thought jpmorgan was in for a whale of an earnings disappointment. >> earnings for jpmorgan are up 25%>> shorting the stock -- >> think of your families. don't risk your life. don't try and be a hero. >> let's stick to the options. to make a bearish trade, the august 35 strike for $1.15. to keep all of that money, he needs them to stay below $35. above $35, profits would trail off. he won't see losses until jpmorgan rises above that call strike than the $1.15 he took in. meaning that he can make money whether jpmorgan goes up, down or nowhere at all. >> sorry. is this a robbery? >> not quite. there is a trade off. if jpmorgan soft trades above $36.15, he will be on the hook for infinite losses. >> wow. >> you've blown it man. >> so to limit his risk, he bought the august strike call and completed his bear call spread and here is how it makes money. between the $1.15 he collected selling the more expensive lower strike call and the 50 cents he spent buying the cheaper higher strike called pocketed 65 cents. in order to keep all of it, he needs jpmorgan stock to stay below $35 by august

the jpmorgan report i don't view as genuine. the reason for that, there's a lot of accounting issues that go into making a strong earnings beat that takes a lot of one-time items as gains. i agree wholeheartedly. thing it is very strong and i think wells fargo speaks of that. but the investment banking business is half of jpmorgan's business as a whole and that's an area i tlirng be under pressure and today's report doesn't change. >> let's look specifically at next week's roster of earnings bus nearly 20% will be reporting from tech to financials to consumer financials. as you're taking a look particularly, can we glean a good quarter for morgan? >> absolutely not. >> to the point you were just talking about. jamie dimon just said it was weak for capital markets and all capital markets businesses. it wasn't just equities and advisories, he said the third quarter started out like the second quarter. europe and asia specifically had been weak. those are the growth investments. moreover morgan stanley has been closely correlated t

it's been a heck of a houtough e with jpmorgan. it's been a tough trade to stay long in that stock and the financials for that matter. really wells fargo, which has earnings next week, is the one standout i was looking at today as a way to play to the long side for financials. maybe i'll look to do that come monday or tuesday. >> that's going to be the tale of two different kinds of banks, wells fargo, domestically oriented and jpmorgan, which is internationally oriented. >> jpmorgan, if they make a lot of clawing back reserve, that doesn't count. if the quality of the earnings for jpmorgan is really good, two things -- that will be a huge surprise and we'll have to find out where they are on this london whale trade. >> once of first of the cohorts report, what happens to the volatility of the rest of the players? >> i think it's probably safe to say we'll see some of them come in. some of them is a stock-specific story. we haven't even mentioned the fact that there's also a power trading scandal in the midst of all of this as well

you look at jpmorgan or jp dimon -- >> you can call it that. >> jpmorgan has now cleared the path for the return of the buyback in the fourth quarter. and by moving the cio unit back into the investment banking division, they are telling you they are comfortable going forward, that they have mitigated it and in essence ceased the losses on these portfolios. >> jon najarian, i don't know what you want to talk about. but i'm going to put this out there. jpmorgan, all the headlines are about the loss, the whale, the malfeasance. but if you dug into the numbers, mortgage volume was up 29%, nearly every metric, except the trading around that synthetic crediting index was up. not a bad quarter. >> no, a pretty spectacular quarter. and a lot of egg on the fis ace "the new york times," not sorkin and not the folks that we depend on at cnbc but some of the other folks at "the new york times" that said the loss could be up to $9 billion, they have a lot of egg on their face. everybody questioned that number. i questioned the numbers when they offered them out there. and now here the number come

this is not going to break jpmorgan.e out of this. >> other than we keep getting financial services industry keeps getting hit with more and more and more news that undermines confidence in the entire industry, and the populist anger rises after the financial crisis and this just adds to it, that these guys are gambling with the depositor money and eventually maybe with taxpayer money and they need to be reined in. it adds to the environment that could be a negative for credit expansion unfortunately in the future. >> it adds to the environment. of course what happens there's a ripple effect so bb&t will be investigated for a business we aren't even in. the regulators' biggest fear is being embarrassed so as soon as something goes wrong they tighten down the standards. the lending standards in the u.s. today are the tightest in my 40-year career and it's because of regulatory overreaction and people drop the context. this is one mistake by a large company that can actually afford the mistake but that ripples through the

