It's as if some news events are written in disappearing ink. They roll off the presses, appearing a significant for a day or sometimes two, before receding directly into the ash bin of history.
So which will it be with JP Morgan (NYSE:JPM)? Will the bad news stay? Or will it go?
For those who spent last week in solitary confinement, a drug induced comas or wedged beneath a rock, JP Morgan announced a 2 billion buck trading loss.
From CNBC (NYSE:GE) to The Wall Street Journal (NASDAQ:NWS) to your local barbershop, everyone was flapping gums about it. Here's the deal, though: just because everyone was talking about it last week, does not mean anyone will be talking about it this week. With most issues, another event with a short self-life will sidetrack traders and the media. Rinse. Repeat.
But not here. In JP Morgan's case, the wages and consequences of their sin will be steep and, more to the point, lasting. The issue is a rarity. It has the four qualities of an issue that stands the test of time:
1) It reconfigures notions. JP Morgan was seen as the bank apart, the good bank. Its stature in the public consciousness was considerably higher than Citigroup (NYSE:C), Bank of America (NYSE:BAC) and even Goldman Sachs (NYSE:GS). No more. When an issue alters preconceived notions significantly, it lives to see another day.
2) It has a practical afterlife. From regulation to potential firings, this issue is not over. Far from it. If there is no feasible second act to an issue, it will probably go gently into that good night. But if regulators are going to be circling and pink slips flying, there is more to talk about.
3) It fits into an existing story line. JP Morgan's trading loss was no fluke. It comes at the heels of similar losses at too many banks to count-before and after banks received bailouts. As such, the trade cannot be (and I apologize for the groaner ahead of time) written off. It's part of an ongoing-and continuing-tale.
4) It can be seen through the lens of an identifiable person. When a story is conceptual or ethereal, it is more likely to fade. But at the most basic level, this is a story of Jamie Dimon, the lone hero of Wall Street, who now can be rewritten as a villain. Even if it's no fair, it will happen-and stretch the story out past last week.
Any good trader has to realize that most stories recede right into the ashbin of history. But not this one. It shares all the qualities of a lasting story.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.