JP Morgan's Dimon: It's Been a 'Terrible' Quarter
You've got to give JP Morgan Chase & Co. (JPM) chief Jamie Dimon his due: the man is as straight a shooter as they come on Wall Street. But he sure knows how to clear a room. The JPM CEO commented yesterday on-air at CNBC that the firm he runs was having a "terrible" November and December, thanks to the "normal culprits" of mortgages and credit. JPM stock tanked 10 percent almost immediately on the news, and helped spark a much broader sell-off in the financial sector on Thursday. Bank of America Corp. (BAC) didn't help matters by confirming rumors that had been circulating for a week or so that it will lay off as many as 35,000 employees in the next few years. The Dow Jones Industrials closed Thursday at 8,565.09, down 2.24 percent on the day, as a result. Dimon did try to pump in some optimism during the interview. "We continue to grow," he said, according to CNBC. "Earnings themselves may go up or down, but if you continue to grow the franchise, you'll do in the long run a very good job." Dimon's straight talk has made headlines throughout this year; in July, he made waves for telling analysts on an earnings call that prime mortgages looked "terrible." So at least he's being consistent. On Dec. 1, JP Morgan announced it would be cutting 9,200 jobs at recently-acquired Washington Mutual. A company spokesperson said roughly 4,000 jobs will be cut by the end of January, with the rest coming before the end of 2009. Washington Mutual was seized by regulators on Sept. 26th, with its banking assets sold off to JPMorgan for just $1.9 billion; it represents the largest bank failure in U.S. history. The bank’s $231.1 billion loan portfolio at the end of Q2 included $52.9 billion in option ARMs and another $62.5 billion in home equity loans and lines of credit. Shares of JPM were at $28.15, down nearly 6 percent, in pre-market trading when this story was published. Write to Paul Jackson at email@example.com. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.