They made about 20 billion last year in net income. They didnt lose customer money or government money but took a small hit to their annual income and the only people that should care are shareholders, not pundits that have no clue. So now the world is going to end?? Wow, if pepsi took a 10% hit on income would anyone care? Probably not. So now politicians are getting their panties in a bunch over this and salivating look a bunch of wankers. at least somone has a clue. http://video.cnbc.com/gallery/?video=3000088857
hold on... they have a 100 billion bet gone awry... the M to M is now 2 billion this bet could get sourer. if that is a word.. 4- 6 8 ?. who knows how much loss and how many other bets are not revealed.. btw. who is on the other side of the bet.. making the money? GS?
There's no tolerance for poor risk managment anymore. JPM is also the largest holder of notional deriviatives on the planet. Not too comforting. Its dawning on people(finally) that risk management isn't very effective. Period.
They (the banks) were to wind-down prop-trading in compliance with Volcker. Instead, Dimon ramps up pure-spec in a treasury division in what amounts to a massive short put for $400MM in premium. A 5:1 spread bet. There is talk that they could lose $8-10B max. The marks were inflated as their execution guy was defending the position by lifting offers in size in a "by appt" market.
We are human, not perfect. The trader will make 80 million, get fired, and in 6 months use his own money to start a fund, get another 10 mil. under management, and blame JPM and not himself. He will make more money than any retail trader, so he was successful in his career. good for him, money is super important and he made a ton. JPM still made billions last quarter. it's not like what he did was illegal. he tried, made stupid money, got out, and will likely be rich forever. and he's probably like 25. LOL
While the size of their position is reputed to be very large and these losses could increase, even if it ends up at three or even four billion those are not life threatening for a bank of their scale. Hey ... trading has risk. And big highly leveraged trades have big risk. They know that going in. Everyone is a rouge if they lose but when they are winning everyone in the group looks to share the credit particularly the boss or I should say bosses. This guy racks up a billion dollar plus win and Jamie would have his arm around his shoulder.
Someone laughing their ass off apparently several hedge funds. I bet they love it.....everyone hates these people (big banks) except the bankers themselves.....even goldman sachs hates them!
So JPM put on a large position. Best I have been able to figure it had something to do with the health of European companies - perhaps an aggregated pool of debt instruments? Starting the last week in April and 1st week in May something changed to cause this position to start generating mark to market loses of about $200/$400 million dollars a day. What changed so much over this interval - last week of April//early May - to cause these sizable losses? Thanks in advance for your time and energy.