Morning Business Memo
Until late last week JP Morgan Chase CEO Jamie Dimon was Wall Street’s golden boy: the man who led the banking industry’s resistance to stricter government oversight. Today Dimon is facing pressure from Congress and shareholders after the firm’s shocking $2 billion trading loss on risky derivatives. Three high ranking officials at JP Morgan Chase are expected to resign this week. They include Ina Drew, who leads the firm’s risk management group. Last year she earned $14 million and is one of Dimon’s top executives. Some shareholders groups want Dimon’s power to be reduced along with the appointment of an independent chairman. More than three years after the financial industry almost collapsed, the huge trading loss has been seized on by critics as proof that big banks still do not understand the threats posed by their own speculation.
The cost of gasoline may continue to tumble from recent highs. The US Energy Department releases its latest weekly gasoline price report today. Global oil prices fell below $95 today. Global investors are concerned about the impact weaker growth in China and a recession in Europe.
Your 401(k) may be losing value. Stock futures fell again this morning, largely because of fresh worries about Europe’s debt crisis. The S&P 500 is at its lowest level in more than two months, although still up for the year. Party leaders in Greece continue power-sharing talks as they struggle to agree on a new coalition government. Fresh elections could threaten the international bailout. Major European stock averages are down about 2 percent this morning. Spain managed to sell nearly $4 billion in short term government debt this morning, but investors demanded higher yields.
Scott Thompson is the third CEO in three years to be forced out at Yahoo. Thompson claimed a college degree he never got. Yahoo still has to convince its restless shareholders and demoralized employees that the turnaround work started during Thompson’s tumultuous four-month stint as CEO won’t be wasted.
Richard Davies Business Correspondent ABC NEWS Radio ABCNews.com twitter.com/daviesabc