Tag Archives: loss

JP Morgan’s $2 Billion Loss Raising More Questions – Better Regulation Needed

JP Morgan’s news about a multi-billion dollar loss has crushed the banking industries revitalization and brought up more questions and the need for regulation. Jamie Dimon revealed a $2 Billion loss in JP Morgan’s Chief Investment Office. Obviously the bank got caught in the highly speculative segment of “synthetic” assets. Dimon explained that the net loss after off-setting other gains will amount somewhere around $800 million with potential to grow over the next couple of quarters.

The news has caused new uncertainty and has fueled new regulation supporter’s case. Indeed, regulation and government oversight are two major topics of this year’s election. The country’s economy has suffered a great deal in the aftermath of the financial crisis and continues to do so. JP Morgan’s blunder has not helped in making things better. It has to be seen what is unfolding in this case and what else is attached to it. Usually when things like this happen, someone else comes out of the bushes admitting the same misery.

Considering the damage such business practices cause for the economy and trust in the banking system, there is no way that the system can continue without serious regulation and oversight. Opponents of new regulations attempts to save the status quo now sound more like crying children complaining they can’t have more candy. This will clearly change the course of political campaigns of both parties in the coming election regarding regulation.

The banking industry has already major reputation problems and can hardly draw a positive opinion from Main Street America. Recent careful attempts of some major players to approach the problem and make things better are facing a complete reset with the newest developments. The immediate question for everyone is now, “what else is luring” and what else have people to endure. If there was any trust left or rebuild, it certainly didn’t get better.

JP Morgan Loss May Be Tip Of Iceberg – Bloomberg

JPMorgan Loses $2 Billion in Chief Investment Office – Bloomberg

JPMorgan Chase & Co. (JPM) Chief Executive Officer Jamie Dimon said the firm lost about $2 billion on synthetic credit securities after an “egregious’” failure in its chief investment office, which the bank says focuses on hedging.

“This portfolio has proven to be riskier, more volatile and less effective as an economic hedge than the firm previously believed,” the New York-based company said today in a quarterly securities filing. JPMorgan declined 5.5 percent to $38.50 in extended trading at 5:55 p.m. in New York...More

JPMorgan Loses $2 Billion in Chief Investment Office – Bloomberg.

This is a bad time for bankers to lose $2 Billion while speculating. Not that there is a good time to lose such an amount of money, but in an election year at hand and lots of regulation calls circulating all over the place, Dimon didn’t do the industry a good service. A lot of this case sounds very familiar and will raise some eyebrows with people on main street, especially since JP Morgan was always presented as the “smartest” bank in the country.

Do Soccer Clubs Need Shrinks To Protect Their Assets?

The Barclay’s English Premier League is in its last rounds before the champion of the 2011/2012 season is found. Naturally, the fight for glory or to avoid relegation is fierce, and takes everything that the players, managers and clubs have to offer. Very often the fight on the pitch is brought off the pitch by all involved and intensifies the struggle.

Currently, Manchester City is the club that has problems that have been created off the pitch or due to individual weakness and lack of knowledge. In city’s case, Carlos Tevez and Mario Balotelli have held the club in the news on a daily basis not because they are awesome soccer players, but for all kind of other negative reasons that make your manager, the club and the business partners of the club have nightmares.

Every time such a nightmare situation arises, millions of dollars are at stake. In city’s case, the damage could go into the ten’s or hundred’s of millions. For a club that has spent way over $400 million in new players and delivered a $140 million loss last year, this is certainly a nightmare. Not that city is poor, their ownership pays for “city expenses” out of the change drawer, but nobody is happy to lose that kind of money if it can be avoided. Clearly, this is not the way how the ownership of the club became that rich.