clawbacks are coming at jpmorgan chase. do you think it's fair for companies to claw back payment of employees who lose one for the company? yes or no? go to finance.yahoo.com and tell us what you think. the results coming up. >>> but first, to simon who's in for sue with bob pisani on the floor of the new york stock exchange where stocks are moving higher. >> indeed welcome to the floor of the new york stock exchange for the seventh day the bears rested. 170 points higher on the dow. bob, is this short covering? >> oh no. there's fundamentals behind it. hitting 200 points up on the dow, we'll break even for the week. as miserable as it's been, we're on the verge. let's call it the just good enough rally. china gdp 7.6%. that's good enough to help the commodities market. jpmorgan and wells fargo market, good enough for financials. we need them to do better in the second half of the year and then a pullback and helped the commodities market overall and then finally simon, art told me yesterday to rally. the reason? moon cycl

the jpmorgan report this morning was not as bad as feared, so jpmorgan has been the strongest today with a gain of almost 6% right now. and that's powering the market higher. the dow is up 194 points. if we finish up 200 points on the dow, it will be positive for the week. we're seeing that right now. amazingly the market is setting those metrics. >> what a move, really strong. wells fargo among the names leading the mnl mark-- financia . wells also avoided the controversies that are facing peers like jpmorgan. let's get more reaction to the news with timothy sloan, it's great to have you back. >> thanks, great to be here. >> let me ask you about the jpmorgan trading mess. they made a move today to clawback compensations from executives involved. is this good for the industry? >> i'm not familiar with the specifics of the jpmorgan announcement this morning. we were focused on our own earnings. i think shareholders have the right to expect that the management operate the companies in a appropriate way, and if we don't we should not get paid. >> we don't see clawbacks, right? do you think

jpmorgan asset management who is still with us. make of the efforts of greece to recover versus, say, ireland? we were mentioning the troika has been over in ireland taking a look at the situation there and has a pretty favorable impression of how they're doing and their efforts to get back into the markets. >> well, the two problems are different in very many aspects. i mean, greece's problem was it simply borrowed too much when it was able to access finance at the german rate of interest. ireland is suffering from the aftermath of a very severe property bust after an excessive housing boom. so they are somewhat different. they both have a long way to go. and i think the question marks are over what length of time they should be allowed to adjust towards a more sustainable set of macro numbers. and i think in greece's case, people are still worried that even with this latest bailout, its public sector debt to gdp ratio is still forecast to increase to something like 160% by 2014. and yet the economy is in a deep recession. so more

jpmorgan is the focus. added half an hour to its analyst call to talk about its london whale cio derivatives trade. jamie dimon will have to be convincing they've cleaned it up and know the size of the ultimate losses. i'll be looking at the buy back program. a resumption to that would be positive. >> all right. we'll be watching as well. thank you, gentlemen. we appreciate you chiming in. up next, my observation on the heat mitt romney is taking about campaign contributions from the financial industry. back in a moment. people with a machine.ced what ? customers didn't like it. so why do banks do it ? hello ? hello ?! if your bank doesn't let you talk to a real person 24/7, you need an ally. hello ? ally bank. no nonsense. just people sense. this is new york state. we built the first railway, the first trade route to the west, the greatest empires. then, some said, we lost our edge. well today, there's a new new york state. one that's working to attract businesses and create jobs. a place where innovation

