JPMorgan Reveals $2 Billion Trading Loss
The chief executive of JPMorgan Chase — America's largest bank — revealed Thursday that the bank recently lost $2 billion in the same complex, risky trades that helped bring on the 2008 financial crisis.
Jamie Dimon called the bank's actions an “egregious mistake” and embarrassing.
Shares in JPMorgan fell nearly 7 percent in late trading Thursday. Other bank shares were also sharply lower.
The complex trades by JPMorgan, known as hedge funds, act like an insurance policy so investors are protected if the market loses value. But recent rises and drops in stock market led to losses.
JPMorgan had previously avoided such risky investments, allowing it to emerge from the 2008 financial crisis relatively unscathed.
In better economic news, the United States has posted its first budget surplus in almost four years.
The Treasury Department said Thursday the country took in more money last month than it spent for the first time since September 2008, just before the recession.
Americans pay their yearly taxes in April, so an increase in revenue is not unusual. The country is also expected to post another trillion-dollar deficit this year. Some economists believe the first surplus in nearly four years is a sign the U.S. economy may be coming back to life.
The government also said Thursday that the U.S. trade gap widened in March, with the country importing more goods than it exported.
It says the $52-billion increase in the trade deficit is a 14 percent jump over February.
Officials cite higher prices for imported oil and a greater demand for foreign-built computers, cars, televisions, cell phones and clothes. U.S. trade with China accounted for about 40 percent of the overall American shortfall.
In a separate report, the government said the number of first-time claims for jobless benefits was slightly lower last week from the prior week. Analysts said the level of initial claims for unemployment compensation signals that the U.S. is poised for modest job growth.
The U.S. jobless rate dipped in April to 8.1 percent, but partly because some people out of work stopped looking for jobs and were not counted in the monthly employment survey.
World markets recover from stumble over Europe elections
Stock markets recovered around the world following an early stumble caused by election results in France and Greece that appeared to jeopardise Europe’s plans for fighting its debt crisis. Greek voters over the weekend punished mainstream politicians who had backed cost-cutting plans demanded by the country’s international lenders, leaving the country without clear leadership. In France, President Nicolas Sarkozy was thrown out in favor of Socialist Francois Hollande, who pledged “to finish with austerity.” Investors on yesterday worried that the shifting political landscape in Europe could undermine the region’s long battle to keep its shared currency intact and restore the faith of global investors.
European markets slumped early on, but closed higher after worries about the political changes dissipated and investors focused on Hollande’s pledges to encourage economic growth. Investors were also relieved after Spain announced a plan to present measures this week to support the country’s ailing banks. Prime Minister Mariano Rajoy said he would not rule out lending or injecting public money into the country’s financial system.
Stocks rose sharply in Spain, ending up 2.7 per cent. France’s main index gained 1.7 per cent. The euro also recovered ground it lost against the dollar. In the US, the Dow Jones industrial average fell as much as 68 points in early trading, but recouped its losses and even gained ten points by the afternoon. The Dow finished the day down 29.74 points, or 0.2 per cent, at 13,008.53. The Standard & Poor’s 500 also started the day lower but ended up 0.48 points at 1,369.58. The Nasdaq composite index rose 1.4 points to 2,957.76. The election results in Europe showed that voters were rejecting the extreme belt-tightening required by international bailouts and favored by Germany’s leadership.Investors are waiting hear the newly-elected leaders articulate their visions for how to deal with the euro zone’s debt crisis, which is why there is a muted reaction from stock markets, according Kim Caughey-Forrest, equity research analyst at investment firm Fox Pitt Capital Group. “There is no reason to cry until you get hurt,” said Caughey-Forrest.
Initially, traders also bought up ultra-safe US Treasurys overnight when stock markets in Europe were falling. That pushed the yield on the ten-year note as low as 1.83 per cent early yesterday morning, a level it hadn’t reached since early February. However, the yield rebounded to 1.88 per cent in late trading, the same level it was at late Friday. Earlier in Asia, Japan’s Nikkei index plunged 2.8 per cent to its lowest finish in three months. In addition to Europe’s elections, it was also the first time for investors in Asia to reacted to a weak jobs report Friday in the US. Hong Kong’s benchmark Hang Seng index slid 2.6 per cent.
(AP)
Protests in Guinea Turn Violent
Police in Guinea have used tear gas and batons to disperse protesters demanding the government open talks with the opposition about the organization of the long-delayed legislative elections.
A VOA reporter said clashes between police and demonstrators took place Thursday as the crowd tried to gather for a march to a stadium in the capital, Conakry.
The reporter said the protesters were also attacked by youths who support President Alpha Conde.
