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JPMorgan Chase acknowledges $2B loss in trading portfolio
New York Daily News ^ | Thursday, May 10, 2012, 11:34 PM | (Via Associated Press)

Posted on 05/10/2012 8:58:15 PM PDT by Olog-hai

JPMorgan Chase, the largest bank in the United States, said Thursday that it lost $2 billion in the past six weeks in a trading portfolio designed to hedge against risks the company takes with its own money.

The company’s stock plunged almost 7% in after-hours trading after the loss was announced. Other bank stocks, including Citigroup and Bank of America, suffered heavy losses as well.

“The portfolio has proved to be riskier, more volatile and less effective as an economic hedge than we thought,” CEO Jamie Dimon told reporters. “There were many errors, sloppiness and bad judgment.”

The trading loss is an embarrassment for a bank that came through the 2008 financial crisis in much better health than its peers. It kept clear of risky investments that hurt many other banks.

The loss came in a portfolio of the complex financial instruments known as derivatives, and in a division of JPMorgan designed to help control its exposure to risk in the financial markets and invest excess money in its corporate treasury. …

(Excerpt) Read more at nydailynews.com ...


TOPICS: Business/Economy; Crime/Corruption; Miscellaneous; News/Current Events
KEYWORDS: bigloss; jpmorgan; jpmorganchase; loss

1 posted on 05/10/2012 8:58:17 PM PDT by Olog-hai
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To: Olog-hai
I freely admit I am completely ignorant of what after-hours trading means unless it is that you lost my investments in a poker game....
2 posted on 05/10/2012 9:09:56 PM PDT by bigheadfred (MY PET TAPEWORM (OBIWAN) IS AN INSANE MILITARY HATING LEFTIST)
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To: Olog-hai

” The loss came in a portfolio of the complex financial instruments known as derivatives, and in a division of JPMorgan designed to help control its exposure to risk..”

LOL!!


3 posted on 05/10/2012 9:11:17 PM PDT by stephenjohnbanker (God, family, country, mom, apple pie, the girl next door and a Ford F250 to pull my boat.)
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To: Olog-hai

Never before has Wall Street been so able to do whatever they want, with no one paying attention.


4 posted on 05/10/2012 9:13:32 PM PDT by nickcarraway
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To: Olog-hai
For Wall Street, there is no risk. They know that taxpayers will be made to bail them out.
5 posted on 05/10/2012 9:15:32 PM PDT by Major Matt Mason ("Journalism is dead. All news is suspect." - Noamie)
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To: bigheadfred
I freely admit I am completely ignorant of what after-hours trading means unless it is that you lost my investments in a poker game....

LMAO!
I saw that phrase and wondered exactly the same thing.

6 posted on 05/10/2012 9:19:14 PM PDT by Lancey Howard
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To: Olog-hai

JPM can borrow for 0% the money that we borrowed at 2-3 percent. Then they can loan it back to us for another 2-3 %.

With a game like that then what do they have to worry about.


7 posted on 05/10/2012 9:22:00 PM PDT by Revel
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To: stephenjohnbanker

“The loss came in a portfolio of the complex financial instruments known as derivatives...”

What is that word Obama uses whenever something bad happens that Conservatives can see coming but he can’t? Unforeseen?

Except that doesn’t sound right - having a brain fart at the moment.


8 posted on 05/10/2012 9:23:00 PM PDT by 21twelve
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To: stephenjohnbanker

The banks get dollars at or near 0% but they have to control risk. Whole lot of plate spinning going on. I’m thinking the entire banking system is engaged in something like a fraudulent conveyance. Us Muppets pay for it on a time delay through taxation, austerity, and inflation. I know this isn’t an original idea but it just all of a sudden made sense to me.


9 posted on 05/10/2012 9:34:57 PM PDT by Stentor ("All cults of personality start out as high drama and end up as low comedy.")
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To: 21twelve

unexpected/ly.


10 posted on 05/10/2012 9:38:34 PM PDT by Outraged Infidel
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To: Major Matt Mason

This is an election year, and another economic bank related meltdown is simply not possible. The MESSIAH must not be harmed by bad economic news.

Expect the unexpected....

The FED must step in to restore confidence and hide all problems. Expect the talking about gay marriage to ratchet up 4-5 notches to cover it.


11 posted on 05/10/2012 10:06:12 PM PDT by tcrlaf (Election 2012: THE RAPTURE OF THE DEMOCRATS)
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To: Stentor; Grampa Dave; tubebender; calcowgirl; NormsRevenge; Amerigomag; bruinbirdman
A lot of people get mislead when the former line between retail banks and investment banks gets blurred. The Glass Steagal act from the 1930's to correct this confusion was rescinded by Bill Clinton's pen. The bank lobbyist finally convinced the Senate and house banking committees that such a distinction between banking functions within the same corporation was completely out moded.

