Gains from the sales could provide about 16 cents a share of earnings, about one-fifth of the bank's second-quarter profit, analysts said. But rather than creating new value for investors, the transactions merely shift gains in securities from one part of the company's financial statements to another.
"They really made two stupid decisions," said Lynn Turner, a consultant and former chief accountant of the Securities and Exchange Commission. The first was taking risks with derivatives that they did not understand, Turner said.
"The second is selling assets with high income that they can't replace," Turner added. In a low interest-rate environment, the bank will struggle to generate as much income with the cash it received from selling the securities, he said.
from an article By David Henry
No doubt CEO Jamie Dimon will be asking for a raise by year end