. >>> here's why the jpmorgan story matters. it's the nation's largest bank, and a stock that's likely in your 401(k). plus, the shadowing world of derivatives almost brought the financial world to a collapse just a few years ago. christine romans is joining me now with more. >> all of those reasons are why so many people are looking at what might be deemed as a business story and saying this is a story for everybody, right, carol? this is a trading los that happened right under the nose of what was thought to be the smartest banker in the room, jamie dimon. and the loss showing that even from the very beginning, when he first said it was a tempest in a tea pot. and now it's $5.8 billion. and really the period is not on the sentence yet. we'll have to see how the rest of the trade is unwound. $5.8 billion loss shows very significant risk failure in this bank from some of the very people that were depending on having good risk management because of how important banking is to the economy. >> what about regulations? will anything

wells fargo, jpmorgan. and jpmorgan is the name everyone is watching. enis, at this point, we have the london whale trading loss and the potential libor investigation over the entire industry. >> three main reasons i'm bearish. one is regulatory scrutiny, not just the whale trade loss on its own, but ongoing futures earnings loss that will result from that, and, in addition, earnings expectations are up 25% for jpmorgan, 2012 to 2013. i don't see that, given the loss of earnings power, and finally, european stresses are still out there. we saw the spanish yield touch 7% today. >> financials have been a laggard, in terms of sector bets, brian, any section to the bets on the sl, for instance. >> certainly, the xlf is lagging the last couple of days. jpmorgan, a top holding in the slf. that will have a drag on it a heck of a tough time with jpmorgan. i own it myself. i continue to write calls to help lower the break even point. it's been a tough trade to stay long on the stock and the financials for that matter. really, wells fargo, wr earnings next week.

shares of jpmorgan chase are up more than 3.5%.been happening this morning, there's been a two hour meeting with jpmorgan chase ceo jamie dimon and analysts and some reporters. no one knew what the outcome of the meeting would be. everybody really wanted to know how big would this trading loss be from the risky trades that had been happening. wall street hates uncertainty. so a lot of traders were very uneasy going into the session today. because of the meeting, a lot of questions were answered and answered the way the market likes to see it, and that's a good thing. the total net came out $5.8 billion for the losses. almost triple what it was originally thought to be. yes, it is eye popping. and the ceo, jamie dimon, says the losses, guess what, can get bigger by $1.7 billion. even with the trading losses, the bank still beat expectations, today reporting $5 billion profit in second quarter. look at the whole year, jpmorgan chase has taken in $9.9 billion in profit. as for the employee fallout, the bank says the chiefnvestment off

jpmorgan and wells fargo earnings, beat by a penny. these companies are big, that's improve fg the financial outlook for those stocks, and of course a down in the dollar. there's banks. we're going to get a lot more of them in the nekts couple weeks. look at the home builders too. they're helping them. also, blackstone buying some property, and some upgrades as well. for the week, we just barely went down. we just did it by five points, positive territory, the nasdaq down 1%. mar maria, apple was one u unchanged on the weekend. >> brian shactman was at the market flash desk. >> mcgrawl hill, apoll low is exploring that company. >> banks and the big wall street rally in focus today. we have a lot more ahead on this busy edition of "closing bell." >> coming up, is dimon forever? should the jpmorgan chief lose his job after the firm's $4.4 billion trading loss? or is he as good as it gets when it comes to bank ceos. the debate is straight ahead. eliot spitzer runs in on the recent rash of wall street scandals and how he plans to fight all

jpmorgan and wells on friday.gan stanley, bbt during the rest of the week. have these three big guys set the tone or have they set the bar so high others will have a problem keeping up? >> you know, i don't think they have really set the bar too high. i think what we're seeing is some of the capital market stuff wasn't as bad as we feared, which is a plus. i don't think they are going to be unique in what they are seeing in the credit markets. we knew net interest margin and pressures like that would be coming. i suppose the one thing that will differentiate the money banks from standard regional banks, they are the big mortgage originators right now. we're still seeing a lot of volume, very strong margins in the mortgage business. so there are some things that will repeat. i think the main issue, they should be relatively good earnings season for the banks. i say relative to expectations. a lot of these stocks are really beaten down, expectations are pretty low. >> finally, jeff, panda talking to the telegraph in