Now, as many of us howled at the time, the roosters have come home to roost and the roster in CONgress is still filled with too many of the creeps that let it happen... Like Lugar and Hatch (for instance) who've been there way too long!!! (and of course Dodd and Frank)

12 posted on 05/10/2012 10:12:07 PM PDT by SierraWasp ("GovernMental austerity first, THEN conservative prosperity!!! Austerity breeds properity!!!)
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To: 21twelve

Essays on Political Economy. (by M. Frederic Bastiat, prior to 1874)

http://www.gutenberg.org/files/15962/15962-h/15962-h.htm

“That Which Is Seen, and That Which Is Not Seen.”

In the department of economy, an act, a habit, an institution, a law, gives birth not only to an effect, but to a series of effects. Of these effects, the first only is immediate; it manifests itself simultaneously with its cause—it is seen. The others unfold in succession—they are not seen: it is well for us if they are foreseen. Between a good and a bad economist this constitutes the whole difference—the one takes account of the visible effect; the other takes account both of the effects which are seen and also of those which it is necessary to foresee. Now this difference is enormous, for it almost always happens that when the immediate consequence is favourable, the ultimate consequences are fatal, and the converse. Hence it follows that the bad economist pursues a small present good, which will be followed by a great evil to come, while the true economist pursues a great good to come, at the risk of a small present evil.

In fact, it is the same in the science of health, arts, and in that of morals. If often happens, that the sweeter the first fruit of a habit is, the more bitter are the consequences. Take, for example, debauchery, idleness, prodigality. When, therefore, a man, absorbed in the effect which is seen, has not yet learned to discern those which are not seen, he gives way to fatal habits, not only by inclination, but by calculation.

This explains the fatally grievous condition of mankind. Ignorance surrounds its cradle: then its actions are determined by their first consequences, the only ones which, in its first stage, it can see. It is only in the long run that it learns to take account of the others. It has to learn this lesson from two very different masters—experience and foresight. Experience teaches effectually, but brutally. It makes us acquainted with all the effects of an action, by causing us to feel them; and we cannot fail to finish by knowing that fire burns, if we have burned ourselves. For this rough teacher, I should like, if possible, to substitute a more gentle one. I mean Foresight. For this purpose I shall examine the consequences of certain economical phenomena, by placing in opposition to each other those which are seen, and those which are not seen.

Foresight is necessary for good leadership. Name a POL who has that, or the character and honesty that allows “foresight” to be developed.


13 posted on 05/10/2012 10:19:12 PM PDT by Texas Fossil (Government, even in its best state is but a necessary evil; in its worst state an intolerable one)
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To: SierraWasp
BofA Said to Split Regulators Over Moving Merrill Derivatives to Bank Unit

Don't worry. The FDIC will cover it.

14 posted on 05/10/2012 10:20:57 PM PDT by Stentor ("All cults of personality start out as high drama and end up as low comedy.")
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To: Outraged Infidel

THANK YOU!

(I also ruin lots of jokes by forgetting the punch line!)


15 posted on 05/10/2012 10:25:17 PM PDT by 21twelve
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To: SierraWasp
'rescinded by Bill Clinton's pen. '

And, overwhelming supported by the Dems and GOP.

16 posted on 05/10/2012 10:27:28 PM PDT by Theoria (Rush Limbaugh: Ron Paul sounds like an Islamic terrorist)
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To: Texas Fossil

Thanks for a great essay. The concept of “knee jerk” liberals fit right in with his thoughts. (”Poor people? Raise the minimum wage!!!”) along with 999 other similar thoughts and actions.

“Name a POL who has that, or the character and honesty that allows “foresight” to be developed.”

I think Palin has it.


17 posted on 05/10/2012 10:31:25 PM PDT by 21twelve
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To: bigheadfred
I freely admit I am completely ignorant of what after-hours trading means

Even when the market in America has ceased for the day, it's still going on in other parts of the world. London. Tokyo. Singapore. Trading takes place twenty-four hours a day somewhere on earth. That's why your stock might close at 'X' when you go to sleep, but be lower when you wake up.

18 posted on 05/10/2012 10:40:00 PM PDT by LouAvul
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To: 21twelve

Yep, and Palin is a private citizen now, not a POL.

She still carries great influence.

There is much more in Bastiat’s essay, I only excerpted 3 paragraphs.

He fully understood Socialist. Even prior to 1874 he understood why Socialism and Socialists fail. They ALWAYS FAIL.


19 posted on 05/10/2012 10:47:47 PM PDT by Texas Fossil (Government, even in its best state is but a necessary evil; in its worst state an intolerable one)
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To: Lancey Howard

There are many exchanges. Ones that trade Chase after the NYSE closes are called...


