JP Morgan (JPM) revealed in a regulatory release that it has written down $1.5 billion more on mortgage backed assets after conditions in the market “substantially deteriorated” in July. JP Morgan’s capital is in fine shape, so this is largely irrelevant. The question is what it means for companies like clobbered WaMu (WM) and Lehman (LEH) FT:
Bankers said July was the worst month for mortgage-backed bonds since the beginning of the crisis, as a combination of cut-price sales and waning demand from large investors helped to depress prices.
JPMorgan declined to comment further. However, people close to the company said it had been forced to write down the value of its $33bn in mortgage-backed securities as prices continued to drop in July.
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.
Or 6 cents after Merrill’s loan to the buyer. So, WaMu, how did you do in July? Lehman?
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