obviously jpmorgan shares surge, things could be worse. the titanic image is frightening when we look at banks. if someone like jamie dimon isn't sure how big, how magnificent, the interest rate scandal might be. >> we certainly learned that in 2008, erin, when two weeks before the big financial crisis, nobody thought there was a crisis. two or three weeks later, we saw major banks that basically their stocks went down to nothing. so you're right, these things can happen very quickly. where the val uation of these big banks can fall very substantially. i do think what happened in the case of jpmorgan is i think investors thought there was a lot more than $6 billion on losses. i think -- we had talked a few weeks ago -- that the losses could be $10 billion or more. it's no too surprising wn they said it was closer to $6 billion, the value of the shares went up. in terms of what we do about this manipulation, apparent manipulation of the libor rates, the problem here is it's not really a market, erin, it's set by the banks, it's kind of an i

look at the financial stocks and very modest -- a penny on wells fargo and jpmorgan. they're so weak it makes a difference lifting the overall earnings picture already. yes, very, very early but that's a big help. most people i talked to, this is not a big quarter that anybody's expecting. a third and fourth that's important. put up the s&p. mostly a trading range. at least that's the comment for several weeks here. this is up for the year and here's the trading range here that we have been in for the last few weeks. i think the important thing is if you're interested in stocks that have been holding up very well, they've all been defensive. new highs on a number of names here. colgate and the other ones, merck, ely lily. they're olding up best right now. mandy? >> doesn't matter not exciting or sexy. as long as they make us un, right, bob? >> that's right. >> you'll talk to us about the wine crisis in italy. you did research there last week. >> research. >> i'm going my bit here in the states and see you then. thanks, bob. >> okay. >> i have to correct you for a seco

now jpmorgan and deutsche bank in the crosshairs.el of that net interest margins increasingly pressured because we're going to have zero interest rates as far as the eyes can see. in tech land, particularly exposed to the europe slowdown and strength of u.s. dollar, growth of expectations, personal computers, smart phones and chips, this is being revised lower. put this together, a potentially toxic cocktail. >> let's go back to may 9th. i'm sure you remember it well, on the heels of a values investing conference you made out in nebraska where you said, i want to listen to a sound bite regarding treasury market, what you thought the prudent thing to do at that point was. let's listen to that sound and come back and talk about it. >> well, i think the equity market is approaching a point where it's getting far too negative on u.s. economic growth and corporate profit growth. the bond market with 1.85% ten-year yield is also too convinced u.s. growth is going to falter. the good news is being ignored, bad news emphasized. >> the gist o

jpmorgan chase did it this morning. (sir can-a-lot) good day, ma' lady. [muffled] i am sir can-a-lot. i am sir can-a-lot, here to save you from another breakfast bore. wake up those eggs with glorious spam! (woman) hmmm... that's actually a good idea. [nervous giggle] (ancr) break the monotony. for more fun ideas visit spam.com. >>> well, we have an update now to the breaking news that we are following in san bruno. this is a live look at the scene where this two-alarm house fire is ongoing. we've just learned a 2-year-old boy has died in this fire. the home is on lake drive west of 280 in the hills of san bruno. now, as you can see, still very much an active scene with plenty of fire trucks in place. the ladder placed up to the second floor there. neighbors say construction workers in the area heard the sirens and then came running for help but were told the 2-year-old was trapped inside, and that 2-year-old has died. now, we do have a reporter on scene gathering new information for us. so as soon as we get that updated information, we will bring it to y

do you think the jpmorgan loss could be as high as $9 billion? what's your take on how high that trading loss becomes? >> it's certainly larger than the $2 million last month. i heard as high as 8 and rumor circulating closer to 5. certainly larger than $2 billion. you have to see what these companies really earn. i think that's the most disturbing part of next week's results and for the group in general. the fundamentals for the group are so bad not only in flat yield curve environment, investment environment, that is screaming for head count reductions and downsizing. the fundamentals are louse. i with respect to the libor scandal, it's really bad. the financial system globally is predicated on a faith-based system. if you have banks manipulating rates on which so much financial activity is based upon, it really gets to the core of how much faith do you have in the system. the regulators are going to be and should be all over this. i know the legal community is concerned about this. i think it will be a very very big deal for the industry. >> a

