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Reggie Middleton on JP Morgan's "Blowout" Q4-09 Results

By Implode-Explode Heavy Industries

``We looked into acquired portfolio of Wamu and as analyzed in the forensic report, owing to continuous deterioration in the credit quality, the acquisition is proving to be a bad deal for JPM. Exactly one year ago, I accused JP Morgan of taking unrealistic marks on the WaMu portfolio, see Is JP Morgan Taking Realistic Marks on its WaMu Portfolio Purchase? Doubtful!. It appears as if I was right on the mark, despite management proclaiming that the loss trend on those loans are going as expected. If that was the case, why is the discount and loss buffer already eaten through to provide material net losses - just one year after the purchase??? The Alt-A/Option ARM/HELOC pain has yet to really hit, and JPM is already in the red by about 5% on this deal and they bought it at a 25% discount!''

Full post as published by Mortgage Lender Implode-o-Meter on January 19, 2010 (boomark / email).