Posted on 11/09/2007 12:42:25 PM PST by Hydroshock
Bank of America said on Friday that market dislocations, including those related to collateralized debt obligations, will adversly impact results duing the fourth quarter, according to a filing.
The bank expects it to take more time for markets to return to a more normal environment with tighter credit spreads and greater liquidity, according to the filing.
Also Friday, JPMorgan Chase said shaky credit markets could trigger more write-downs in the fourth quarter as the bank is exposed to about $50 billion worth of leveraged loans, risky subprime mortgages and collateralized debt obligations.
JPMorgan did not give any specific potential write-down figures in the filing. But the bank said unstable market conditions could affect results.
As previously disclosed, the bank's portfolio of held-for-sale leveraged lending commitments stood at $40.6 billion at the end of September. These commitments are hard to hedge against losses as the market for corporate debt used in leveraged buyouts has diminished substantially in recent months.
(Excerpt) Read more at cnbc.com ...
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Not sure I really buy this. $46 Billion is a lot of money for you and me. It is a pittance for the money these institutions handle each and every day. Not to mention the Federal Govt which is spending about this much in Iraq every day and thats a minor fraction the budget.
Seems like another manufactured crisis.
JP Morgan: Profits $16.92 bil
So . . . exposure to 50 billion in leveraged loans is very significant. Not likely to lead to bankruptcy but very serious, especially if rising gas prices lead to inflation, recession, as they did in the 70’s and more and more of that 50 billion goes bad, and then safer loans begin to go bad as well.
“JP Morgan: Profits $16.92 bil”
Net Profit is 16.9 bil, gross profit is around 89 billion. Thats assuming a total write off of all these loans. Thats not gonna happen as the property is still out there. Besides thats a company risk and not a economy risk. Companies aren’t guaranteed profit.
“as they did in the 70’s and more and more of that 50 billion goes bad, and then safer loans begin to go bad as well.”
The sky is falling!
Big Surprise, bad loans went bad. Hysteria, panic, and doom won’t solve the problem. Bad for the company and its shareholders but a blip on the overall economy.
What is hurting the economy is all the hysteria and doom people are spreading.
They still haven’t realized the tip of the Iceburg yet...
This is in real dollar terms bigger than anything the US economy will have dealt with in about 70 years. It will take YEARS to shake out, and certainly will lead to recession if not a full fledged depression before its all over.
FROM THE ARTICLE: Also Friday, JPMorgan Chase said shaky credit markets could trigger more write-downs in the fourth quarter as the bank is exposed to about $50 billion worth of leveraged loans, risky subprime mortgages and collateralized debt obligations.
ALSO FROM THE ARTICLE: Bank of America does not directly offer subprime loans, but the value of the CDOs has plummeted as an increasing number of subprime borrowers have defaulted on their home loans. “We expect these significant dislocations in the CDO market to continue, and it is unclear what impacts these dislocations will have on other markets in which we operate or maintain positions,” the filing said
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Manufactured Crisis? Absolutely , manufactured by greedy MBA’s that think they can repeal reality with a few numbers changed on a spreadsheet and such ,,, REAL? You Betcha and it’s spreading ...
Why are JPM and BAC up today?
“Manufactured Crisis? Absolutely , manufactured by greedy MBA’s that think they can repeal reality with a few numbers changed on a spreadsheet and such ,,, REAL? You Betcha and it’s spreading ...”
Real for JPM just as it was real for Enron. Trying to blame the economy so they won’t go to jail for fraud, also real.
Is that a joke post?
I don’t get it.
I had to look the term up. Public schooling, you know.
I’ve been telling my wife my surprise at how B of A has avoided this credit mess so far. Especially because they have been one of the few banks to make subprime loans to ILLEGALS.
Working-class Americans will suffer until Ben Bernanke suck it up and finish the job he was assigned.
This liquidity crisis won’t be such a bad thing if it stops the dozen or so unsolicited credt card and personal loan offers I get in the mail over any given week.
Not a joke post. Certain realities exist in life. Markets go up, markets go down. Poor management will eventually kill your company. Making a bunch of risky loans will eventually do you in.
Real estate is a very large percentage of the economy. Creating hysteria among people about real estate is hurting everyone. The primary people who are hurt are those to took risky loans or are highly leveraged against real estate.
I do not feel sorry for a person who took a second mortgage against their home to buy a 2nd house and then repeated until they have 5-8 properties. Nor do I feel for the banks making those loans.
I’ve read stories that much of this money originated with European investors. Banks in Europe have already started to go under because of their bad loan practices.
I don't think that is the case. I think most people are clueless or doing well . . . and most others take your position, at least from what I've seen here at Free Republic. I don't think there is much hysteria or doom and gloom at all. That's what worries me!
Personally, I'm glad the crisis is hitting now.
If it hit mid-08 Hitlery would be a shoe-in as she exploited doom and gloom and coasted her way in all the way to Nov.
The worst of this will be over sooning than she was expecting. Her issues are going up in smoke.
Ben’s rate cuta re already hurting middle class America. In the form of hight oil, higher food prices adn lower dollars. We need a rate increase now.
C’mon and say the thing nobody is willing to say, particularly in an election year...
Sometimes smart fiscal policy require you to take a dose of sulfur for a few quarters to make thing sweet later.
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