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Tags: times | jpmorgan | media | bias

Don't Go Through the Dangerous Jungle With a Blind Tour Guide

By    |   Friday, 29 June 2012 07:48 AM

George Soros has said that economic history is a never-ending series of episodes based on falsehoods and lies, not truths. It represents the path to big money. The object is to recognize the trend whose premise is false, ride that trend and step off before it is discredited.

Now perhaps you don’t like Soros’ political views but he is one of the greatest investors of all time and understands the deception and lies and how to benefit from them

The New York Times reported that JPMorgan’s losses could total $9 billion. The stock dropped more than 5 percent in wake of the news.

Editor's Note: Small-Town Ohio Accountant Uses Simple Forgotten Secret to Help Investors Pocket Millions

I don’t know exactly how much JPMorgan lost on this trade but I thought the Times article was very misleading.

In the first paragraph, it says "losses on JPMorgan Chase’s bungled trade could total as much as $9 billion, far exceeding earlier public estimates, according to people who have been briefed on the situation."

The key word is "could." A pig could fly over your house tomorrow and land in your backyard but I wouldn't plan to have any "free bacon" for breakfast anytime soon.

Of course, this is similar to supermarket tabloids which use outlandish headlines to get attention and then quote “unnamed sources” who make unproven claims.

Legal but not very noteworthy

I won't bore with the rest of the Times article. It just talks about how dumb this huge unprofitable trade was and how much money JPMorgan is losing by "unwinding" the trade.

But one paragraph says: "With much of the most volatile slice of the position sold, however, regulators are unsure how deep the reported losses will eventually be. Some expect that the red ink will not exceed $6 billion to $7 billion."

The headline was that the JPMorgan loss may reach $9 billion.

Why wasn't the $6 billion to $7 billion in the headline?

Many media outlets overlooked the missteps of the Obama administration, which unwisely guaranteed a $535 million loan to Solyndra, which then lost all of the taxpayers’ money when the solar-energy company went bankrupt in September 2011.

Or how what about the auto-industry bailout?

According to the TARP inspector general's April 25 report, U.S. taxpayers have received cash and securities worth $50.9 billion on the $79.7 billion extended to General Motors, General Motors Acceptance Corp. (now Ally Financial) and Chrysler. That is a $28.8 billion loss.

On the other hand, JPMorgan didn’t need TARP and was forced to take $25 billion. JPMorgan not only paid it back as soon as it was allowed to, but paid interest and warrants back to the government.

It is all about the media promoting a certain political agenda, in my opinion.

Which is a newspaper’s right. I also have the same right to point out misleading, biased and inaccurate reporting.

Editor's Note: Small-Town Ohio Accountant Uses Simple Forgotten Secret to Help Investors Pocket Millions

JPMorgan CEO Jamie Dimon has been outspoken about how the Dodd-Frank Act is unfair to U.S. banks and has given them a disadvantage over foreign banks.

What better way to advance your agenda by demonizing him publicly and scaring his shareholders.

The Times later stated: “Essentially, JPMorgan has been operating a hedge fund with federal insured deposits within a bank,” said Mark Williams, a professor of finance at Boston University. The Times said a JPMorgan spokesman declined to comment.

That is a blatant misstatement. JPMorgan and that particular trading department have made large profits in the past three years hedging the bank’s massive loan portfolio. The $2 billion loss represents less than 1 percent of its total portfolio of $250 billion

At no time were taxpayer funds ever at risk.

But why let the facts interfere with a good story.

I knew that the headline was dishonest and by the day's end, I wasn’t surprised that JPMorgan stock had rebounded almost 3 percent off its low.

My newsletter, The Dividend Machine, was No. 1 in performance of 19.7 percent, which was top-rated in this risk category by Hulbert Financial Digest, a Dow Jones-owned company, because I understand how to separate fact from fiction and bias.

If you invest your hard-earned money and aren’t able to distinguish fact from fantasy, please find someone who can.

About the Author: Bill Spetrino

Bill Spetrino is a member of the Moneynews Financial Brain Trust. Click Here to read more of his articles. He is also the editor of the Dividend Machine. Discover more by Clicking Here Now.

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Friday, 29 June 2012 07:48 AM
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