Summary
JPMorgan Chase & Co. (JPM) filed an 8-K on August 25, 2008, to disclose its exposure to Fannie Mae and Freddie Mac perpetual preferred stock. As of the report date, the firm held approximately $1.2 billion par value of these securities within its investment portfolio. The filing indicates that these holdings have experienced a significant decline in value, with an estimated aggregate loss of $600 million in the third quarter to date. These securities are marked to market through the firm's earnings, meaning any fluctuations in their value directly impact reported profits. The company acknowledges the difficulty in determining the precise loss due to the high volatility in the market values of these specific securities.
Key Highlights
- 1JPM disclosed holdings of approximately $1.2 billion par value in Fannie Mae and Freddie Mac perpetual preferred stock.
- 2These securities are part of JPM's investment portfolio.
- 3The firm estimates an aggregate decline in value of approximately $600 million for these holdings as of the third quarter to date.
- 4The decline in value directly impacts JPM's earnings due to mark-to-market accounting.
- 5The precise amount of loss is difficult to ascertain due to significant market volatility.
- 6The disclosure was made on August 25, 2008, reflecting events on or around August 24, 2008.