JP Morgan Writedown Signals More To Come

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Was JP Morgan's $1.5 billion writedown driven by Merrill Lynch? That's what JP Morgan told Financial Times this morning.
"They said the writedowns were partly driven by Merrill Lynch's decision to sell $6.7bn in toxic securities to Lone Star funds, the distressed debt investor, for just 22 cents on the dollar," Francesco Guerrera writes.
This is prompting speculation that other financial companies will be forced to make further writedowns on their holdings similar securities. July is said to have been the worst month yet for mortgage backed securities. Of course, we can already here the chorus of voices that will tell us that July proves we've finally reached a bottom, written down everything but the kitchen sink. Never mind that we've been hearing that since last autumn. The kitchen sink, we hate to remind you, is the device that contains the drain.

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