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.

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