JPMorgan loss may reach $9 billion

The last JP Morgan loss number Rightrdia heard ws $5 biillion. Now the loss is expected to be around $9 billion.

photo: Flickr

See http://www.huffingtonpost.com/2012/06/28/jpmorgan-trading-loss-9-billion_n_1633443.html
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Paul Krugman calls out the Wall Streeters

Paul Krugman said this in a NY Times editorial titled Egos and Immorality:

Wall Street has responded — predictably, I suppose — by whining and throwing temper tantrums. And it has, in a way, been funny to see how childish and thin-skinned the Masters of the Universe turn out to be. Remember when Stephen Schwarzman of the Blackstone Group compared a proposal to limit his tax breaks to Hitler’s invasion of Poland? Remember when Jamie Dimon of JPMorgan Chase characterized any discussion of income inequality as an attack on the very notion of success?

But here’s the thing: If Wall Streeters are spoiled brats, they are spoiled brats with immense power and wealth at their disposal. And what they’re trying to do with that power and wealth right now is buy themselves not just policies that serve their interests, but immunity from criticism.

graphic:  http://www.nndb.com 

See the complete editorial: http://www.nytimes.com/2012/05/25/opinion/krugman-egos-and-immorality.html?_r=1&hp 

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JPMorgan loss may be $5 billion

May 18 (Bloomberg) -- In today's "Movers & Shakers" Bloomberg's Betty Liu reports that JPMorgan CEO Jamie Dimon faces new challenges as the company's losses from derivatives trading may widen to $5 billion according to the Wall Street Journal. 

Jamie Dimon personally approved the investments but did not monitor them.

What were Mit Romney's initial comments on the JPMorgan loss? 

Romney, said business losses are part of “the way America works,” urged caution in adopting new regulations in response to the trading loss by JPMorgan Chase & Co. (JPM).

Romney said: 

I would not rush to pass new legislation or new regulation.

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TBO opinion : When banks' bets go bad

The conservative TBO view of JP Morgan is at the link. Jamie Dimon and his staff helped craft a loophole in the Volker rule that allows a bank to do whatever it takes to preserve an investment.

A hedge fund, on the other hand, counterbalances a risky investment with one that is not. This means that an investment bank like JPMorgan can actually make a riskier investments than a hedge fund.

America needs something like the Glass-Stegall act back that puts up a wall between commercial banks and investment banks. Jamie Dimon agrees that regulation is needed after his big loss.

This is not a progressive view. This is a rationale view.

It was also announced today that JPMorgan actually lost $3 billion.

See http://www2.tbo.com/news/opinion/2012/may/17/naopino1-when-banks-bets-go-bad-ar-404458/
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Bloomberg: Huge deposits of America's largest banks

May 14 (Bloomberg) -- Bloomberg's Mike McKee looks at the total deposits of the largest banks at the end of 2011 and the concerns over how they may put that money to work. He speaks on Bloomberg Television's "Inside Track."

The Volcker Rule was opposed by Jamie Dimon and JPMorgan and it allows banks to do whatever is needed to protect its investments. In many respects, the banks have more leeway than risky hedge funds. 


JPMorgan may end up losing $3 billion and it is possible that other banks may have huge losses as well. 


You can blame this loss on the Wall Street banks and the GOP who is opposed to regulation on an ideological basis. 


Congress should watch the Federal Reserve to make sure it doesn't secretly try to bail out these banks. 


Let the "too big to fail" banks go bankrupt. It might be easier for the feds to break up the banks this way than by using anti-trust actions. 


The government does not need to intervene with another TARP bailout. Let the billionaires and millionaires eat the losses and lick their financial wounds. 


Banks are notoriously anti-union, so if people lose their jobs, they shouldn't be surprised!  


It's free enterprise, baby! 

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Let JPMorgan fail

Investment banks are not casinos and none should be too big too fail. If a company is too big to fail,thefederal anti-trust people have been asleep at the switch.

Let JP Morgan fail and go through bankruptcy. 

Jamie Dimon was the biggest proponent for creating a loophole to the Volcker rule. The rule was designed by Congress to limit proprietary trading that may sink JPMorgan.

It was the efforts of Dimon and his staffers created a loophole in the law.

Dimon used his reputation as a Washington operator and the fact the JPMorgan came through the Wall Street financial crises intact to push for proprietary "portfolio hedging."

Senator Carl Levin, one of the architects of the Volcker Rule, said this:

Those (JP Morgan) efforts produced  a big enough loophole that a Mack truck could drive right through it.  

The loophole is known as portfolio hedging, a risky strategy that essentially allows banks to view an investment portfolio as a whole and take broad actions to offset the risks of the entire portfolio.

As Sen. Levin noted:

 (Portfolio hedging) is a license to do pretty much anything. 

The traditional definition of hedging, matches an individual security or trading position with an inversely related investment. Thus, when one goes up, the other goes down.

cartoon:  http://www.funnytimes.com

source:  http://www.nytimes.com/2012/05/12/business/jpmorgan-chase-fought-rule-on-risky-trading.html?_r=1

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