This time it's JPM - the one with the supposedly sophisticated risk management systems, and Jamie Dimon who thinks he's clever enough to tell regulators how the global banking system should be regulated...

The so called 'Whale' in London - their trader who was taking such large positions that he was singlehandedly moving the whole market, he .. well.. wasn't apparently as clever as he was bursting with cash.

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


They have owned up to $ 2Bn in losses. And admitted that they may lose another Billion or two before they are able to unwind the whole tangled trade...

Plus ca change, plus ...

If only...

he meant ... "There were many errors, sloppiness and bad judgment; none of which were MINE"

I just love how quickly new terms are created in reaction to news events... Since CEO Jamie Dimon's hubris was well known (he was quick to lecture the media, other bankers, regulators and legislators..), it is not surprising that there is a fair bit of smug satisfaction expressed at his downfall.

Dimonfreude, it's being called ... :-)

Aha. It appears they got burned selling CDS's.

poor guys. give them a break I say. How are they supposed to know that CDS's can blow up in your face without warning??

Not like it's happened before...

Oh wait

And the scapegoat for this systematic problem is.......

It doesn't really seem to matter anyway. It's all peanuts. Right at what would almost be the end, (and I'm sure there will be one) there's always the tax-payer to help out when all seems lost.
So come on you bankers, carry on regardless, the worst that can happen is that the tax-payers can no longer pay then we can all start again - with your help of course...

the fact that the CEO publicly named the trader who was allegedly involved tells you that the trading positions taken by the bank had been approved at levels much higher than the individual trader. by most accounts, the JPM case is different than the other recent cases because these were not "rogue" trades, they were likely a series of trades where the bank simply bet wrong on the credit markets.

I think the reason he was forced to name the trader in question was simply that the trades by Iskil (the "London Whale") made the news weeks ago; it was said that he was taking such large positions in CDS market that he was singlehandedly distorting the market...

I may be naive, but I thought secrecy was a trader's most important weapon; the last thing you want, when you have billions riding on a trade, is for everyone and their dog to know what you're trading and what positions you have.

Now that they have admitted to the loss, JPM are like sitting ducks - every hedge fund out there is trading against their known positions. Look for this 2 Bn loss to blow up to at least 4 or 5 Bn as the vultures whip up a feeding frenzy...

Yep, JPMorgan are going to be taken to the cleaners for at least another billion. Maybe a few more... Here's what I was reading when I thought: "Must see what the hotshots at EF have to say..."

http://www.ritholtz.com/blog/2012/05...ght-be-coming/

Apparently Dimon read about the problem in the papers.

Slightly OT: Did any else got to see the Wall Street drama "Margin Call"? I thought it was excellent.

I know, let's have the USA print some more dollars. Because they can and it's worthless, not based on reserves anyway.

Oh wait, they've be doing that for decades I've just been told ....

This and casinos, looks like the same thing!

Briefly worked for this !@#$^**((*^#%^ some years ago.
Been walking round with a an ear-ear grin for the past 2 days.

Michael Lewis said it best in Liar's Poker:

"Those who say don't know, and those who know don't say."

simple!!!!!

It works like this:
I gamble loadsa punters money on some virtual gamble.

THERE ARE ONLY 2 POSSIBLE OUTCOMES:
I win!.
The punter gets money back and the bank makes loadsa virtual cash
(all gains are later realised on REAL ASSETS I.E. your mortages, insurances premiums, pensions etc.)

I lose, and guess what!!??
The punter loses loses money and (the bank BREAKS EVEN!
(all losses are later realised by raiding your mortages, insurances premiums, pensions etc. and by increased taxes )

To be quick and harsh to lecture NON-bankers quite obviously is a kind of "déformation professionelle" of banking people as most bankers clearly were born in those villages where people are always right For the best of us all I nevertheless hope that JPM will survive and not go belly up

I don't think anyone would want to see a large institution go belly up - that will mean lots of job losses and market disturbance and another round of bailouts - basically more pain for people who had nothing to do with this.

I think what people want to see is appropriate retribution for the ones responsible, and a more rational debate about what is wrong with the current financial/regulatory system. It is obscene that AFTER the current debacle, Jamie Dimon is still insisting that any government clampdown on proprietary trading by banks would be counterproductive; and that some politicians in the US are still sympathetic to his point of view...

14th May 2012

Dimon geezers

“JP Morgan Chase last night announced a surprise $2 billion trading loss on credit derivatives trading, which chief executive Jamie Dimon blamed on “errors, sloppiness and bad judgment”, warning it “could get worse”.
- From The Financial Times, Friday 11th May 2012.

“The best way to build shareholder value is to build a great company, with exemplary products and services, excellent systems, quality accounting and reporting, effective controls and outstanding people.”
- From the JP Morgan Chase Annual Report 2011.

Imagine you are one of two people playing „Monopoly‟. While you follow the rules religiously, the other player – who also happens to be the banker – does not. He routinely appropriates properties. If he doesn‟t like the score on the dice, he simply changes them. He continually takes as much money from the bank as he likes. Whenever the rules don‟t suit he arbitrarily alters them in his favour. And he hates to lose. Rather than concede defeat, he is perfectly willing to set fire to the board. Imagine no longer. This is the state of the financial markets. You are playing against the world‟s central banks.

Attachment 42853

To be fair was that not something Mr. Lewis came up with, but some Chinese guy called Laotse in 600 BC...

Chapter 56 of the Tao te ching:
http://www.wussu.com/laotzu/laotzu56.html

P.S: I only know this cause I love this book - it is full of smart-ass lines that I have used as openers for otherwise completely boring ppt sessions... and I used this particular one in a study paper back in college for a professor I always wished would simply shut up once instead of spreading some seriously wrong half-knowledge...

It's like that everywhere in the world.

Even worse: central banks are private.

Ina Drew, who ran the CIO office for JPM, and who oversaw the whale trade, is apparently out of a job.

She is, however, not rushing to apply to RAV right away. She was paid $15 Million last year...

And that for work that CEO Dimon recently described as “flawed, complex, poorly reviewed, poorly executed and poorly monitored.” Wonder how much you can get paid if you're realllly good.