Interest Rate Roundup

Tuesday, August 12, 2008

What's $1.5 billion among friends?

I don't know about you, but I've become so inured to gazillion-dollar write-downs and credit losses, that I hesitate to even lift an eyebrow at $1.5 billion. But that's the amount of additional write downs on mortgage-backed assets that JPMorgan Chase said it's facing. The problem? Since the June quarter closed, market conditions "have substantially deteriorated" according to a JPMorgan regulatory filing. A few other details from a Reuters report on the filing:

"In the August 11 filing, JPMorgan said that it expects continued deterioration in credit trends for its consumer portfolios, and that this will likely require additions to the consumer loan loss allowance during the rest of 2008.

"Quarterly net charge-offs in the home equity portfolio could continue to increase for the rest of 2008, the company said.

"Prime and subprime mortgage net charge-offs were likely to continue to rise "significantly" in the second half of 2008, with deterioration expected to continue into 2009, JPMorgan said."


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