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Dimon on CIO activities: JPM has suffered a $2B loss in the synthetic credit portfolio. "The...
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Thursday, May 10, 2012, 5:08 PM ETDimon on CIO activities: JPM has suffered a $2B loss in the synthetic credit portfolio. "The strategy was flawed ... There were many errors, sloppiness, and bad judgment ... risk managers are fully engaged in helping to monitor the current portfolio." He goes on to say volatility could remain high over coming quarters and could cost the bank another $1B.
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This news story has 47 comments:
http://bit.ly/KrgnxQ
see table 1 about half way down
Jamie Dimon (JPM) Feb. 15 on regulators: "They make trading sound like someone's sitting there, guessing." Today: "Just because we're stupid doesn't mean everyone else was ... We have egg on our faces ... We deserve any criticism we get." [From SA post after this one]
CNBC quoted Dimon as saying "trades were poorly executed and poorly monitored." Poorly monitored?
And "these were egregious, self-inflicted mistakes."
Where are the controls that are supposed to contain this? All of this is Dimon admitting he has failed to do his job.
Who do you hold accountable? The CEO.
It's simple, this is what firing is for.
I read a couple of your other comments.
First let me say congrats on working towards your MBA and your degree in economics. Hopefully you will be someone who uses those degrees to fix the mess we have in this country.
Unfortunately Mike you have only been investing since 2005 and I don't think you have really "learned" yet what really goes on in the world and Wall Street.
JP Morgan is just an arm of the FED. They survived and thrived during the 2007-2009 meltdown thanks to the FED. JPM has over $7 trillion in derivatives exposure, enough to end the world as we know it. They can never fail. They never will. Our government and FED will make sure of that. They will screw over every man, woman and child in the US if they have to, to make sure JPM survives.
They also have one of the most advanced and underhanded prop trading desks in the world. They get away with everything. They can because they are owned by the FED and run our country. Do not let anyone ever tell you different. Just ask all the innocent investors, farmers, etc who's money was stolen from them and given to JPM thanks to the MF Global mess. They are never getting most of that money back. No one in gov't wants to investigate it. They can't.
JPM makes their money with free money from the FED, stealing, cheating, and lying from others, and they are completed protected.
It is what is it. There is nothing anyone can do about it. Nothing.
Best to you.
Profits are nice, but gunslinging these days should be held in check.
I understand on the prop desk you take big risks, but this one really blew up and it shows they don't have a good handle on the risks they take everyday. Interesting that this, as I understand it, was supposed to be a hedge that blew up. So much for hedging.
But the big concern is what's the rest of their book look like and how much more of this risk do they have? Who knows, but the risk controls are not that hard to implement.
Again the greed of the clueless financial sector shines through.
Just remember it's the same guys who rate companies like AAPL and CAT, give expectations, bla bla...
and it's the same people which will make these 2 stocks drop tomorrow by 1% although it has 0 (zero) real effect, correlation or anything to do with JPM.
Wall St. and all these analysts have no clue in real economy
If you ask me how much I'll pay for a bank stock? 0 (zero), I will not own even 1 bank stock, worldwide. Luckily, I don't right now.
This is why you have RISK CONTROLS, and YES, you write them into your trading software!
And that...costs less than 2 Billion!
http://bit.ly/HR1svY
Is that like a SBUX in a SBUX?
Good luck catching a falling rusty contaminated knife. JPM will be down so much its possible S&P downgrades them if they didn't get downgraded already by Moodys.
New Lows make NEW LOWS! J Livermore.