by Calculated Risk on 8/11/2008 11:23:00 PM

From the Financial Times: JPMorgan struck by $1.5bn writedown (hat tip Geoffrey)

In a regulatory filing, JPMorgan said since the beginning of July, trading conditions in the mortgage market “had substantially deteriorated . . . causing the company to incur losses” of $1.5bn, excluding hedges.

Bankers said July was the worst month for mortgage-backed bonds since the beginning of the crisis, as a combination of cut-price sales and waning demand from large investors helped to depress prices.

... people close to the company said it had been forced to write down the value of its $33bn in mortgage-backed securities as prices continued to drop in July.

They said the writedowns were partly driven by Merrill Lynch’s decision to sell $6.7bn in toxic securities ... for just 22 cents on the dollar.

Here is the full quote from the SEC filing:

For the third quarter to date, trading conditions have substantially deteriorated versus the second quarter. In particular, spreads on mortgage-backed securities and loans have sharply widened causing the company to incur losses (net of hedges) of approximately $1.5 billion for the quarter to date.

The confessional is still busy ...