Impact of JP Morgan Big Loss
MALVEAUX: Welcome back. The largest bank here in the United States has come clean. Today, JPMorgan revealed the extent of a loss from risky trade investments. We are talking about a whopping $5.8 billion. It is almost three times as much as they had initially predicted. And now this stock, a staple in a lot of mutual funds, nest eggs, Alison Kosik, she's joining us from the New York Stock Exchange to talk a little about how this is impacting all of us.</s>ALISON KOSIK, CNN BUSINESS CORRESPONDENT: OK. Well, first of all, let's talk about the shares, because the shares are jumping a whopping six percent right now. And that's despite what you just said, Suzanne, that the $5.8 million trading loss is almost triple what the bank originally predicted. And guess what? CEO Jamie Dimon says the losses could get much bigger but the way that Wall Street sees it is investors have heard from Dimon himself, not the speculation that's been coming out over the past several months, and analysts say the way the market sees it, the main reason you're seeing shares of JPMorgan jump is that there is this feeling that the worst is behind them -- Suzanne.</s>MALVEAUX: So, is this going to impact a lot of 401Ks?</s>KOSIK: Well, here's what's interesting. If you look closely at your portfolio, JP Morgan, most likely, is probably in a lot of your everyday investments. In fact, the total value of JP Morgan shares that mutual funds hold is more than $50 million. One expert we talked to tells us it's kind of tough to quantify what the impact would be, but the trading loss isn't likely to have a big impact on your savings. So even with JP Morgan shares sliding about 16 percent when all of this came to light, shares of JP Morgan are still up about 4.5 percent for the year. So while you may not be where you were, let's say, on May 9th, before we got all this news about what's happening with JP Morgan, you still may be making some money on JP Morgan stock. Suzanne.</s>MALVEAUX: That's not bad. What about the big banks? Wells Fargo? Bank of America?</s>KOSIK: You know what. It definitely puts these other banks under a microscope more. You know, financials, we saw them get hit hard when this trading loss first came to light. There were a lot of questions whether these other big banks may have the same situation and investors didn't know it yet. That we haven't gotten any indications that this is the case. We are going to get a little more insight when some of these banks report their earnings next week. Citigroup on Monday. Goldman Sachs on Tuesday. Bank of America on Wednesday. Now here's one place, Suzanne, where JP Morgan does have a leg up. One analyst tells us that the bank is not as exposed to Europe as some of its rivals who may take a bigger hit from the debt crisis there. Suzanne.</s>MALVEAUX: All right. Alison Kosik, thanks. Have a good weekend, Alison.</s>KOSIK: You too.</s>MALVEAUX: They say you should start investing early. Well, now there are 15 school children with a leg up on their future. We are talking about, Warren Buffet awarded them shares in Berkshire Hathaway. So the kids were finalists in Buffet's Grow Your Own Business Challenge. They received 10 Class B shares. At Thursday's close, those shares were worth close to $836 each. Good for them. Serious allegations against the mayor of Washington, D.C. Why some city council members are now calling for Vincent Gray to step down.