Let’s talk about Mario Balotelli: The guy is 21 years old and is a sensational soccer talent. Nobody in the soccer world will dispute that. He makes $320,000 a week(!), all-in-all somewhere between $15 and $20 million a year and has no clue about what kind of nonsense he delivers. For himself, he believes he is the coolest guy since mankind. To mention some examples of his performance: Almost burned down his mansion by firing fireworks out of the bathroom window, parking tickets of over $10,000 in less than two years, visiting a strip club hours before the game, featured in an article about the hooker that already gave Wayne Rooney a headache, 4 red cards in less than two years and many other actions in full disrespect of himself, his family and everyone else around him.

Balotelli has a personal manager. This guy is negotiating contracts for him and makes sure he stays interesting in the soccer world. Obviously, he has no clue on how Balotelli’s actions influence his marketability or he doesn’t care as long as he gets his commissions and paychecks.

Balotelli has quite a few assets that are very marketable and could make him a real big gun, right now and way beyond his soccer career. All it would take is some minimal professionalism on the job and in public. If one would express the $ damage to himself, the loss is in the 100’s of millions over the next 40 years, clearly. It is a mystery why his manager and his family are not taking influence on this guy and try to help him. It is clear that Balotelli himself is unable to do so.

For the club the losses are much greater. $100 million can be lost in one season and looking at city’s season, that is exactly what is going to happen. Early exit from the European Championships, FA Cup and Carling Cup, and playing only second fiddle to Manchester United will cost the club way more than a $100 million. Selling Balotelli? Well, that would only go hand in hand with a huge transfer loss at this time and would make things worse for the club. The example Carlos Tevez has proven that fact and so city will go on and hope and pray Balotelli, and Tevez, will learn a lesson, somehow. Continue reading

Banks and their efforts to do nothing for their Image and Brand.

I am following the news on a daily basis. Business, Politics, Marketing, Social Media, PR, Soccer and a few other topics are on the table every day. You might think this is a lot to cover, I am lucky, it is my job, it is my hobby and it is what I like to do when I have time. Information addicted, news junkie and such I have been called. Anyway. Continue reading

Arsenal’s desire for a Title! Empty handed again?

Last Sunday’s loss against Birmingham City in the Carling Cup final is just another blow in Arsenal’s attempt to end a five year drought and period without glory and silverware. Optimists could say, well, one down, three more to go. Meaning, there are still three competitions left and Arsenal is in all of them. Yes, that’s true, however, taking a closer look, they could very well lose all opportunities in a very short period of time. Today, the replay of the 5th round FA-Cup against Leyton-Orient should not be a problem, shouldn’t it? We have seen more unlikely things to happen, everything is possible. Fabregas out, Walcott and van Persie out is not necessarily in support of Arsenal trying to beat the underdog. Those cup competitions have their issues. It is, however, expected that the Gunners make it into the next round. Guess who is waiting? Manchester United at Old Trafford! Two down, two more to go?

The next blow could happen next week in the Champions League in Barcelona. Lionel Messi and his friends are eager for a pay-back for the 1st leg loss at the Emirates. And, realistically, how good are Arsenal’s chances to survive in Camp Nou? Fabregas far from being fit and questionable for that game, so are Theo Walcott and van Persie. In my opinion, these are important players and without those cornerstones it is going to be difficult, to say the least. It can very well be three down, one more to go, right?

In the Barclay’s English Premier League the Gunners rank second. Fighting to catch up with Manchester United for the place on top and winning the championship in the Premier League. While doing so, they also have to deal with the hungry folks from Manchester City and, now again, Chelsea. A crisis, caused by injury or lost moral and confidence, can have fatal consequences for the Gunners up to losing Champions League qualification. Four down, nothing left, except empty hands, again?

Gunners supporters will call this scenario pessimistic, and it might be. From today’s view, all of this can very well happen. Soccer has a few dynamics that just can’t be controlled. Right now is a time when only the old soccer rule “eat or die” must be considered, even for a team like Arsenal. The season, all competitions, are in the last quarter and now you need to be able to bite and overcome obstacles. Arsenal has quite a few to overcome.