20 posted on 05/10/2012 10:58:39 PM PDT by Domangart
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To: LouAvul; bigheadfred
"I freely admit I am completely ignorant of what after-hours trading means "

"Even when the market in America has ceased for the day, it's still going on in other parts of the world."

At the end of the day mutual funds have to settle out, also, buying and selling.

Then the DOW never opens at the same price it closes, yet it only reflects American prices? In fact the opening price reflects the first transactions of each component after the market opens. If it takes a minute or two for each of the 30 DOW Industrials to transact, there is no price for a minute or two.

Now, that opening transaction will surely reflect overnight trading prices.

yitbos

21 posted on 05/10/2012 11:43:56 PM PDT by bruinbirdman ("Those who control language control minds." -- Ayn Rand)
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To: Olog-hai

if government is willing to loan you a billion dollars at 0% interest rate, would you take it? I take as many billions as they’re willing to give me, because however the loan turn out I end up the winner


22 posted on 05/11/2012 12:56:17 AM PDT by 4rcane
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To: 4rcane

Just be careful though. After about the tenth loan they MIGHT get wise that you are using much of that loan to pay off the earlier loans.


23 posted on 05/11/2012 1:09:14 AM PDT by 21twelve
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To: nickcarraway

not all. just the big banks


24 posted on 05/11/2012 1:18:36 AM PDT by wiggen (The teacher card. When the racism card just won't work.)
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To: tcrlaf

two billion to JPM is two bucks to you and i.


25 posted on 05/11/2012 1:19:41 AM PDT by wiggen (The teacher card. When the racism card just won't work.)
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To: wiggen

PARIS (Reuters) - Stock index futures were down on Friday, pointing to a lower open on Wall Street, after JPMorgan Chase & Co stunned investors with news of “significant mark-to-market losses” that it said could “easily get worse.”


26 posted on 05/11/2012 3:10:11 AM PDT by John W (Viva Cristo Rey!)
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To: Olog-hai

My understanding is that they lost 2 billion in just 6 weeks.

Who is minding the store there?

Is obama about to “find” a whole new pile of cash in their reelection fund?

Don’t forget, all the bucks from MF Global still havent been found and no one has been held accountable.


27 posted on 05/11/2012 4:29:41 AM PDT by Texas resident (November 6 - Vote Against obama)
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To: nickcarraway

Actually, they’ve been doing pretty much whatever they want all along; it’s just never been this obvious before.


28 posted on 05/11/2012 4:33:38 AM PDT by liberalh8ter (If Barack has a memory like a steel trap, why can't he remember what the Constitution says?)
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To: nickcarraway

They’ve been able to do what they want since the repeal of Glass-Steagall. The fact that they’re powerful enough (read: they can buy enough politicians) to prevent the re-instatement of that law and the creation of further regulations to keep up with the financial unicorns, I’m sorry, products, they invent out of thin air is what’s appalling, but not suprising. Since the “financial crisis”, the big banks are bigger than before, and the derivatives market is as well. They’ll tank again, and we’ll bail them out again. That cycle will repeat until they go down so hard we can’t bail them out, and then we’ll be in another Great Depression, scratching our asses wondering how anybody could let that happen. But hey, at least we’ll be “pro-business” until then, free of pesky banking regulations that are anathema to our way of life.


29 posted on 05/11/2012 6:36:02 AM PDT by Wolfie
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To: SierraWasp

3.37(8.27%) 10:43AM EDT - Nasdaq Real Time Price

http://finance.yahoo.com/echarts?s=JPM+Interactive#symbol=JPM;range=5d


30 posted on 05/11/2012 7:44:47 AM PDT by Grampa Dave (ILLEGAL IMMIGRATION IS DESTROYING AMERICA-LOOK AT WHAT IT DID TO THE WHITE HOUSE!)
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To: Wolfie; liberalh8ter

Jon Corzine just stole billions of dollars. That’s not capitalism. There is supposedly a group protesting Wall Street, and they have never once mentioned him.


31 posted on 05/11/2012 11:38:38 AM PDT by nickcarraway
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To: nickcarraway

No, it’s not capitalism and neither was Madoff. One need look no further than the Chicago Carbon Exchange to see how ridiculous the market has become; the sanctioned trading of carbon credits......fairy dust. Thank goodness that was nixed. Apparently, we haven’t learned anything from credit default swaps.


32 posted on 05/11/2012 1:06:08 PM PDT by liberalh8ter (If Barack has a memory like a steel trap, why can't he remember what the Constitution says?)
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To: Olog-hai

“Mistakes were made.”


33 posted on 05/11/2012 1:06:30 PM PDT by dfwgator (Don't wake up in a roadside ditch. Get rid of Romney.)
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To: nickcarraway

The beauty of the con is that that we only acknowledge the “other side’s” transgressions. So everybody gets away with it.


34 posted on 05/11/2012 1:26:08 PM PDT by Wolfie
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