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from Breakingviews:

BofA loss provides valuable mega-bank perspective

By Antony Currie

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Anemic results underscore how little fun it is to run a mega-bank these days. A $276 million loss from Bank of America announced on Wednesday, however, at least provides some valuable perspective.

The bank led by Brian Moynihan was already expected to report a pretty low number because of its earlier flagged $3.6 billion mortgage settlement with Fannie Mae and Freddie Mac’s regulator. What socked shareholders in the gut, though, was a surprise $2.4 billion addition to reserves. BofA took the step after deciding the amount it may have to pay out on lawsuits and other mortgage issues went up in the first three months of the year.

Penalty inflation has become a growing concern. Even so, much of the worst news at rival banks, not least JPMorgan’s $13 billion settlement, came out before the end of 2013. That suggests BofA has been tardy in reevaluating its own exposures.

from Breakingviews:

JPMorgan’s clean sheet already looks off-white

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By Jeffrey Goldfarb

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

JPMorgan’s clean sheet already looks off-white. For the first time in years, its quarterly earnings weren’t cluttered with special items like whale-trade losses or legal costs. The U.S. mega-bank’s $5.3 billion profit in the three months to March fell short of expectations anyway.

from Breakingviews:

Jamie Dimon hits final stage of grief: acceptance

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By Rob Cox
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

In coping with the tragedy of the financial crisis, no Wall Street executive has exhibited the five stages of grief like Jamie Dimon. The JPMorgan chief executive has passed through phases of denial, anger, bargaining and depression. His latest annual letter to shareholders finally shows a desire to accept what’s happened and move on.

from Breakingviews:

Blythe Masters could chair Glencore

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By Christopher Hughes
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Blythe Masters’ exit from JPMorgan with the sale of its physical commodities business could solve Glencore’s longstanding search for a chairman. The brains behind the credit default swap has the expertise to join the trading house’s board, whose all-male roll makes it an anachronism in the FTSE-100. But there is one big obstacle to her leading this or any board – she has never run a company before.

from Breakingviews:

Dimon deputy epitomizes succession of all sorts

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By Antony Currie
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Jamie Dimon’s loss of a top deputy on Tuesday epitomizes succession issues of all sorts. Key lieutenant Mike Cavanagh has given up a shot at following his mentor atop JPMorgan for one helping run private equity firm Carlyle Group. The move shakes up leadership plans for both companies and also underscores a bigger shift in finance.

from Breakingviews:

JPMorgan commodities sale shows trading’s opacity

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By Kevin Allison and Antony Currie

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

JPMorgan’s $3.5 billion sale of its physical commodities business is a perfect example of just how opaque trading is. The bank is selling what is probably a low-return business with regulatory headaches to Mercuria, a privately held firm that does not have to make its financials public. The dearth of details does make it hard to judge, but applying some statistics from both the industry and some rivals suggests Mercuria may be paying top whack.

from Breakingviews:

Chris Christie grapples with his inner Jamie Dimon

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By Jeffrey Goldfarb
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Jamie Dimon’s tale of woe is proving an uncanny inspiration to the governor of the U.S. state of New Jersey. Chris Christie, who is also considered an early front-runner for the 2016 Republican presidential nominee, followed his own “tempest in a teapot” moment with a mea culpa on Thursday for his team’s behavior over a traffic scandal. Christie even has an Ina Drew to blame. Like Dimon, the Garden State’s chief executive needs to own up to a culture he engendered.

from Global Investing:

Market cap of EM debt indices still rising

It wasn't a good year for emerging market bonds, with all three main debt benchmarks posting negative returns for the first time since 2008. But the benchmark indices run by JPMorgan nevertheless saw a modest increase in market capitalisation, and assets of the funds that benchmark to these indices also rose.

JPMorgan says its index family -- comprising EMBI Global dollar bond indices, the CEMBI group listing corporate debt and the GBI-EM index of local currency emerging bonds -- ended 2013 with a combined market cap of $2.8 trillion, a 2 percent increase from end-2012. Take a look at the following graphic which shows the rise in the market cap since 2001:

from Alison Frankel:

FHLB demands DOJ draft complaint: ‘What is JPMorgan trying to hide?’

If JPMorgan Chase and the Justice Department thought that all the zeroes at the end of the bank's multibillion-dollar settlement for mortgage securitization failures would foreclose questions about the bank's actual wrongdoing, clearly they thought wrong. Days after the much-leaked-about $13 billion deal was finally announced, New York Times columnist Gretchen Morgenson looked at the admissions accompanying the settlement and wondered why it had taken the federal government so long to hold the bank accountable for conduct that's been in the public domain for years. Morgenson's column echoed posts at Bloomberg and Slate that also scoffed at JPMorgan "admissions." On Monday, even a commissioner of the Securities and Exchange Commission piled on. Dan Gallagher, a Republican, criticized the settlement as a penalty on the bank's current shareholders that's not justified by JPMorgan's admitted conduct. "It is not rational," Gallagher told an audience in Frankfurt at an event organized by the American Chamber of Commerce in Germany.

At the heart of all of this criticism is a nagging suspicion that we don't really know what the Justice Department had - or didn't have - on JPMorgan, that the $13 billion settlement was not pegged to the bank's actual misconduct but to the public relations benefits to both sides from a supposedly record-setting deal. Attorney General Eric Holder has called the size of the settlement a proportionate response to JPMorgan's wrongdoing, but it's tough to take that assertion on faith when the statement of facts that accompanied the settlement revealed so little about the government's evidence.

from Global Investing:

Red year for emerging bonds

What a dire year for emerging debt. According to JPMorgan, which runs the most widely run emerging bond indices, 2013 is likely to be the first year since 2008 that all three main emerging bond benchmarks end the year in the red.

So far this year, the bank's EMBIG index of sovereign dollar bonds is down around 7 percent while local debt has fared even worse, with losses of around 8.5 percent, heading for only the third year of negative return since inception. JPMorgan's CEMBI index of emerging market corporate bonds is down 2 percent for the year.

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