and today, all about jpmorgan. bank posted a $4.4 billion second-quarter loss from its london whale trades but also saying some of its traders might have tried to at least conceal where their marks really were in the first quarter that led to them actually taking $459 million. so we are asking you, jail time aside, what's the most fitting punishment for these traders? tweet us your answers. is new y. we built the first railway, the first trade route to the west, the greatest empires. then, some said, we lost our edge. well today, there's a new new york state. one that's working to attract businesses and create jobs. a place where innovation meets determination... and businesses lead the world. the new new york works for business. find out how it can work for yours at thenewny.com. sfx: sounds of marching band and crowd cheering sfx: sounds of marching band and crowd cheering so, i'm walking down the street, sfx: sounds of marching band and crowd cheering just you know walking, sfx: sounds of marching band and crowd

jpmorgan did just fine. what happened?eresting, wolf, a lot of this comes down to just mistakes made in management. look at jpmorgan itself, wolf, during the financial crisis, literally the federal government said you need to go out and take over behr sterns and they went ahead and did that. if you look at the assets of jpmorgan, it's almost 50%, just about 45% bigger than it was before the financial crisis. so it was enormous then and now it's even more enormous. the top few banks in this country, wells fargo, jpmorgan, bank of america and citi group, their assets equivalent to about 50% of our entire economy. so the reason jamie dimon may not have known even though this was pretty close to him is that his bank is incredibly huge. he may have the reputation of the top manager in the industry, which he did and he still does, i think it's safe to say, but you can't know everything. sometimes things just get too big. and that's the big question they have to deal with. he acknowledges that he doesn't agree with that assessmen

why not go out and buy jpmorgan? >> one of the things -- i wouldn't be afraid to do it right here, to tell you the truth. one of the things is that we can't miss, this is going to take a long time to do. they say the devil's in the details. on this particularly, there's going to be a lot of details that will take a long time to get these split up, a lot of hoops to jump through. i don't think that this is actually something to go out and play for thor in term. in my opinion, it could take a couple of years. it was a heck of a lot easier to put them together than it's going to be to take them apart. >> i think jpmorgan is bank you can look at. jamie dimon took down 500,000 shares, a $17 million investment last week. that said to me that the london whale trade isn't as bad as a lot of the reports have been. we've seen that. we know that. he put his money where his mouth is. this stock is still trading near tangible book value and about 15 points off from recent highs. to me, jpmorgan is something we haven't stepped in

i feel that jpmorgan should have paid theirs. >> reporter: now, jpmorgan admits they have other associationre suits against them on properties they do own. solomon says one miami beach association he represented actually succeeded in repossessing a condo. if you buy a foreclosed property with an hoa lien against it, you could be possible for it as well. >> diana, thank you very much. >>> fears, as you know, are growing in europe of a prolonged slowdown, as financial worries mount. how might this impact your financial decisions? go vote in the finance.yahoo.com poll. >>> now over to jackie deangelis. >> we're looking at shares of hub group. we're looking at a near 10% drop today. a few firms downgrading it in response. if you look at the weekly chart there, you can see we're down 17.5%. >>> we are awaiting that news conference out in colorado after the shooting spree early this morning at a theater in that colorado suburb of denver. when it happens, we'll bring to it you live. >>> next, we're going to analyze the analysts on wall street. on our list today, hess, stanley black & decker and eb

that's jpmorgan and wells fargo reporting. take a listen. >> i truly believe that the earnings results from jpmorgan and wells fargo will be a catalyst. pnc came down, filled the price gap at end of the month from june 28th, 29th. that's your trade. that's what you want to be long going into financial earnings. i'm adding to my longs aggressively today. >> i'm curious, joe. in terms of base case scenario for being a catalyst for the markets, what would that be? what about the loss in london? >> i think he has to, in essence, tell those on the conference call that he is very comfortable that the loss has not only been mitigated but there is no further potential losses going forward. i think he also has to talk about what he's going to do with the share buy back. again, i still think the trade off of all this, and give me jpmorgan on a pull back because i'll buy it, but you look at the regionals as your way to play that. guys have talked about usb. i've added to pnc and texas capital. the reason you're playing these regionals is