At least 15 people were reported injured.
Elections were scheduled for July 8, but President Conde postponed them last month, citing technical problems with the voter registration system. The protesters are calling for the electoral commission to be reorganized and for the voter list to be audited.
Guinea's last legislative elections took place in June 2002, during the rule of President Lansana Conte.
The European Union, which cut off aid to Guinea after a 2008 military coup, has said the polls must be held before it fully resumes its aid programs.
Guinean opposition parties are demanding an audit of the voter rolls and changes in the country's electoral commission, which they say favors the ruling party.
President Conde was elected in 2010, during Guinea's first free and fair presidential election since independence in 1958.
US oil prices lower, further declines expected
Brent crude continued its descent, falling by 18 cents per barrel to US$113.02 yesterday. But benchmark US oil rose slightly, adding 42 cents to US$97.23. Analysts say oil prices should keep falling this summer if supplies grow as expected. OPEC increased oil production by 320,000 barrels per day in April, according to Platts, the energy-information arm of McGraw-Hill Cos. OPEC’s biggest producer, Saudi Arabia, plans to crank up production even further in an effort to push oil prices lower. Declining oil prices could take some pressure off a world economy that’s struggling to grow. Already, the decline in US gasoline prices over the past month amounts to a savings of about US$2 to US$3 per fill-up. That’s enough to cut American gasoline spending by US$73.1 million per day.
Meanwhile, the price of natural gas increased by 3.6 cents to US$2.503 per 1,000 cubic feet, the highest since the end of February. Natural gas prices have rebounded from ten-year lows as the industry shuts down production operations across the country. US supplies still climbed last week, according to the government’s latest report. But the increase was smaller than analysts expected. “Producers are finally pulling back” on production, independent trader and analyst Stephen Schork said. “It’s making a difference.” In other futures trading, heating oil lost 1.14 cents to US$2.9877 per gallon and wholesale gasoline fell by nearly a penny to US$3.0169 per gallon.
(AP)
Gov’t tables $612b budget
Finance Minister Dr Peter Phillips has tabled a $612 billion budget for the 2012-2013 fiscal year.
This is $76 billion or approximately 14 per cent more than the $536 billion which was allocated for expenditure last year.
The budget includes projected spending of $375 billion on recurrent expenses which includes items such as salaries, utilities and interest payments on government loans.
On the capital side of the budget the government plans to spend $237 billion this year, a $53 billion increase or 29 per cent more than last year.
The Finance Minister will tell the country how he will finance the Budget on Thursday May 24.
TCI Softball
Saturday was another great day of Fast Pitch Softball at the down town ballpark in Providenciales, where the defending Champs was beaten with the 10 (Ten) run rule: Silver Deep Cruises lost to the Lady Panthers 12 while in the second game Kischo 6 defeated CBS Tigers 10. The young 16 yrs old pitcher from Clement Howell High School playing for the ladies Panthers team struck out 8 persons and only allowed one hit and one walk.
Truly it was something to behold said Godfrey Been to his amazement...he told RTC Sports that if there are more like this young lady the future is bright for softball in the TCI. On Sunday evening Games continued at the stadium. In the first game Windsong Braves 9 beat the Soakers 8. This game went down to the wire, with the Soakers leading going into the bottom of the last inning by one run with two out and bases loaded, the Soakers left fielder miss a fly all hit in left
field with two run in for the win. In the final game for yesterday between KIA Rulay & the Predators, Kia won with18 to HAB Predators 2 to close out the weekend.
Turkey match fixing: Football Federation clears clubs
Turkey's top football teams have been cleared of match-fixing by the country's football federation after a long-running investigation.
The federation said in a statement that "elements of the alleged disciplinary violation [had] not materialised" but gave no further details.
It also banned two players for trying to fix results last season.
And a separate criminal trial involving 93 football officials, players and coaches is still going on.
Analysts say the federation's decision may have an impact on the criminal trial because the organisation is advising prosecutors.
Some 22 league matches in the 2010-2011 season were said to have been targeted by match-fixers.
Last year's league champions Fenerbahce were among the teams cleared by the federation.
Fenerbahce were earlier banned from the European Champions League because of their involvement in the scandal, and club president Aziz Yildirim is one of the 93 defendants on trial.
The federation banned Turkish international Ibrahim Akin for three years for allegedly fixing the result of a game when his team, Istanbul Buyuksehir Belediyesi, lost to Fenerbahce 2-0.
Serdar Kulbilge of Ankaragucu was handed a two-year ban for allegedly attempting to fix the result of a game that Fenerbahce won 4-2.
The federation also disciplined eight other officials and players.
