J.P. Morgan Flags $2 Billion Trading Loss

J.P. Morgan Flags $2 Billion Trading Loss

online.wsj.com

J.P. Morgan Chase JPM +0.25% & Co. has taken $2 billion in trading losses in the past six weeks and could face an additional $1 billion in second-quarter losses due to market volatility, Chief Executive James Dimon said Thursday in a hastily arranged conference call after U.S. markets closed.

The losses stemmed from derivatives bets gone wrong in the bank's Chief Investment Office, which manages risk for the New York company.

(visit the link for the full news article)


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This could be the beginning of the financial collapse. A couple months ago the derivatives were $600 trillion and now it's reported $700 trillion. Insane! J.P. Morgan is supposed to be the best well managed between the few institutions that hold the larger part of derivatives market. These loses will probably contaminate the whole market soon.

"J.P. Morgan shares fell $2.39, or 5.8%, to $38.35 in after-hours trading Thursday."

It's going to be fast and ugly!

online.wsj.com
(visit the link for the full news article)

No worries. A fresh bail out package is being slapped together right now. The us irs just dished out a boat load of cash to the citizens so the us people are feeling a bit relieved to have a little something in their pockets. They wont even notice the pillage.

After hours the stock is sitting around -6.8%. Tomorrow is not going to be a good day for JPM holders...

Everybody has been sitting around waiting for the trigger for the next big leg down - the inevitable implosion of the derivatives mkt... but I am not sure if this is it. It sure is telling though. JPM should be able to cover the losses, my fear is when a smaller player takes a hit like this and has to fold. That could set off the cascading defaults that will rock the financial world. We are probably not there yet.

What is after a trillion? Quadrillion?
Just repeat after me: Too big to fail. Too big to fail. Too big to fail. Too big to fail. Too big to fail. Too big to fail. Too big to fail. Too big to fail. Too big to fail. Too big to fail. Too big to fail. Too big to fail. Too big to fail. Too big to fail. Too big to fail. Too big to fail. Too big to fail. Too big to fail. Too big to fail. Too big to fail. Too big to fail. Too big to fail. Too big to fail. Too big to fail. Too big to fail. Too big to fail....

Oddly enough, I'm not interested in letting them survive. If the losses continue, F# them like they love effing most of the people who bank with them.

jp morgan has 260,000 employees. what would happen if it failed.

there would be 260,000 millionaires waiting on the unemployment line.

and it would lose the $18 billion it makes in profits every year, or in terms people can understand, about the price of 120 f-22 raptors.

the u.s., by the way has already built 195.

in the grand scheme of things, jp morgan is a little minnow trying to be a great white shark.

so america has to ask itself, is the global damage and the damage jp morgan is doing to america's financial system and global economy worth a lousy $18 billion in profits it produces from the work of 260,000 employees.

the fact is jp morgan is not worth the headache it causes and not worth one dime of your money and if it failed absolutely nothing will happen, regardless of all the bells and alarms going off on cnn.

260,000 people/crooks out of work is .083% of the population. it won't even make a little, small microscopic dent on america as a whole.

"We will admit it, we will fix it and move on," Mr. Dimon said. "This trading violates the Dimon principle."

online.wsj.com...

what principle's that, don't get caught ?

aren't they leveraged like 100 to 1 or more?

hopefully soon that evil bastard dimon, will have to answer for all the people he has harmed.

Where does all the money go when a trade loses ?

I thought every loser produced a winner ? Or does the money just disappear into thin air somewhere.

Sounds like somebody's got their hand in the till

JPM is probably the strongest of the Too Big To Fail group. I don't think this is going to too seriously hurt them. I'm somewhat surprised they marked any of the losses on this to be honest. I don't think you can trust a bank balance sheet since CONgress twisted the arm of the National Accounting Standards Board to not implement mark to market requirements in '09. Which basically marked the bottom of the collapse of the S&P.

Something does not sit right with me now that I think about it more...
Why are they announcing this on a Thursday? Typically the bad news is released after trading on Friday.

I'll be keeping my eye on the markets tomorrow...

I'm sure the governement will bail them out with your tax money.