jpmorgan will report quarterly results tomorrow. the "new york times" is reporting that a shakeup at the new york fed after the financial crisis could have clouded the view of jpmorgan's risk in mid-2001. the fed replaced nearly all of its roughly 40 examiners at the bank. is that right? it's true. this goes to this whole idea of accountability, right. they are not accountable for the financial crisis. swap them out. timing of the swap is pretty bad. and now we're left in a situation where potentially and, look, you never know but they brought a whole new group of people in that were less familiar with jpmorgan's operations. >> those changes are said to have left the regulators front line examiners without deep knowledge of jpmorgan's operations for a brief, yet that was the critical time. let's check on the markets this morning again. did you see that? all morning long they were up. you see we closed almost 50 points lower. today it looks like not going to be any tease for us going higher. >> by ten. day it will be up? >> remember

anybody, not just jpmorgan but anyone who manages a fees collects funds. they're earning 1 to 2% in management fees, which is why they would want to be in this business. >> jpmorgan's funds didn't always perform well. >> that's the problem here. it's like selling a pinto but telling the buyer it's a cadillac. they promised returns on these funds of 15%. when you look at how they performed, it was 13 to 12%. 42% of the funds according to morning star performed at average or worse performance than similar funds operated by other man managers. >> i get your point because i had a pinto. adam shapiro, thank you. >>> the c.e.o. of a major british bank stepped down amid market manipulation scandal. barclays bank illegal fixed interest rates it charged other banks to borrow money. british authorities may pursue criminal charges. financial watchdogs in london and d.c. are investigating whether other big banks rigged interest rates for their own benefit. the c.e.o., one of three top barclay executives to resign in the past couple of days. >>> the united states flexi

take a look at jpmorgan. a lot of us wanted to buy when we saw the jamie dimon committing $17 million to that stock last week, to jpmorgan. you got your chance this morning. if you blink, you missed buying it at basically 33 $33 a share. it's over $1.10 higher than that right now. tint opportunities presenting themselves left and right. we've had eight straight down mondays, a number of up fridays. friday, this past one, was not one of those big up days. i think a lot of folks got spooked, decided to wait and not buy on the dip. that was a problem. >> grasso, over at the floor of the new york stock exchange today, what are the guys, gals talking about down there. what are you doing here? the guys make a good point in that, yes, we've had these selloffs. seems like the worst is yet to come. but yet the market's seemed to come back by the end of the week. last friday may not have shown that. but you get the point. >> right. you touched on it before. we sold off around the opening, back to the european concerns,

shares of jpmorgan chase up more than 5.5%.our minutes to go before the closing bell. one analyst says there's this feeling the worst is behind them. something else making investors happy, dimon said that these trades that are still in this bungled portfolio may actually still be able to make the company money. plus, outside of this trading disaster some of the most important divisions that are at jpmorgan like investment and retail banking, they did very well in the second quarter. and there's also been a lot of demand for the bank's loan. so jpmorgan had a pretty darn good second quarter. fredric fredricka. >> very good. alison kosik at the new york stock exchange. thanks so much for that. catch them if you can. doing over 180 miles an hour weaving through traffic all while filming himself. now police in british columbia are trying to track him down. they think they know who this guy is 25-year-old randy george scott of victoria. this video has gone viral with a million hits on youtube. scott is facing charges that could have

jpmorgan benefits because if they are putting people in to jpmorgan's funds, jpmorgan collects the managementee. right? >> that's right. so it's more profitable if they're putting clients in there. so, even if they try and prevent that conflict of interest, clients may still perceive there to be a conflict of interest because you have the fund company's name is also the broker so it can get a little messy. >> i'm remembering, russ, that there were a lot of companies, brokerage companies, whether it was smith barney or, you name them, paine webber when there was a paine webber, they all had their in-house branded funds. leg mason. and it did create a problem there. and a lot of those companies then severed their money management companies. right? >> exactly. it turned out that this isn't a great business model because clients are more forgiving of an honest mistake than if you put them in a fund that loses money and it's a fund with your same name on it saying not only cost me money but maybe you did it to line your own pockets and what we saw out of the bear market that ended in '02 is a lot

i'm going to look at jpmorgan.ve to see how much clarity they will give us going forward, and that's what i'm looking forward to toward morning. >> thank you, good to see you, we're heading lower again, but as matt points our customers, the dow was down at theow

