JPMorgan $2 billion trading loss dents teflon image

mlurp · #1 (**permalink**) 05-11-2012, 12:15 PM

I guess JP Morgan & Chase didn't learn much from the subprime chaos the top banks caused.

Quote:

JPMorgan $2 billion trading loss dents teflon image

By David Henry and Douwe Miedema | Reuters – 1 hour 10 minutes ago

NEW YORK/LONDON (Reuters) - JPMorgan Chase & Co's shock trading loss of at least $2 billion from a failed hedging strategy knocked financial stocks across the globe on Friday, as well as the reputation of the biggest U.S. bank by assets and its CEO Jamie Dimon.

For a bank lauded for navigating the fallout from the 2008 financial crisis without reporting a loss, the errors are embarrassing, especially given Dimon's criticism of the so-called Volcker rule to ban proprietary trading by big banks.

The debacle knocked 8 percent off JPMorgan's share price and prompted Dallas Federal Reserve Bank President Richard Fisher, who has called for the breakup of the top five U.S. banks, to say he is worried the biggest banks do not have adequate risk management.

"What concerns me is risk management, size, scope," he said in answer to a question about JPMorgan's trading loss. "At what point do you get to the point that you don't know what's going on underneath you? That's the point where you've got too big."

Dimon conceded the losses, which could rise by a further $1 billion, were linked to a Wall Street Journal report last month about London-based credit trader Bruno Iksil, nicknamed the 'London Whale', who, the paper said, amassed an outsized position which hedge funds bet against.

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JPMorgan $2 billion trading loss dents teflon image - Yahoo! Finance

2,059 Comments.

saltwn · #2 (**permalink**) 05-13-2012, 09:33 AM

JPMorgan Loses $2 Billion on Unit’s ‘Egregious Mistakes’ (Update 1)

Quote:

The firm’s chief investment office, run by Ina Drew, 55, took flawed positions on synthetic credit securities that remain volatile and may cost an additional $1 billion this quarter or next, Dimon told analysts yesterday. Losses mounted as JPMorgan tried to mitigate transactions designed to hedge credit exposure.

JPMorgan Loses $2 Billion on Unit?s ?Egregious Mistakes? - Bloomberg

Quote:

“There were many errors, sloppiness and bad judgment,” Dimon said as the company’s stock fell in extended trading. “These were egregious mistakes, they were self-inflicted.”

JPMorgan Chase CEO Jamie Dimon

More with video at NBC Nightly News NBC Nightly News with Brian Williams: News and videos from the evening broadcast- msnbc.com

These big banks need to be broken up. Dimon was a staunch advocate for NOT regulating risky bank trading.
Really, Dimon? you want us to bail y'all out again?" Kiss my grits!

mlurp · #3 (**permalink**) 05-17-2012, 12:58 PM

A lot of regulations today hamper job growth. But one area I have always wanted controlled better is the large banks that are to big to fail. In no time at all after being bailed out because of bad paper JP Morgan is in deep again with bad papers.

My bank has grown and I am told is one of the top 10 banks now. So I am splitting my $ with a smaller bank.

Quote:

JPMorgan's Trading Loss Is Said to Rise at Least 50%

By NELSON D. SCHWARTZ and JESSICA SILVER-GREENBERG | New York Times – 7 hours ago.. 17 May 2012

The trading losses suffered by JPMorgan Chase have surged in recent days, surpassing the bank's initial $2 billion estimate by at least $1 billion, according to people with knowledge of the losses.

When Jamie Dimon, JPMorgan's chief executive, announced the losses last Thursday, he indicated they could double within the next few quarters. But that process has been compressed into four trading days as hedge funds and other investors take advantage of JPMorgan's distress, fueling faster deterioration in the underlying credit market positions held by the bank.

A spokeswoman for the bank declined to comment, although Mr. Dimon has said the total paper trading losses will be volatile depending on day-to-day market fluctuations.

The Federal Reserve is examining the scope of the growing losses and the original bet, along with whether JPMorgan's chief investment office took risks that were inappropriate for a federally insured depository institution, according to several people with knowledge of the examination. They spoke on the condition of anonymity because the investigation is still under way.

The overall health of the bank remains strong, even with the additional losses, and JPMorgan has been able to increase its stock dividend faster than its rivals because of stronger earnings and a more solid capital buffer.

Still, the huge trading losses rocked Wall Street and reignited the debate over how tightly giant financial institutions should be regulated. Bank analysts say that while the bank's stability is not threatened, if the losses continue to mount, the outlook for the bank's dividend will grow uncertain.

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JPMorgan's Trading Loss Is Said to Rise at Least 50% - Yahoo! Finance

2,208 Comments.

faithful_servant · #4 (**permalink**) 05-17-2012, 02:06 PM

Quote:

Originally Posted by mlurp

I guess JP Morgan & Chase didn't learn much from the subprime chaos the top banks caused.

JPMorgan $2 billion trading loss dents teflon image - Yahoo! Finance

2,059 Comments.

"Hedge funds" - that means that if JPM lost $2 billion, somone else made $2 billion.

mlurp · #5 (**permalink**) 05-17-2012, 02:08 PM

Quote:

Originally Posted by faithful_servant

"Hedge funds" - that means that if JPM lost $2 billion, somone else made $2 billion.

True if it isn't just on paper.

saltwn · #6 (**permalink**) 05-17-2012, 02:11 PM

Quote:

Originally Posted by mlurp

True if it isn't just on paper.

And speculation is not something we want to cover with federal insurance. They wanna play big open market they need to put on their big boy britches and take the losses on their own.

faithful_servant · #7 (**permalink**) 05-17-2012, 02:17 PM

Quote:

Originally Posted by saltwn

And speculation is not something we want to cover with federal insurance. They wanna play big open market they need to put on their big boy britches and take the losses on their own.

Is this a policy that you're not too fond of, salty?? You do know who first started this whole process of protecting banks with tax dolllars, don't you?? No, it wasn't Reagan or Bush, so you can't blame them. It was your hero - FDR!!! He's the one who established the FDIC and every other Federally funded protection of the banking industry stems from that one decision.

mlurp · #8 (**permalink**) 05-17-2012, 02:17 PM

Quote:

Originally Posted by saltwn

And speculation is not something we want to cover with federal insurance. They wanna play big open market they need to put on their big boy britches and take the losses on their own.

I agree, NO MORE BAILOUTS!

saltwn · #9 (**permalink**) 05-17-2012, 05:08 PM

Quote:

Originally Posted by faithful_servant

Is this a policy that you're not too fond of, salty?? You do know who first started this whole process of protecting banks with tax dolllars, don't you?? No, it wasn't Reagan or Bush, so you can't blame them. It was your hero - FDR!!! He's the one who established the FDIC and every other Federally funded protection of the banking industry stems from that one decision.

The problem is, ff, banks that deal heavily in derivatives (bets) are swallowing up or merging with regular savings and checking banks. The law was meant to protect you and me not some guy who plays like he's at a casino.
They're working on getting something done about it and I hope it's solved soon or yes we will be bailing...
Trouble is the banks put money in both the political parties' coffers.

This is the big incentive for the occupy rallies.

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