Confidence Sinks as Progress in U.S. Job Market Stalls: Economy - (www.bloomberg.com) Consumer confidence fell last week to the lowest level in almost four months and more people than forecast filed claims for unemployment benefits, showing a lack of progress in the job market is rattling Americans. The Bloomberg Consumer Comfort Index dropped in the week ended May 13 to minus 43.6, a level associated with recessions or their aftermaths, from minus 40.4 in the previous period. Jobless applications were unchanged at 370,000 in the week ended May 12, Labor Department figures showed today in Washington. Diminishing employment gains, falling stock prices and the prospect of government gridlock over the budget heading into the November presidential election may continue to hurt household sentiment. The lack of a sustained rebound in hiring damps the outlook for consumer spending, which accounts for about 70 percent of the world’s largest economy.
JPMorgan's future losses at the mercy of an obscure index - (www.reuters.com) It's the biggest parlor game on Wall Street: Estimating how large JPMorgan Chase & Co's (JPM.N) trading loss will be from a hedging strategy that went wrong. The biggest U.S. bank by assets has already disclosed $2 billion of paper losses, and Chief Executive Jamie Dimon said it could lose another $1 billion or more. The losses will grow, some traders say, because it appears JPMorgan has only sold a small portion of its position, leaving it vulnerable to price swings in a thinly traded market. Others are not so sure the bank will suffer much more than it already has. Dimon said the bank won't rashly sell, and any additional losses could arise throughout the year. A JPMorgan spokeswoman declined comment.
JPMorgan’s Trading Loss Is Said to Rise at Least 50% - (www.nytimes.com) The trading losses suffered by JPMorgan Chase have surged in recent days, surpassing the bank’s initial $2 billion estimate by at least $1 billion, according to people with knowledge of the losses. When Jamie Dimon, JPMorgan’s chief executive, announced the losses last Thursday, he indicated they could double within the next few quarters. But that process has been compressed into four trading days as hedge funds and other investors take advantage of JPMorgan’s distress, fueling faster deterioration in the underlying credit market positions held by the bank. A spokeswoman for the bank declined to comment, although Mr. Dimon has said the total paper trading losses will be volatile depending on day-to-day market fluctuations.
Bankia IPO Causes Shareholders $2 Billion Loss Post Bailout - (www.bloomberg.com) Bankia SA (BKIA), the Spanish lender taken over by the government in a bailout this month, struggled to convince money managers to take part in its initial public offering less than a year ago. The bank instead relied on individuals, investors who are typically less equipped to analyze stock risks, to fill orders for the IPO in July. About 347,000 investors, most of them individuals like Josefa Rodriguez, an 86-year-old retired housewife from Madrid, bought Bankia’s shares. “My aunt is a lady with almost nil knowledge of financial products and this wasn’t an appropriate product for her,” said Marta Rodriguez, her niece, who spoke on her behalf in a phone interview as Josefa lives in a residential nursing home. “Staff at the bank was under a lot of pressure themselves to sell the shares.”
Spain Debt Fight Intensifies as Valencia Test Looms: Euro Credit - (www.bloomberg.com) Spanish Prime Minister Mariano Rajoy’s bid to fight off the European debt crisis is about to intensify as his government wields new powers to tame the country’s indebted regions. Regional officials from Rajoy’s People’s Party will today face their first attempt to persuade Budget Minister Cristobal Montoro that Valencia, which accounts for 10 percent of the Spanish economy, can avoid default without intervention. Deficits beyond the grasp of Madrid helped push the nation’s 10-year bond yields to a five-month high of 6.5 percent yesterday. The collapse of regional finances is pushing Rajoy to reverse 35 years of devolution that saw public spending soar for projects in Valencia such as Formula One racing events and a new opera house. The European Union predicted last week thatSpain will miss deficit-reduction goals this year and in 2013.