jpmorgan chase has not said yet how big the it was last spring. they could see as much as $9 billion. you also mentioned was fargo. they're paying a 2 $125 million to settle allegations they discriminated against minority borrowers. on top of that, it will set up a fine. the agreement with the justice department also settled accusations that the letter put credit where the hispanic and african-american home buyers in subprime marriages. starbucks is giving away items for free. details are coming at the next hour. from bloomberg accords in new york back to you. >> we will stay tuned. thank you. it is 40 8:00 a.m. >> still to come, there is more fallout and the response to last month's storm. more on the proposal [ female announcer ] when skin meets goddess... romance happens. confidence happens. ♪ ♪ when skin meets goddess, anything can happen. introducing venus & olay a match made in skin heaven. olay moisture bars release skin conditioners to help lock in moture and boost your shave. while five blades get venus close. revealing smooth. renewing b

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if we look at jpmorgan, you can see that european banks have 25 year price lows in this week, and jpmorganas fallen just like all of the u.s. investment banks have, i think jpmorgan and citi group will follow european banks lower. >> all right, that's the word on the technicals from ennis and chris, we'll talk to you again soon. >> we're in the final stretch here and the market losing altitude for sure. we have seen the gains cut in half and then some. our next guest is predicting a 50% chance of a recession. why the economy is going over the edge, and timothy geithner saying quiet when being pressed about breaking up the big banks, listen to this. >> do you have any reaction? >> he's one of the architects of the super market concept. >>> there you go, would it be in the best interest of banking investors? and do you agree with sandy weill's call to break up big banks? tdd# 1-800-345-2550 i'm constantly working my screens. tdd# 1-800-345-2550 checking the charts. tdd# 1-800-345-2550 looking for support, tdd# 1-800-345-2550 resistance, breakouts, tdd# 1-800-345-2550 a few other tricks that

jpmorgan, it's a buy. stick with cramer. this is new york state.ilway, the first trade route to the west, the greatest empires. then, some said, we lost our edge. well today, there's a new new york state. one that's working to attract businesses and create jobs. a place where innovation meets determination... and businesses lead the world. the new new york works for business. find out how it can work for yours at thenewny.com. >>> seconds away on a special edition of "the kudlow report," the markets make a big play for a sign of life in the economy. 204 points up. but does this rally really have legs? also,

however, there is a playbook for redemption for jpmorgan and the ceo., in dismiss those who screwed up and try to call back their bonuses. as of today dimon has checked off every one of these bonuses. second we have to see whether the company will be good to its word that business was strong and getting stronger which was the subtext of the chatter at the time of the admission. turns out it was even better than that with june being an exceptionally profitable month and a really terrific streak of business. third we need to hear some explanation for why someone as good as jamie dimon didn't catch this rogue trade before it blew up and cost the firm billions. or why just to minimize it when it was flagged. my biggest fears were twofold. one, did dimon not understand the awful trade? in oth words, was he in over his head? or two, did dimon take his eye off the the ball? today with the restatement of the first quarter on top of the earnings for the second quarter dimon left the impression that perhaps the numbers he was looking at from the lontd office that

banks involved in setting libor are jpmorgan, city, et cetera.re going to be hearing more on this front? >> i really do, and i think unlike many orders or settlements we've seen out of regulators, the one that the cftc issued on barclays really was telling and it really brought to light the probability, not just possibility, that we could see criminal charges -- >> does it matter if regulators knew? does that change the equation? >> that's a great question. it probably depends on what they knew and what their involvement was in the discourse, because certainly, knowledge and intent is central to being able to bring a criminal case. if i could just add one other quick thought there, though, also is that often we're looking at violations from the standpoint of are these violations of the securities laws or the regulations that actually govern? what i think is interesting in the libor case is the fact that they're talking about collusive conduct. so, i think we could potentially see allegations that may move out of securities and into other areas, a

