People are still talking about JPMorgan's disclosure in a recent 10q that it lost about $1.5 billion due to collateralized debt obligations. A MarketWatch columnist notes that the loss occurred in the month after the bank announced a $2 billion quarterly profit. Is this cause for concern? Well, as we've noted, the bank has an $19.5 billion exposure in Alt-A mortgages, $1.9 billion in subprime mortgage exposure and an $11.6 billion exposure in commercial mortgage-backed securities. It's unclear how much of this the bank has already written off, but it's fair to say that not all of it has been. We've noted that Alt-A and commercial-backed could pose some issues for holders; they may be poised for a big tank. The bank is apparently hedged, but such hedges can easily fail, resulting in losses. What if the securities rally? There's definitely plenty of reason to be wary.

For more:
- here's the MarketWatch column [1]

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Third-quarter earnings to be weak? [2]