Samuels to join Windies squad today
Batsman Marlon Samuels is expected to finally link up with the West Indies touring party today.
The Jamaican has been one of three players yet to join the squad who arrived here last Wednesday, with batsmen Narsingh Deonarine and Assad Fudadin still stuck in Jamaica waiting on United Kingdom visas.
CMC Sport understands, however, that Samuels will join his teammates in Northampton where West Indies are due to play their second tour match, a four-day fixture against England Lions starting Thursday.
West Indies are due to leave for Northampton on Tuesday morning.
Samuels has been campaigning in the Indian Premier League over the last month but team management had appeared unsure at the weekend over his actual arrival date.
His absence, and that of the two Guyanese left-handers, meant West Indies faced Sussex in the opening three-day match with just 11 available players.
Fast bowler Fidel Edwards sat out the game injured.
The Windies were able to get just 34 overs out of the game as rain wrecked the encounter at the Probiz County Ground.
Only 16 overs were possible on yesterday’s last day as rain ended play before lunch with West Indies on 90 for three in their first innings.
It has been a bumpy start to the tour for the Windies with wintry weather and the late arrival of players marring their preparation.
The first Test bowls off in ten days at Lord’s.
BOXING:Lamont Peterson fails drugs test to put Amir Khan fight in doubt & Haye & Chisora to fight in London
David Haye and Dereck Chisora are to face each other at Upton Park on 14 July in a fight sanctioned by the Luxembourg Boxing Federation.
The british heavyweights were involved in a brawl following Chisora's defeat to Vitali Klitschko in Munich.
Neither hold a British licence, Chisora's was withdrawn after a number of controversial incidents before and after the Klitschko fight.
Haye relinquished his licence when he retired in October last year.
Meanwhile:
Amir Khan's rematch with Lamont Peterson is in doubt after the American champion failed a drugs test.
Both fighters agreed to random testing before their light-welterweight bout in Las Vegas on 19 May and Peterson tested positive for synthetic testosterone.
"Lamont has never had a positive test either before or after this isolated occurrence," said a Peterson statement.
"We plan to submit medical findings by Tuesday reflecting the facts in support of Lamont's good faith intentions."
The fighters are due to meet for a second time on 19 May after the World Boxing Association ordered a rematch following Peterson's controversial victory over Khan on 10 December, 2011.
The WBA claimed there were "multiple irregularities" in the first fight after Khan appealed against the points defeat which took place in Peterson's home town, Washington D.C.
The statement added: "We have tremendous respect for the Voluntary Anti-Doping Association [Vada] and its mission. Lamont, [his manager] Barry [Hunter] and the entire team emphatically support random drug testing in the most comprehensive manner possible.
"We are working expeditiously with a team of pathologists and other medical specialists to confirm the origin of the test result and in full compliance with the rules of the Nevada State Athletic Commission."
Khan's business manager Asif Vali told Sky Sports News: "It was a shock when I received the call to say Lamont had failed a drug test.
"However, the Peterson team seem to think that something's gone wrong during the very first Vada drug test which Lamont took in March.
"Their explanation is that it's something he took earlier on in the year - before the last fight.
"The fight's on. The Nevada commission will come back to us with their findings. That decision's due to come to us by the end of play on Tuesday."
Serena Williams wins but sister Venus out of Madrid Open
Serena Williams marked her first European appearance of the season with a comfortable 6-3 6-1 victory over Elena Vesnina in the Madrid Open.
However, her older sister Venus Williams lost 6-4 6-1 to Angelique Kerber in the first round.
Serena, seeded ninth, coasted into round two and served impressively, with 14 aces.
"I was feeling good," she said. "It's my first tournament in Europe this year and I hope I can keep up the form."
Serena, who reached the third round the last time she played in Madrid in 2010, struck 40 winners past her Russian opponent, who was last week's Budapest Grand Prix runner-up, and is unbeaten in eight matches on clay this season as she builds towards the French Open, which starts on 27 May.
It was an impressive performance and, speaking about the new-look blue clay courts, the 30-year-old added: "I haven't noticed, I think it's the same, you just don't get as dirty."
Venus's third tournament since being sidelined by illness was ended after being broken six times by the 12th-seeded German.
Fifth-seeded Samantha Stosur rallied to beat Christina McHale 2-6, 6-4, 6-0 to reach the third round, as did French Open champion Li Na after winning 6-3, 6-1 against Silvia Soler-Espinosa .
Petra Cetkovska also advanced, beating Lourdes Dominguez Lino 6-4, 7-5.
Defending champion Petra Kvitova beat Marina Erakovic 6-2, 6-3 in her first-round match.