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JPMorgan Said to Reach Record $13 Billion U.S. Settlement
So, $13B across 3.8B shares is $3.42 per share, or a 6.3% drop in stock price Monday?
I don't know what the company already set aside, but market usually over-reacts on such news, like with the London Whale news in 2012. Would not expect as much of an over-reaction on this news.
They've probably got that much buried in their collective sofas. Alternatively they could forsake a lap dance or possibly a line or two on a Friday night. Giving up the lap dance would be the most appropriate punishment seeing how we have all had a similar experience but not in a good way.
Kenny Polcari's Take "They ‘begged’ Dimon to purchase the assets of these failing banks, assisted him with some very generous terms, in order to save the system. I guess the only thing you could say is that JPM did not negotiate hard enough on the front end – essentially underestimating the legal risks." http://www.kennypolcari.com/2013/10/21/morning-thoughtsthe-march-continues-try-the-minestrone/
Update:JPM 10/22/2013 6:48 PM From Seeking Alpha Reuters: JPM settlement could cost closer to $9M JPMorgan's (JPM) preliminary $13B mortgage settlement with the U.S. government could end up costing the bank closer to $9B after taxes because the majority of the deal is expected to be tax deductible, Reuters reports.The $4B portion of the deal which will go toward aid for struggling mortgage borrowers is tax deductible, and most and possibly all of another $7B intended to compensate investors for shoddy mortgage securities they purchased likely is deductible, sources say.If $11B turns out to be tax deductible, and assuming a 38% tax rate, the tax deduction could save JPM as much as $4.1B; the government, however, could negotiate an exception, as Goldman Sachs found out in 2010 when its deal to pay $550M to the SEC specifically forbade it from deducting the portion of the settlement designed to compensate harmed investors.
Comments
It is a tad odd that they are selling their NYC HQ to a Chinese corporation. Their NYC HQ that apparently has a very large vault under it.
http://www.zerohedge.com/news/2013-10-18/chinas-largest-conglomerate-buys-building-houses-jpmorgans-gold-vault
"They ‘begged’ Dimon to purchase the assets of these failing banks, assisted him with some very generous terms, in order to save the system. I guess the only thing you could say is that JPM did not negotiate hard enough on the front end – essentially underestimating the legal risks."
http://www.kennypolcari.com/2013/10/21/morning-thoughtsthe-march-continues-try-the-minestrone/
Update:JPM 10/22/2013 6:48 PM From Seeking Alpha
Reuters: JPM settlement could cost closer to $9M
JPMorgan's (JPM) preliminary $13B mortgage settlement with the U.S. government could end up costing the bank closer to $9B after taxes because the majority of the deal is expected to be tax deductible, Reuters reports.The $4B portion of the deal which will go toward aid for struggling mortgage borrowers is tax deductible, and most and possibly all of another $7B intended to compensate investors for shoddy mortgage securities they purchased likely is deductible, sources say.If $11B turns out to be tax deductible, and assuming a 38% tax rate, the tax deduction could save JPM as much as $4.1B; the government, however, could negotiate an exception, as Goldman Sachs found out in 2010 when its deal to pay $550M to the SEC specifically forbade it from deducting the portion of the settlement designed to compensate harmed investors.