Skip to comments.JP Morgan $2B Trading Loss Roils Markets, Raises Fears About Bank Risks
Posted on 05/11/2012 6:25:08 AM PDT by SeekAndFind
JP Morgan Chase & Co. is rocking the financial markets with the disclosure that its in-house trading operating lost $2 billion in the past six weeks, raising new questions about whether the big banks that caused the financial meltdown have sufficiently changed their ways.
Chief Executive Officer Jamie Dimon said the trading loss was an "egregious" failure in a unit managing risks, but he added in a call with analysts after the markets closed Thursday that just because the bank did something "stupid" that doesn't mean other firms are having such trouble.
"There were many errors, sloppiness and bad judgment," Dimon said. "These were grievous mistakes, they were self-inflicted."
Congress and the FDIC have been grappling with how to prevent "too big to fail" institutions from taking big risks knowing that the U.S. Treasury is there to back them up.
JPMorgan, the largest U.S. bank, traced its big loss to the firm's chief investment office, run by Ina Drew. His unit made losing bets on "synthetic credit securities" -- the same kind of instruments that nearly led to a collapse of the financial system in 2008, prompting a nearly $1 trillion govenrment bailout.
Global markets fell on Friday after the big surprise trading loss at JPMorgan Chase shook investor confidence, while political chaos in Greece continued to cast uncertainty over its future in the euro currency bloc.
JPMorgan stock plunged almost 7 percent in after-hours trading, and the unexpected loss at one of the world's most venerated banks undermined investor confidence. British banks were hit hard Barclays, which has a large investment banking arm, was the biggest loser in London trading, down 2.9 percent by midmorning.
(Excerpt) Read more at abcnews.go.com ...
Not to worry, to save us from any "risk" JP Morgan is deemed "too big to fail".
It will suck to be holding bank stock at this hour.
Congress, a member of the riskiest ventures ever to go broke by outspending what they take in.
They should take charge and show ALL those risk takers how it's done!
The whole country is insane, via the definition of doing the same thing over and over and expecting a different result each time.
True enough. But there are glimmers of... dare I say... hope.
Chief Executive Officer Jamie Dimon = Obama butt-boy
Might be a good time to buy, though.
OTOH, if there is a perception that this is not just a single really stupid move, but is systemic, it might not be a good time to buy.
They weren't mistakes, they were criminal negligence if not outright theft. People need to go to jail for this.
Let them experience reality. Lance the boil.
Part the big banks out on the auction block.
I haven’t followed this too closely. Do we know who the counter party/parties are in this? I have a suspicion that this is a Hillary cattle future deal, that JPM has given someone a huge windfall with the wink’n’nod expectation that they, JPM, will be made whole at the taxpayers’ expense. Thus, whoever the counterparty is gets a $2B dip into the taxpayers’ purse.
Did you know Ray? I did not. That show was in my planner, but something came up that day. I’m glad I missed it.
Okay, I used to work MSP, then TUL, OSH and am presently at SAV.
One of the conditions of bailouts, either by the FDIC or Congress (they appear to be inevitable, given the corruption in Washington) is that the CEO and half, if not all, of the Board of Trustees lose their jobs, with no severance pay.
Lots of blocks in the way with that, given the above corruption and the fight over abrogating severance contracts, but it sure as hell would put a chill on things, even if the banks were still inclined to gamble. Their shareholders seem to be ineffective/uncaring about cleaning house.
Lost $2,000,000,000 in just six weeks.
Sounds a lot like MF Global.
They lost 1,600,000,000 and close to that time, obama bragged that he had raised about that amount for his campaign.
Wasn’t JP Morgan chase one of the banks that was too big to fail and taken over by the commiecrats?
Bet the missing money is never found just like MF Global.
And no one is held responsible either.
Just ask John Corzine.