. >> reporter: mike mayo, who closely watches the company for the investment firm c.l.s.a., says in april dimon dismissed concerns the bank was making big eets on credit derivatives that even then were rattling the markets. >> one month ago, jamie dimon o ve a reassurance that this was "a tempest in a teapot" when it came to the company's investments. here we are one month later, and there's a $2 billion loss on their books. of reporter: those risky bets

an exclusive interview with mike mayo.od to see you. >> how you doing. >> you can't real the whole report but give us some quick reasons you why downgraded j.p. morgan, which nearly every analyst that comes on says it is best in class. if there is one safe place, it is j.p. morgan. you are doubling, two notches, from outperform to underperform. why? >> count me as one of those analysts. i was one of those last year that said buy j.p. morgan. but i'm negative on the banking industry. i think the first quarter is as good as it gets. economic growth is decelerating. i just think they are more expensive than some other banks out there. >> sounds like that is true of the entire banking sector, not just j.p. morgan. >> to some degree it is true about the entire banking sector but it is also especially true about j.p. morgan. market activity not as strong as the first quarter. you have the mortgage business that's not likely to hold on for too many more quarters the way it was in the first quarter and you had this halo effect ove

mike mayo, what would you tell jamie dimon to say here? he won't exactly be among friends. >> or not say. >> well, i would say that the issue here is a crack in the business model. i mean, if you have this crack, what other cracks are there? the whole premise behind these big banks, behind the financial conglomerate model is you have a strong infrastructure that centralized and integrated. in the case of what just happened, that's not the case so fully at jpmorgan. the regulators probably missed this too. i can't imagine that this loss was any stress test done by the fed. >> well, you know, he needs to, perhaps as you did put things in perspective. the size of the loss relative to the size of their balance sheet, and let's face it, it's not illegal to lose money. when you place bets such as they did with these. head banks do it all the time and they lose money all the time. just not to the size they do here. bob pisani? >> a very good point. he has to hoe a very fine line. he has to look contrite. he has been doing a good job of doing that

joining us now, banking analysts mike mayo, author of "exile on wall street." mike, you have become one of the more out spoken folks out there on this issue. let's make it clear, there is nothing offensive about banking to you, there is nothing offensive to you about wall street or a culture of lending or a culture of investing or opportunity speaking or all those things, it is simply the inspection that was approved d and ordained of a too big to fail banking apparatus. what do we not understand about what happened at jp morgan that you do? >> i think what's very disappointing is that these losses were in in an area that was about taking risk, it was in an area that was about reducing risk. it's as if i went out to get insurance on my house and a month later i tell my wife, i lost $100,000 on the insurance. i would be like, what's taking place here? there are so many layers at a company like jpmorgan or any large banks, it's a lot more than any one bad trade. and the significance of what happened this week and last week at jpmorgan is that it's a reminder that

. >> reporter: mike mayo, who closely watches the company for the investment firm c.l.s.a. says in april dimon dismissed concerns the bank was making big bets on credit derivatives that even then were rattling the markets. >> one month ago jamie dimon gave a reassurance that this was "a tempest in a teapot" when it came to the company's investments. here one one month later and there's a $2 billion loss on their books. >> reporter: the risky bets were placed out of the bank's london office by a trader named bruno ixill, nicknamed the london whale but he was not a rogue and critics say that raises serious questions about risk management at america's biggest bank. michael houston is an analyst with the london investment firm c.m.c. markets. >> the "too big to fail" culture really is still there and there is a concern and i think it will make the proponents of the volcker rule more emboldened. >> reporter: the volcker rule, set to go in into effect in july would prevent banks from making speculative bets that could put both themselves and taxpayers at risk. it's named for the

mike mayo one of the top banking analysts in history of wall street. walked out and said this is a corrupt system. i was like a guy living next door watching him and mike was a child in the house. i said what are you doing? he said, you have the established accounting standards. once you have accounting banking, and then he called it the abc plan accountability banking and clout. once you have the accounting the bankrupt facility and then dediminish the relevancy. wall street used to be fun. it was tribal and cultural and competitive and all that. but you made partners in 1975, congratulations you now own $6 billion in liability, don't screw it up. that culture is gone. >> gone. >> and just the concept of a syndicate of distributed risk, which was--i'll tell you, you talk to senior bankers on wall street who miss the good ol' days. there was a time when wall street was driven--grant it macho but opportunity-seeking culture. the opportunity was in the opportunity-seeking culture. that's gone. now the culture is on risk manufacturing and risk transfer. a

