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JP Morgan`s Big Loss; Flesh-Eating Bacteria
Aired May 15, 2012 - 04:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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CARL AZUZ, HOST, CNN STUDENT NEWS: Coming to you from the CNN Newsroom in Atlanta, I`m Carl Azuz. This is CNN Student News. It`s Tuesday, May 15th, and those of you in Nebraska and Oregon might have the primary focus today. The race for the White House, those two states are taking their turn in the U.S. political spotlight, holding presidential primary elections.
But we`re going to get started with a headline from Wall Street. JPMorgan is one of these largest banks in the United States. In the last six weeks, one of its departments lost $2 billion. Now right off the bat, we want to say this not mean that JPMorgan is going out of business. It`s not even close. The bank made more than $5 billion in the first three months of this year.
Still, the news of this loss is hitting the financial industry pretty hard. And some members of Congress are talking about holding hearings to consider whether there might need to be more government regulations, more government control of banks.
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AZUZ (voice-over): Experts consider JPMorgan one of the most secure banks in the U.S. There`s a division that`s responsible for making investments that are designed to protect the bank in case any of its other investments lose money. But it turns out that the protection that JPMorgan was getting was just as risky. The protection investments tanked and that`s what led to the $2 billion in losses.
This is Ina Drew. She was JPMorgan`s chief investment officer and she was in charge of the unit that lost that money. Drew had been with the bank for more than 30 years. Yesterday, she announced she`s retiring.
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AZUZ: Mary Snow now looks at how the bank`s leaders and some financial analysts reacted to all of this news.
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MARY SNOW, CNN CORRESPONDENT (voice-over): JPMorgan Chase`s CEO Jamie Dimon waited until after the markets closed Thursday to make the stunning announcement that the bank lost $2 billion this quarter, a loss he blames on sloppiness and bad judgment.
JAMIE DIMON, CEO, JPMORGAN: These were grievous mistakes. They were self-inflicted. We`re accountable and what happened violates our own standards and principles by how we want to operate the company. This is not how we want to run a business.
MIKE MAYO, BANK ANALYST: I cannot believe that a CEO of respect as much as Jamie Dimon, who a month earlier said everything was fine, said, whoops, we got it wrong.
SNOW (voice-over): Bank analyst Mike Mayo, the author of "Exile on Wall Street" says while the losses at JPMorgan Chase aren`t life- threatening to the bank, it raises much larger concerns.
MAYO: The question is, are these big banks, including JPMorgan, too big to manage? They were taking actions to protect the company and they lose money. It`s as if I went out and took insurance out on my house and a month later I say, whoops, I lost $100,000 on the insurance policy. If you`re doing something to protect yourself, how do you lose money? People are still scratching their heads.
SNOW (voice-over): That head-scratching focuses on the banks` chief investment office in London. That`s where one trader in particular was taking such large insurance-like bets that he gained the nickname "The White Whale." And it involved complex trading instruments that are similar to the ones that triggered economic chaos in 2008.
University of Maryland Professor Cliff Rossi, who managed risk at major banks, says because of the complexity of this business, it can`t be fully regulated.
CLIFFORD ROSSI, UNIVERSITY OF MARYLAND: There will always be areas, dark areas of the market and shadowy areas, if you want to call it that, that will remain very murky and very difficult to exactly know until a time like this arises when the other shoe falls, and now, you`ve got a problem.
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UNIDENTIFIED MALE: Is this legit? The Eastern Pacific hurricane season begins on June 1st.
Nope. That`s when the Atlantic hurricane seasons starts. In the Eastern Pacific, hurricane season begins today.
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AZUZ: The thing is, nature doesn`t always pay attention to that calendar. Storms can form outside of hurricane season, and out on the Pacific Ocean, one decided to get a jump on things this week.
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AZUZ (voice-over): Say hello to the first tropical depression of 2012. It formed one day before the start of the season. Won`t be given a name unless it strengthens into a tropical storm. That`s the stage before a storm becomes a hurricane. This tropical depression formed west of Mexico. It was heading farther out into the Pacific, so experts said not likely a threat to any land areas.
It`s a very different story in Arizona, though. That`s where a series of wildfires are threatening several areas. Officials are keeping an eye on different fires around the state. The biggest one as of yesterday was in a national forest there.
