investors from taking control of domestic brokerages, a setback to Wall Street's ambitions to tap the world's fastest-growing stock market, people familiar with the planned rules said."
• JPM is expected to report EPS on 10/17.
  
• JPM October option implied volatility of 30 is above its 26-week average of 26 according to Track Data, suggesting larger risk.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Option update: Adjusting positions in Panera Bread (PNRA) and JP Morgan (JPM) originally appeared on BloggingStocks on Wed, 03 Oct 2007 10:10:00 EST. Please see our terms for use of feeds.