i also spoke with mike mayo, a banking analyst who covers j.p. has a cell rating on the bank, very critical of the bank. he said if this was the head of one of the other big banks they might be ousted for something like this. i think jpmorgan has a little more leeway because they've exceeded their peers. key question, is this bank too big to manage with $2 trillion in assets. that's a question. we'll sit in on the shareholder meeting, hear what people are asking. >> thank you, poppy. pop pi in tampa. you know what's interesting, jamie dimon has been a democrat, right? >> right. >> a few years ago he was whispered about as being a treasury secretary. maybe that would be the feather in his cap. just recently this week and also this weekend he was saying he's just barely a democrat at this point. he's is disturbed and disgusted by what he's seen in washington in general. i think he was somebody who the president was defending him on "the view" he says he's just barely a democrat. >> from a layman's perspective, this guy has a lot of power. >> he doe

we're going to hear mike mayo.that a lot of people are asking right now. >> this is kind of sensitive, but you pride yourself in the company on being great risk managers and this is a mistake and as you say you'll learn from that. but is there any sense that the mistake made in the cio office could also be in place elsewhere at jpmorgan? >> mike, we operate in risk business and obviously it puts egg on our face and we deserve any criticism we get. so feel free to give it to us and we'll probably agree with you. but we think we run a good company with good risk management. we are not in a business where we're not going to make mistakes. >> okay. going to make mistakes, egg on their face. i'm wondering if that's putting it too lightly for him. how big is this one? >> here's the problem is that the $2 billion isn't the issue. this is a unit that has $375 billion withholdings any given day. this is .5% at best of what they've got exposed. the issue is that when your models are wrong and you lose $2 billion, who is to s

mayo. i'm mike hydeck, thank you for joining us, happy friday, here's monika samtani and she will have trafficarty wise, mother nature had a party last night. thunder was rumbling here. >> you missed the party? >> monika was being woken up by the frogs in her neighborhood. >> anyone else have that problem? >> also hail? spots in eastern -- in spots in eastern virginia and the west virginia panhandle and today is a severe weather alert day because we're concerned with the threat of more thunderstorm later this -- severe thunderstorms later this afternoon and this evening. no problems through midday but past 3:00, 4:00 especially to the west with the storms developing. highs in the mid 80s even upper 80s in a couple of spots depending on how much sun we get. there were the storms last night. they were loud and bright and some torrential rains from that as well but they're gone now down to norfolk. this morning a little moisture coming to western west virginia. southwestern west virginia but all is quiet around here. no fog but with the lain last night a -- rain last night a little fog has develo

listen to a question from mike mayo last night. >> would this be a jp morgan specific issue?. just because we're stupid doesn't mean everybody else was. i have no other what other people are doing. >> dimon's assembled people, one he called an agregous mistake. on last night's call, dimon would pity single out one person. but losses were purely excootsed and badly monitored trades. jp morgan says a trader nicknamed the whale for his outsider trades and his boss, ina drew who runs the chief investment office are still with the firm. or does the company's chief financial officer, doug bronstein bare some blame. >> we're very confidentble with our exposures and feel very good about the operations of that business. >> comfortable, maybe. but people close to the back in lieu of losses on the trade. now this morning, foe cussing on the analysts and how it might impact overall profits as the bank overhauls its risk management structure. but the bank increases rivals. big bank crithices who say the firm should be paired back or shut down, likely to become more vocal in the coming day

