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BREAKING NEWS FROM CNBC’S KATE KELLY: JPMORGAN HAS SOLD OFF 65-70% OF LOSING LONDON WHALE POSITION

When: Today, Wednesday, June 20, 2012

Where: CNBC’s “Squawk on the Street

Following is the unofficial transcript of breaking news from CNBC’s Kate Kelly. All references must be sourced to CNBC.

KATE KELLY: THANKS SO MUCH, MELISSA. SO SOME NEWS THAT WOULD APPEAR TO BE FAVORABLE FOR JPMORGAN THIS MORNING, I UNDERSTAND THAT THEY HAVE MANAGED TO SELL OFF BETWEEN 65 AND 70 PERCENT OF THEIR BIG LOSING LONDON WHALE POSITION. NAMELY THAT CDX IG9 INDEX, ESSENTIALLY IS IT A CORPORATE DEBT INDEX AND INVESTMENT GRADE SLICE OF IT WITH A 10 YEAR MATURITY, AND THEY WERE VERY LONG THIS INDEX. THIS WAS SORT OF THE MAJORITY OF THIS POSITION THAT ULTIMATELY LOST MONEY AND WITHIN THE LAST THREE OR FOUR WEEKS THEY’VE BEEN ABLE TO SELL DOWN MORE THAN TWO-THIRDS OF IT. THIS IS SINCE THEY MADE A CHANGE OF LEADERSHIP IN THE CIO OFFICE. THE MARKET VERY TALKATIVE ABOUT THIS THIS MORNING PART OF IT IS THAT THE DTCC RELEASED SOME DATA WITHIN THE PAST DAY OR SO SHOWING THAT THERE HAS BEEN A LOT OF ACTIVITY AROUND THIS I BELIEVE IT IS 31 BILLION IN NOTIONAL VALUE SO A LOT OF TALK IN THE MARKET ABOUT IT THIS MORNING. OF COURSE THE MARKETS MOVED AGAINST JPMORGAN INITIALLY, MADE IT VERY DIFFICULT FOR THEM TO SELL OUT OF THIS AT A REASONABLE PRICE BUT THEY’VE BEEN DOING WHAT THEY CAN OVER THE PAST MONTH OR SO TO DO SO AND OF COURSE IT IS STILL IN PROGRESS SO I’M SURE WE WILL GET MORE DETAILS.

DAVID FABER: KATE, IT IS DAVID WE ARE WATCHING JPMORGAN SHARES ACTUALLY RISING PRE-MARKET HERE ON YOUR REPORT BUT I AM CURIOUS, DO WE HAVE ANY SENSE AS TO WHAT THE LOSS THEN WILL REALLY BE GIVEN AT THIS POINT AT LEAST THAT THEY ARE ALMOST CLOSE TO DONE EXITING THE POSITION?

KATE KELLY: WELL THAT OF COURSE IS THE MULTI-BILLION DOLLAR QUESTION DAVID. I MEAN JAMIE DIMON HAS NOT REALLY DEVIATED FROM THE INITIAL ESTIMATE OF YOU KNOW AT LEAST $2 BILLION, $2 BILLION OR MORE. OF COURSE, WE’VE ALL SEEN REPORTS SAYING $3 BILLION UP TO $5 BILLION UP TO $6 BILLION. THEY HAVEN’T REALLY ADDRESSED THE QUALITY OF THOSE NUMBERS BUT YOU KNOW LISTEN THERE WERE PEOPLE ON DAY TWO AFTER THE THURSDAY AFTERNOON ANNOUNCEMENT OF THIS INITIAL LOSS THAT WERE TELLING ME THE MARKETS MOVED AWAY FROM THEM TO THE TUNE OF ANOTHER BILLION DOLLARS ON DAY ONE. OTHER PEOPLE HAVE TOLD ME THAT’S OVERBLOWN BUT I THINK WE CAN ASSUME WE ARE TALKING ABOUT A MULTI-BILLION DOLLAR PROBLEM HERE AND NOT JUST TWO. I MEAN I’M SURE IT COULD REACH THE THREE, FOUR, FIVE. WE JUST DON’T KNOW UNTIL WE GET A BETTER SENSE BUT IF THEY HAVE BEEN ABLE TO SELL OFF THE MAJORITY OF THIS POSITION AND I’M TOLD THAT THIS PARTICULAR POSITION WAS REALLY THE GUTS OF THE TRADE OF COURSE THERE WERE OTHER ASPECTS TO IT AND THERE WERE SHORT POSITIONS AS WELL BUT THIS LONG POSITION WAS THE GUTS OF IT AND IF THEY ARE LARGELY OUT OF IT THEY ARE IN A PRETTY GOOD PLACE RIGHT NOW.

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