JPMorgan Chase’s multi-billion dollar trading blunder dragged down bank stocks Friday, undermining investor confidence in other Wall Street finance firms.
JPMorgan (, Fortune 500) led the bank stock declines, with its stock dropping nearly 9%.
The bank revealed Thursday, after the close of markets, that it suffered trading losses of $2 billion since the start of April.
The problems affected other major bank stocks. Morgan Stanley (, Fortune 500), Citigroup (, Fortune 500) and Goldman Sachs (, Fortune 500) fell about 4%. Bank of America (, Fortune 500) declined less than 2% and Wells Fargo (, Fortune 500) managed to eke out modest gains, recovering from earlier losses.
JPMorgan suffers massive trading loss
"The problem is that there’s going to be a massive backlash," said Christopher Wheeler, bank analyst for Mediobanca in London.
Wheeler mentioned that the debacle was unfolding amid an ongoing debate over the Volcker Rule, which limits banks on investing with their money.
"The regulators are going to have a field day," he said guaranteed online personal loans.
Bank stocks were already under siege. The KBW () index of bank stocks has fallen 1.7% over the last five trading sessions, without even showing the impact of JPMorgan’s bad trade. On Friday, the index was down about 1%.
Who is the White Whale?
The trade prompted an unusual impromptu teleconference with Chief Executive Jamie Dimon and analysts, at which he divulged that net losses could exceed $800 million by the end of the second quarter for the company’s corporate unit. Before that announcement, a net gain of $200 million was forecast for the unit.
Dimon told analysts that the losing trades were the result of "sloppiness" and "bad judgment," but he shrugged off a question about whether other banks were affected.
"Just because we’re stupid doesn’t mean everyone else was," said Dimon on the call.
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The Wendy’s Co. returned to a first-quarter profit as it recorded a large gain on the sale of an investment.
The casual dining chain reported net income of $12.4 million, or 3 cents per share for the period ended April 1. That compares with a loss of $1.4 million, or breakeven results, a year ago.
Excluding items, earnings were 1 cent per share. Analysts expected earnings of 3 cents per share.
Revenue rose 2 percent to $593.2 million. That missed Wall Street’s estimate of $608.1 million.
Its shares fell 22 cents, or 4.5 percent, to $4.65 in premarket trading.
Company-run restaurant margin fell due to increased commodity costs, particularly for fresh beef.
The Dublin, Ohio company cut its 2012 earnings forecast mostly because of weaker-than-expected sales and the company-run restaurant margin.
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Ukan Nang Ati, 48, used to scrape a living growing opium in the isolated countryside behind the village of Kyauk Ka Chan in Myanmar
Just because you’re dead doesn’t mean you can’t be robbed.
Identity thieves steal the personal information of about 2.4 million deceased Americans each year, according to a new report from fraud prevention firm ID Analytics. That amounts to a rate of more than 2,000 thefts per day.
Using these stolen identities, criminals typically apply for credit cards, cell phones and anything else requiring a credit check, the report found.
About 800,000 deceased Americans get their identities stolen intentionally, and another 1.6 million identities are stolen by chance — when an identity thief uses a Social Security number that happens to match that of a deceased individual, for example.
Debt after death: Banks chase down mourners
Lenders are typically the main victims when thieves use identities of deceased people to apply for credit products. But surviving family members should also be careful, said Stephen Coggeshall, chief technology officer at ID Analytics bad credit personal loan lenders.
"Surviving family members can also be the victims of this identity fraud as they are left to manage the estates of their deceased loved ones," he said. "It’s important for people to monitor their deceased family member’s identities for at least one year."
Social Security pays millions to dead people
To determine how many deceased people get their identities stolen each year, ID Analytics collected the names, dates of birth and Social Security numbers on 100 million credit applications.
It then calculated how many of these applications used information that was associated with deceased individuals listed in the Social Security Administration’s Death Master File — a government database of deceased Americans.
Senate Republicans are trying an unusual tactic to nullify new labor regulations that would speed up the time frame for unions to hold workplace elections.
The Senate will vote Tuesday on a rarely invoked measure, known as a resolution of disapproval, to overturn rules approved last year by the National Labor Relations Board.
Though the measure has little chance of passage _ it also faces a White House veto threat _ the vote forces Democrats in tough elections to take a stand on rules that have won praise from unions and sharp rebukes from business groups.
The rules simplify procedures and reduce legal delays that can hold up union elections after employees at a work site gather enough signatures to hold a unionization vote. They are set to take effect on April 30.
Unions call the changes a modest fix that would limit corporate stalling tactics, where litigation can delay elections while workers are can be subject to harassment, threats and even illegal firing.
During debate Monday, Republicans claimed the new rules would lead to “ambush” elections that barely leave company managers enough time to respond or counsel against forming a union.
“The NLRB has chosen to impose new rules to aid big labor at the expense of employees, small business employers and the jobs they would create,” said Sen. Mike Enzi of Wyoming, top Republican on the Senate Health, Education, Labor and Pensions Committee.
Sen. Tom Harkin, D-Iowa, called the vote “the latest chapter in an unprecedented Republican assault on unions.” Harkin, who chairs the Senate committee overseeing labor, said employers “have ample opportunity to express their views” on unions.
Business groups including the U.S. Chamber of Commerce and the National Association of Manufacturers have designated the vote a “key vote” _ used to score members of Congress each year on their records. The AFL-CIO has also aggressively lobbied lawmakers to vote against the measure.
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British police say a 51-year-old man has been arrested on suspicion of intimidating a witness and encouraging or assisting an offense in relation to the phone-hacking scandal.
Scotland Yard says the man was arrested at a central London police station Wednesday afternoon by officers investigating voicemail hacking by tabloid reporters.
The force says the man was previously arrested in April on suspicion of conspiring to intercept communications and unlawful interception of voicemails. The police did not name the suspect.
The new arrest follows the arrests Tuesday of six other suspects, including former News International executive Rebekah Brooks.
Salaries of 70 Fannie Mae and Freddie Mac executives will be limited to $500,000 per year and their annual bonuses eliminated amid pressure from Congress to stop the big payouts.
The pay and bonus structure of the government-controlled mortgage giants came under fire this fall after it was revealed that 12 executives got $35.4 million in salary and bonuses in 2009 and 2010. Fannie’s chief executive, Michael J. Williams, received about $9.3 million for the two years. Freddie’s chief executive, Edward Haldeman Jr payday advance low fees., was paid $7.8 million.
The government rescued Fannie and Freddie three years ago after they nearly folded because of big losses on risky mortgages. Taxpayers have spent about $170 billion to prop up the two companies, the most expensive bailout of the 2008 financial crisis.
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