Sadly, JPM is not likely to "lose" much in this affair. I’ve been diligently reading the valuable information posted by many here for many months, and there’s a lot of well-founded anger about what has happened. But the comments below are about what is likely to happen in the future, not what has already happened. Consider the following scenarios:
1) If JPM/FDIC win (let’s hope not) then the FDIC has enabled JPM to steal approximately $42 billion (See post #138706).
2) If JPM/FDIC settle at some negotiated estimate of approximate fair market value (probably the most likely outcome), at worst JPM will have paid market value (exactly what they should have paid) for the assets they coveted anyway -- i.e., significant market share of the retail banking industry in the west. Furthermore, JPM may recover some of that price from the FDIC.
3) If a settlement includes damages, the price to JPM will likely be mitigated by its agreement with the FDIC to be held harmless – part of the Sept. '08 purchase agreement. That will set off a battle between JPM and the FDIC. The FDIC may argue that its share of the cost should only be any amount over the fair market value, because by paying fair market value, JPM has not been harmed. However, JPM’s counter could be that the FDIC did not have to accept the low-ball bid in September 2008.
Overall, the only way JPM or its leaders are likely to suffer is if criminal wrongdoing is uncovered. Thus, IMHO (supporting many on this board) JPM will be highly motivated to work out some kind of settlement that includes burial of conspiracies.
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