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Finance & Accounting
Pages 3 (753 words)
Banks and Stocks Table of Contents Introduction 3 Reasons for the loss of JP Morgan 3 Effect of the loss on industry and economy 4 Conclusion 5 References 6 Introduction JP Morgan Chase & Co. is known to be amongst the leaders in the financial services providing globally…
It generally concentrates on building up the innovative strategies to meet the requirements of its client’s daily and future needs. But recently JP Morgan Chase & Co. had suffered a “significant” loss amounting to $ 2 billion faced in the credit investments of portfolio, as stated in the New York Times on the news of 17th May, 2012. Within a week’s disclosure of the news JP Morgan Chase & Co. was stroked with another blow, i.e., another loss of at least $1 billion. The momentum of the loss of JP Morgan went high with the hedge funds and other investors taking an upper hand of the situation. The above crises lead to the faster deterioration of JP Morgan in the credit market. Reasons for the loss of JP Morgan JP Morgan did not disclosed the trade factors of the company in details which led to is competing investors and hedge fund dealers taking advantage of the situation. The loss of JP Morgan added up on the corporate index due to the steepening of the credit yield curve; thus matters got worse resulting in the mismatch of the expiration date of the securities enhancing further loss of the company. In the process of retrieving from the loss of $2 billion JP Morgan Chase and Co. sold its profitable securities worth $ 25 billion to increase its earning thus resulting in more soup and causing a further loss of $ 1 billion and more. ...
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