jpmorgan, it's a buy. stick with cramer. s new york st.irst trade route to the west, the greatest empires. then, some said, we lost our edge. well today, there's a new new york state. one that's working to attract businesses and create jobs. a place where innovation meets determination... and businesses lead the world. the new new york works for business. find out how it can work for yours at thenewny.com. a living, breathing intelligence helping business, do more business. in here, opportunities are created and protected. gonna need more wool! demand is instantly recognized and securely acted on across the company. around the world. turning a new trend, into a global phenomenon. it's the at&t network -- securing a world of new opportunities. ♪ >>> all right, guys. we need to hear something good from china. if we get something good from china on sunday, we're going to come in and we're going to continue this rally. but if we don't we're going to be back in euro land, despite at

jpmorgan chase it is that the trading blunder earlier this year was actually -- jpmorgan chase reports that the trading but earlier this year was actually more money than they thought. $4.4 billion. this ceo says the bank has shut down the division responsible for the loss. several executives could lose their jobs and be forced to forfeit salaries. an outsourcing decision by ralph lauren -- democrats and republicans are blasting team usa uniforms. the reason is because every stitch is made in china. >> i think they should take all the uniforms put them in a big pile and burn them. >> you would think they would know better. >> congressmen brown said a factory in his state could crank out new blazers in time for the game. the ellen the committee says it is standing behind ralph lauren. -- the olympic committee says it is standing behind ralph lauren. basketball crashed to the dominican republic 113 to 159. kobe bryant has gone on the record saying this year's team is the best ever. in fact, he said they could be the 1992 dream team. michael jordan was quick to react, calling the opinion

when jpmorgan goes up, the volume disappears and seems if the big players are a little bit shy on jpmorgan earnings. i'm staying off of jpmorgan for now. >> simon? >> interesting. okay. >>> coming up on the show, a real power lunch ahead. oh, in fact, a lot of them, actually. see who's meeting with whom at the big moguls conference in sun valley, idaho. >>> of course, we'll talk as you saw earlier in the program about the $119 million deal "the scream." more "power lunch" coming up. looking for a better place to put your cash? here's one you may not have thought of -- fidelity. now you don't have to go to a bank to get the things you want from a bank, like no-fee atms, all over the world. free checkwriting and mobile deposits. now depositing a check is as easy as taking a picture. free online bill payments. a highly acclaimed credit card with 2% cash back into your fidelity account. open a fidelity cash management account today and discover another reason serious investors are choosing fidelity. so what i'm saying is, people like options. when you take geico, you can call them anytime you

friday the 13th everywhere, ask jpmorgan chase. the nation's biggest bank says the disastrous trades are worse than first believed. almost three times worse. >>> 240 yards long, 55 feet underground. another suspected drug tunnel out of commission on the u.s. mexican border. we'll take you deep inside. >>> and guys, would you rather be bald or impotent? propecia and what it may do to your sex life. >>> trying to outsmart the markets. in the case of jpmorgan chase, it is $5.8 billion and counting. that's how much the nation's biggest bank said it lost so far from a complex trading scheme that was supposed to hedge against risk. the updated figures came in as the ceo jamie dimon personally briefed analysts on second quarter earnings which still managed to beat expectations. team coverage this morning, alison kosik live at the new york stock exchange to explain how this could impact all of our wallets. let's start with felicia taylor. you're at jpmorgan chase headquarters in new york. we have a healthy bank, o do we have a healthy bank

a few individuals can cause such a precipitous market drop in the valley of jpmorgan. i think this is to say to the market, we will penalize people who do bad. >> this might have been carried out in london but the staff were from new york. it was here that they had to by financial analysts. politicians might be wondering if the bank is too big to regulate and too big to run. >> visa, mastercard, and major banks have agreed to pay $7.3 billion to millions of merchants to end a dispute over card fees. this is $7.3 billion. still to come on tonight's program, paying to be liked. for facebook, it is big business but the companies are really getting a big bang for their buck? two billionaires' brothers behind asia's biggest property companies have been charged with bribery-related offenses and hong kong. we have the details. skylinekong's iconic would be unrecognizable without the top property fund run by the billionaire kwok brothers. they are behind three of the city's tallest been -- buildings. they faced a judge on friday at the start of what is expected to be in a long