Malinvestment Staff Not Needed: JPMorgan to Layoff 10% of Perpetrators

JPMorgan is due to layoff about 3,000 folks from the investment banking business. Will they take a page from Citi and layoff more than expected when the announcement comes surfaces?



Reportedly this company will also freeze salaries for people who Obama considers rich, in the 60k range and higher. Loss of a high paying job or a frozen salary will both put a damper on the consumption scene of New York. The city will also be impacted in reduced tax collection, so expect to begin to see expanded cost cutting measures by the city.



Investment banking was the place to be for a short time. Where else could a person go to their desk and underperform their job meanwhile collect on high 6 and into 7 figures for salary plus bonus? These jobs are now gone and there's going to be no need for them to come back in the next economical upswing. Wonder what field many of those who came under the gun will move into?



In short, their job skill consisted of following a formula set forwards by the creative Ranieri which involved packaging up trash with several neighbors trash and marketing it as a bond. Meanwhile convincing some governments and financial institutes to invest in the bond and selling insurance against defaults on the bond that they could not cover and finding another insurer without enough money to cover the bond and dumb enough to underestimate risk on the bond and making an arbitrage spread.



Related:

Rainy Days: Ranieri Co-founded Bank Franklin Bank Saves No More Pennies

Lost Golden Boys: Goldman Sachs to cut 10%

Finance sector layoffs? Predictable as the sun rise.

Whoo Hoo ... I Mean D'oh!

In the surprise of the decade, failed consumer bank Washington Mutual, who earlier this year filed bankruptcy to become the nation's largest bank failure ever has filed a dubious report with Washington state's Employment Security Department announcing "an undisclosed number of layoffs" to take effect January 31st, 2009. The fact that no number was given, even an approximate, leads me to believe the number is very big and was not provided in order to keep the peace.

JP Morgan, the new proud owner of the failed institution has said that employees who will be put on the street January 31st will be notified by December 1st, 2008.

As JP Morgan re-tools WaMu to better fit their business, expect hefty layoffs from the salaried executives at HQ to be replaced by their contemporaries at Chase. Highly paid executives losing their jobs in large numbers could prove to be disastrous for retail in Seattle and surrounding suburbs if it materializes.

It turns out that greedily and recklessly lending money to people with bad credit and low income on speculation of a continutation of an asset class bubble and credit bubble can lead to ruination. Who'd have thought?

Washington Mutual is headquartered in Seattle, WA.

Related:
LowFi: Fidelity Back at "It", Further Reductions, Citi Under Siege: Citigroup Announced Layoffs Larger Than Expected