the temperatures are in the 60s on this cinco de mayo, as you heard mike-m mention.e start to the day. it is a nice start. a few clouds out there. a shower this afternoon, but early this morning patchy fog. it is going be a very nice day. most of the showers rolled through here yesterday. they went past to the north and south of the area. north of the mason-dixon line, but for the most part, the status shower free throw the overnight hours. right now the temperatures in the 60s across the state. until you get out to cumberland and oakland. we are at 61 on ocean city. today? 79 degrees. fog is going to burn off, partly sunny with a shower this afternoon. lows around 58. with partly cloudy skies conditions. then the clouds break tomorrow. 72 degrees and a gorgeous sunday in store. the exclusive eye witness news first warning five-day forecast. >> thank you. >>> first, here's what people are talking about today. two women were shot inside of a church office, now they were trying to help the man who pulled the trigger. meghan mccorkell with more. >> reporter: good mornin

this saturday it is cinco de mayo celebrations at the laura's park. 67 degrees.,, [ banker ] mike and brenda found a house that they really wanted. i told you it was perfect for you guys. literally across the street from her sister. [ banker ] but someone else bought it before they could get their offer together. we really missed a great opportunity -- dodged a bullet there. [ banker ] so we talked to them about the wells fargo priority buyer preapproval. it lets people know that you are a serious buyer because you've been credit-approved. we got everything in order so that we can move on the next place we found. which was clear on the other side of town. [ male announcer ] wells fargo. with you when you're ready to move. >> one of the greatest linebackers in football history was found dead in his san diego home. police say that it appears to be a suicide. he was just 43 years old. his girlfriend found him unconscious with a gunshot wound to the chest and with a gun nearby. he was not able to be resuscitated. he retired in 2009 and played 20 season in the nfl. 12 * pro bowler known fo

mike. the usda gave us this answer. it says that open ketchup and cocktail sauce, chili sauce, will last up to six months in the 'fridge. mustard 12 months. that is a year. mayossings two months. foods like pickles and olives only two weeks. >> no. >> yes. usda says two weeks on those. that is a big surprise to me. >> so those pickles from last summer's barbecue? >> uh-huh. >> oh, my goodness. last question is about temporary tatoos. is henna a safe alternative for people who may not want a permanent tatoo? >> but they want a little something. we turned to the food and drug administration for this answer. it says henna, a coloring made from a plant is not approved for direct application to the skin. it is only approved for use as a hair dye. the fda has received reports of allergic reactions from products marketed as henna and due to these safety concerns the use of henna on the skin is actually, get this, illegal in the u.s. how about that? >>> if you have a question you'd like us to consider for ask liz send it to ask liz at nbc washington.com. you can also connect with me on twitter. just search liz crenshaw. and on facebook by searching liz crenshaw's con

mike huckabee now who is here this morning. in a few minutes is he going to quiz us on the cinco de mayo quiz first one of us will go to the dunkhis morning. interesting stuff coming out of the obama campaign and imaginary web woman. >> this is something her name is julia. sometimes company will do this to say perfect customer. julia, 35, two kids at home. this is what this seems like and they are sort of, i don't know, targeting her in some way? take us through this. >> well, first of all, quite appropriate we now find out that barack obama in his book dreams from my father that girl he described had such an influence she was a composite? is something the president has a history of. composite friends and composite girlfriends and campaign target. julia is this woman. whole life. she is a very lonely person. and if it weren't for barack obama and good old uncle sugar this would be the loneliest lady that ever lived in america. some republicans have come and taking handoutsouts from start o finish. look at it more individually. it starts with her being able to access head start program which helped kindergartners prepare for sch

mayo clinic. see the difference at avivausa.com. i've been crisscrossing the gulf i can tell you, down here,. people measure commitment by what's getting done. i'm mikeulf. the twenty billion dollars bp committed has helped fund economic and environmental recovery. another fourteen billion dollars has been spent on response and cleanup. long-term, bp's made a five hundred million dollar commitment to the gulf of mexico research initiative... to support ten years of independent scientific research on the environment. results will continue to be shared with the public. and we're making sure people know that the gulf is open for business - the beaches are beautiful, the seafood is delicious. last year, many areas even reported record tourism seasons. the progress continues, but that doesn't mean our job is done. bp's still here, and we're still committed to seeing this through. >> alisyn: five of the nation's largest banks paying out $2.5 billion to states en a mortgage fraud settlement. but instead of helping struggling homeowners about 7 states are using the cash to plug their budget shortfalls. how are they getting away with this? joining us now, rep