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JP Morgan's $2 billion loss

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  • Description

    Matt McCall discusses JP Morgan's loss of $2 billion in the markets and more business news of the day.

  • Duration 5:50
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-- -- -- -- go now to what is going to be a weekly segment with the dashing and handsome -- -- -- Matt good to have any upgraded -- and that of course as you know is president of the president is that right.

Let them read president of the United States -- different president and financial I would like that -- -- -- I think I -- them but you're better off way you'll believe me.

That is president of Penn financial group great financial expert and I would wanna take a look every Friday -- what's been going on the in the -- in the world of business and economics -- map it looks.

What's been did the big issues this week now.

Like -- couple issues yesterday three big things that happened but actually to bigger things happen since we did at -- -- -- -- in their religious or so.

Last -- JPMorgan royal large national banks came out.

And they said there are taking -- two billion dollar loss just over the last couple of weeks two billion with a billion with a B.

Because they trading strategy basically they've made a bad trade and lost two billion dollars -- it.

What's important about this is by the fact that he lost money banks make billions -- lose billions all the time it's just not reported.

So what happened with JPMorgan is is that what's called hedging you -- basically they're buying and selling different types of securities to not lose money this over the toll double this -- this with a lot -- money.

They lost two billion dollar they don't lose their jobs.

Yes that G Jamie Dimon the CEO of -- -- -- basic came out and said listen people are gonna lose jobs are gonna make major changes but he flat out said last night.

We made a mistake there's nothing else to do what the market is nobody else to blame we made a mistake and -- it's a big two billion dollars to do good on our visit to to have any practical implications -- that customers.

-- the other but the customers but I think.

For the major banks what's gonna happen is -- have what's called the vocal rules came out after the financial collapse which makes it tougher for banks to trade it within -- own accounts.

This is -- a bit more pressure on the government to come after these banks and break up these banks to senators and the last week.

One came out and said based only be so big after that they can't grow anymore which.

It's defeats the everything about capitalism another person came out of that guy another very similar rule that they wanna pass the saying oh no no more to -- the field I think breaking up these banks so.

If these are breaking up banks -- -- stocks -- in fact the S&P 500.

For anybody that's has invested a forward -- it will have implications this is just a first step and I think that the administration continues down the road they're going to miss you like big banks have broken up right what else -- -- also we had come out this week we had Europe.

But last weekend we have -- elections -- -- be elections in France.

Didn't go the way the market wanted -- to -- Now I have re edited -- basically all the parties and candidates in the in the case of fronts president Sarkozy.

And in the case of Greece a couple of parties that all supported the austerity measures kicked out of office -- what does that mean so -- That means there's a big debate going on right now on Wall Street and around the world is austerity good or is that not good and -- means basically -- -- frivolously which the governments have been doing for decades.

So the new governments are coming into these two countries.

They say no no we don't need austerity we need to keep spinning it evidence with a market didn't like that because -- -- the debts are ready so high so they downgraded some of the dead of Sony's European countries market got crushed on Monday.

But -- slowly came back perhaps throughout the week and it's actually not as bad but it's something we need to watch your what drives the the US -- that.

So I've just got told the jury -- -- abuse riding in here how does Mac feel Greece is gonna affect the market in the longer run and have as the severing of the Franco German -- with it.

And actually seven but it's a young girl -- -- -- was.

How I had -- -- bailing out Europe how is that gonna affect us here.

I don't think -- is gonna have major effect and US and a lot of us in price -- that -- Greece basically almost the fault that are ready and it might default might pull of the EU let us prices baked into the cake.

What's not big it is France Spain with unemployment well above 20% they have issues Italy has issues as well if if it -- these larger European countries.

That and have major effects -- I mean -- look at JPMorgan a lot of losses apple it hasn't come out yet but I believe it when it comes out our meet tied to a lot of debt.

Basing your -- what's going on so.

Lot of major banks a lot of major corporations McDonald's -- you name it.

Large portion of sales come from Europe right so -- -- suddenly you're goes back into the double dip recession which many and I guess apple has been digital rights -- greatly episode he exports dropped to hurt than usually people -- the United States that -- its -- down.

What goes on in France and Spain Italy that both you don't care about affects you and I really that's interesting.

All right Imus did jump and ahead because we're running out of time -- -- what do we look forward to next week -- sell one of the things that people should be keeping their eyes a few things what I just talked but more EU physically tonight what's gonna happen with European Union.

But a lot of good retail a lot of good economic numbers coming out we've retail sales which surprised -- this morning consumer sentiment.

Came into best level for years it's more really blows my mind at the same time at the end of April we've had the largest amount of shorts meaning people betting against the market New York Stock Exchange.

In almost a year that -- -- the big money saying you know what we're in trouble when you and I are out there's been a money what you would have -- you know buying bottles of wine and whatnot.

So next week we find our retail so you and I'm dying alone -- -- unfortunately yes we have housing starts next week we -- the CPI which is inflation.

Just on the Philly Fed which shows.

Economic activity in Philadelphia regions are usually good gauge for that the United States -- a lot of good numbers next week that's gonna move the market but it comes down to.

I think JPMorgan carry over and what happens in Europe -- right at the market do today we don't have another -- -- we're actually up today we're we're up about -- percent eight weeks we moved down really big last night after JPMorgan -- we've since gone up and a lot of banks have actually turned Green -- looking good so.

That's always a good sign if we can rally on bad news that tells you that there's some good resilience in this markets -- continued to fire.

There it is -- to up 22 what a fabulous note to end on the map would call an optimistic -- that's great to see had -- President of the -- financial group he will be here every Friday to give us an update on what has happened in the business -- -- want to look forward to what you need to know to make the most of your money.

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