Tuesday, August 12, 2008

More JPMorgan Writedowns

JPMorgan Chase incurred losses of about $1.5 billion since July, according to the bank.

JPM said trading conditions have "substantially deteriorated" in the third quarter compared with that of the second, and spreads on mortgage-backed securities and loans have "sharply widened"

JPM was forced to write down the value of its $33 billion in mortgage-backed securities as prices continued to drop in July, according to FT.

As of June 30, JPMorgan held an aggregate $19.5 billion of prime and Alt-A mortgage exposure, $1.9 billion of subprime mortgage exposure, and $11.6 billion of commercial mortgage-backed securities (CMBS) exposure, a recent filing showed.

"These mortgage exposures could be adversely affected by worsening market conditions, further deterioration in the housing market and market activity reflecting distressed sellers," the company said.

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