But the one causing the most concern is this blaze. It`s called the Gladiator Fire. It`s just a few miles north of a mining community that`s home to about 350 people. Officials were telling everyone they needed to leave their houses, but only a few actually had done that by Monday morning. Altogether, these wildfires have scorched more than 5,000 acres across Arizona.
On the other side of the country, the space shuttle Enterprise is gradually making its way to its new home. The shuttle flew on the back of a jet up to New York late last month. This weekend it was transferred to a ferry that`ll take it to a museum on the Intrepid aircraft carrier.
Interesting trivia about this shuttle: Enterprise was NASA`s original space shuttle. It was used for a series of tests, but it never actually went into space.
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UNIDENTIFIED FEMALE: See if you can ID me. I`m a type of organism that lives just about everywhere on Earth. For the most part, I`m harmless. But sometimes I cause disease in people, plants or animals. You can only see me with a microscope.
I`m bacteria and I was first discovered in the late 1600s.
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AZUZ: Some bacteria can be helpful. For example, we all have bacteria in our bodies that help us digest food. But one kind of bacteria inside Aimee Copeland has the 24-year old fighting for her life.
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AZUZ (voice-over): What Copeland is struggling with is a form of flesh-eating bacteria that she got earlier this month. A homemade zip line broke while Copeland was on it. She cut open her leg and needed 22 staples to close it. But the pain didn`t get any better.
Doctors say Copeland`s wound got infected and the infection became virulent. It spread quickly and dangerously. She`s already lost a leg and part of her abdomen to the flesh-eating bacteria. She could lose her fingers as well.
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AZUZ: Aimee`s family says that despite her medical crisis, she`s trying to keep her spirits up. Elizabeth Cohen has more details on this disease, how rare it is and some warning signs that people can watch out for.
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ELIZABETH COHEN, SR. MEDICAL CORRESPONDENT: The disease Aimee has is called necrotizing fasciitis, which is a fancy way of saying flesh-eating bacteria.
Many different kinds of bacteria can cause this disease. She, unfortunately, got infected with a particularly virulent kind of bacteria that lives in the water. Now, this is pretty rare. We don`t have exact numbers. No one really knows. But it is really unusual.
But, unfortunately, the small number of people who do get this disease, about 25 percent of them die. Now, it took doctors a while to figure out that Amy had this disease, and that`s not unusual. The signs can be very subtle. So, Amy went to the hospital about four times before they figured out what this was. She was prescribed one antibiotic that wasn`t strong enough to fight this kind of bacteria at one point.
She was also prescribed a painkiller at one point. What she really needed was a much stronger antibiotic, which she did eventually get. But let`s talk a little bit, because people get cuts all the time. Any cut can become infected. And, theoretically, any cut could become infected with a bacteria that can cause necrotizing fasciitis.
So, how do you know the difference? Let`s take a look at this. If you have a cut in your skin and the pain is disproportionate to the cut, in other words, if the cut isn`t really all that big, but you`re in terrible, horrible pain, or if the pain extends to not just to the area of the cut, but also that whole region of the body, that could be a much more serious thing than just a simple skin infection.
Also, if you have fever or weakness, that`s a sign of something more serious. And swelling and especially dark marks in that area, both of those can be signs that this is something serious. And if this feels to you like something more than just a cut on the skin, you definitely want to make that point with the doctor that you see that this is unusual for you and feels like it might be quite serious.
AZUZ (voice-over): All right. From that story in Georgia to the wildfires in Arizona, to the primary states we mentioned at the beginning of today`s show, we`ve been crisscrossing the country. You can always count on our downloadable maps to help students pinpoint locations in the news. They`re totally free. You can find them every day at cnnstudentnews.com.
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AZUZ: Finally, today we have a story you can seek your teeth and your wallet into.
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AZUZ (voice-over): When it comes to the world`s most expensive hot dogs, this one`s the "wiener." Might not look all that fancy, but the thing is made with a quarter pound of premium beef and it`s topped with lobster tail and gold flakes. The winning bid was $1,501, which set a world record. The guy who cooked up the idea and the dog was raising money for a local charity.
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AZUZ: He actually sold four of the pricy hot dogs. It`s a good thing he made extras, because we wouldn`t want any beef between his customers. They "must-ard" there was a world record happening and relished the opportunity to be a part of it. Hot dog jokes: all "over-bun" but we`ll "ketchup" with you tomorrow on CNN Student News.
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