At least I'm upfront about being a communist! Perhaps I should send my old hammer-and-sickle flag over to my comerades at JP Morgan!

Another one bites the dust
Another one gone Another one bites the dust.
Regards Iwinder

If J P Morgan underestimated the risk to such an extent it really makes you wonder? Are there other "green shoots" at risk in a double dip scenario? How long have the financial market insiders known about this?

In Australia:

Australian shares are trading lower, led down by the banks after US banking giant JPMorgan spooked investors with a $US2 billion trading loss on a failed hedging strategy. European markets rose and the Dow Jones snapped a six-day losing streak, but Wall Street futures fell on the JPMorgan news.

Read more: www.smh.com.au...

Let's see what happens tomorrow.

Been following all this at zerohedge and other non-msm economic related sites. A couple of thoughts I've heard are :JPM is the New York Fed basically. If they had to admit to this what lies stinking and rotting at Goldman, Citi, B of A, and other banks less contected and capitalized than JPM; similar to things that happened in fall of '07 spring of '08; evidence of moral hazard created by the concept of TBTF, thoughts about who is on the other side of the trade, if smaller less well capitalized institutions followed JPM into it and
the followind from zerohedge

Attempts to hedge his over-hedged positions and/or unwind them impacted the market too much and we suspect created the need for today's admission of guilt. And so, we find ourselves with - net CDS/CDO notionals remain huge (and implicitly on JPM's shoulders), his very recent lack of selling has left the credit index maybe 20bps rich to where it might trade given its rough correlation with the S&P 500 and this would imply at least $3bn of losses already in addition at fair-value. Of course, the situation is far worse

The news was good to knock S&P futures down 10 points immediately though as of right now they are only down 7.

I've said it before that I'd be surprised if they can keep the rot stinking up the TBTF from causing another crisis before the November election. I doubt this is it. But with what's going on in Europe if there are other firms that followed JPM into this trade things could get interesting real quick.

Jon Corzine remains a free man after stealing over a billion from his customers ( Max Kaiser says he was threatened by none other than JPM Ceo Jami Dimon), and is a major fundraiser for the President. Nice to be a President's money man ain't it.


Edit to add: Speaking of MF Global, both the MF Global theft and this loss by JPM originated in those companies London offices. If I had enough money to be professionally managed I'd be looking for companies that either do not have London offices or the agreements on account segregation are iron clad if not go through the trouble of getting as much as possible out of street name into my own name to keep it out of The City casino.

It is no longer capitalism anymore, it is the big boys club; even when they fail they still get bailed out because of their connections.

reply to post by Patifier


I know little of the language you speak but these are the trigger signs to look for....


@ everybody that says let it collapse...,(yeah in weak moments I have said it too),,,,give me a break would ya!!! and get real while you are at it!!!

reply to post by rebellender


Try watching this 10min lecture, if you have questions just ask and we will help you!



Unfortunately I think that a collapse is inevitable. I don't like the prospect also, It'll be chaos and bad for everybody. In the long run it may improve things but the cost is too great. That's why I like Ron Paul ideas about the FED and concurrent currencies.

I just purchased a new house and finally got Internet hooked up. When I heard of Chase again making news and making it big, it reminded me of this story....

www.abovetopsecret.com...

They turned a blind eye, the ATS story says....but did they? Weren't they just as involved? The BBC today was praising them up because they didn't have thier hands in the bail- out. THEY DIDN'T NEED TO!!! They had Madolf! Why charges weren't brought against them....I'll never kno..........errrrrrr was I about to say ill never know? Hahahahahahahahahaha

Anyways...according to the BBC...this is going to effect the worlds economy huge. It's already effecting stocks across the world.

So...what does this mean? More bail-outs? The banks now know they can play big and we'll be here to be thier Hero's!? WTFchuck!!! The last time we " Americans" called the White House and said no to bail- outs...they turned the phones off!

reply to post by rebellender


Why can't we let them bury themselves into the ground?

I remember this guy that owned a business and he couldn't pay his bill so essentially his company collapsed....went under.

Do we owe Chase something? This guy went everywhere looking for someone to bail him out...to no avail.