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5 Things to Watch for in JPMorgan Chase Earnings

Stocks in this article: JPMWFC

The complaint alleged that Bear Stearns failed to evaluate the quality of the mortgage loans packaged into mortgage backed securities costing investors $22.5 billion in losses to date.

The complaint, however, does not mention damages sought. JPMorgan has said it would fight the charges.

The issue is likely to be front and center at the analyst conference call.

Speaking at the Council for Foreign Relations on Wednesday, Dimon said that the Bear Stearns acquisition has cost the bank $5 billion to $10 billion in various expenses till date. He said that the bank did the Fed a "favor" when it took over Bear Stearns in 2008 and argued that it was "unfair" that regulators were coming after them now.

"I'm a big boy. I'll survive...But I think the government should think twice before they punish business every single time things go wrong," Dimon said, according to a Reuters report .

Mortgage Putback Risks: Investors continue to demand that banks repurchase souring mortgage backed securities sold during the boom, alleging that banks misrepresented the quality of the underlying loans that were pooled into the securities.

JPMorgan has maintained that claimants face significant hurdles in litigation given that their disclosures were clear and investors were sophisticated.

Still, as The Street's Philip Van Doorn reports, JPMorgan faces significant putback risk . The company reported that as of June 30, there was $149 billion remaining in mortgage loans securitized from 2005 to 2008, and $47 billion of that total was past due 60 days or more, with $16 billion of the problem loans originated by Washington Mutual. JPM said that its "recognized mortgage repurchase liability" as of June 30 was $3.3 billion, declining from $3.6 billion as of Dec. 31."

Is the Whale Now a Small Fish?: Analysts will look for an update on the winding down of the ill-fated derivative trades by a trader nicknamed the London Whale. JPMorgan has so far booked $5.8 billion in losses in the first half of the year.

The bank has said that it is possible that a portion of the positions transferred to the investment bank could suffer additional losses between $800 million and $1.7 billion under "extreme" simulated scenarios.

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