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One question that some have been asking is if JPMorgan (JPM) lost $2.3B, to whom did it lose all...

One question that some have been asking is if JPMorgan (JPM) lost $2.3B, to whom did it lose all that cash? Investment firms such as BlueMountain and BlueCrest made ~$30M, the WSJ reports; one trader reckons that over a dozen hedge funds and banks profited by taking the other side of JP Morgan's trades.
Comments (15)
  • bbro
    , contributor
    Comments (9345) | Send Message
     
    JPM engages in a whole series of trades....as any risk taking company
    does....the question is how much weight do we give this money losing
    trade...is it worth it to price the company down (or lower) to 1.08 times tangible
    common equity per share??
    13 May 2012, 03:50 AM Reply Like
  • JohnLocke
    , contributor
    Comments (381) | Send Message
     
    In reality, should a company ever be worth more then it's common tangible equity?
    13 May 2012, 07:20 AM Reply Like
  • rrryan
    , contributor
    Comments (56) | Send Message
     
    shouldn't there be some speculative value priced in?
    13 May 2012, 12:50 PM Reply Like
  • dividend_growth
    , contributor
    Comments (2878) | Send Message
     
    The biggest winner could very well be Goldman.
    13 May 2012, 10:40 AM Reply Like
  • RSI Raistlin
    , contributor
    Comments (400) | Send Message
     
    The loss is not the big deal, the big deal is the unknown of that even the CEO has no idea how deep the losses could get. If 2 billion was the extent wouldn't it be more likely that they just admit to the loss in the next conference call? I believe the loss will be double that and will take a quarter or two to realize the extent. At that point it will be investable. I watched this run up from 28-46 in 3 months, so there is a gap that can be (and probably should) be filled.
    13 May 2012, 10:44 AM Reply Like
  • untrusting investor
    , contributor
    Comments (9925) | Send Message
     
    Exactly, the worry is that the losses could escalate to much higher levels and with multiple banks. BTW, one has to wonder if any of the counterparties have actually cashed out yet and booked those JPM losses as actual profits on closing the other side of the trade.
    13 May 2012, 04:04 PM Reply Like
  • fourchan
    , contributor
    Comments (80) | Send Message
     
    since there is no mark to market accounting, there is no reality. if reality existed every american bank would be insolvent. so who cares about this 2 billion? they will just print up more fiat currency.
    13 May 2012, 01:02 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    What/where is the equation or analysis that "every American bank would be insolvent?"
    13 May 2012, 01:10 PM Reply Like
  • Michael Clark
    , contributor
    Comments (8377) | Send Message
     
    Tomas: Let's go back to mark-to-market accounting and see where all these American and world banks really stand.

     

    I think that news would be so frightening they would never do that. Big Banks, liabilities in the trillions. All the big banks are insolvent if they go back to mark-to-market.
    13 May 2012, 01:26 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    I think you are wrong. But tell me which investments you think that are not marked to the market that are material to solvency.
    13 May 2012, 01:44 PM Reply Like
  • New Century
    , contributor
    Comments (130) | Send Message
     
    uh, there is mark to market accounting
    13 May 2012, 09:05 PM Reply Like
  • Tack
    , contributor
    Comments (12809) | Send Message
     
    JPM (Dimon) said they had experienced a "mark to market" loss on these positions. Apparently, whether required to do so or not, he has chosen to go public with this portfolio writedown. The full extent of any losses won't be known until if/when the trades are unwound. They could be more or less.

     

    Also, nobody on the other side of these trades has realized a dime from JPM, if and until they close out a corresponding position by selling it back to JPM or another.
    13 May 2012, 04:27 PM Reply Like
  • WalkTheLine
    , contributor
    Comments (5) | Send Message
     
    Great, I am glad we've tracked that $30m of the $2.3b...:-). Somehow I think the beneficiaries are going to be more discrete than an IB (investment banker) that wins the Lotto :-)
    13 May 2012, 09:38 PM Reply Like
  • minecanary
    , contributor
    Comments (411) | Send Message
     
    This loss pales in comparision to the one they will take when gold goes nuts. It may take a while since they are playing with the Bernak in their corner, but the house of cards is coming down. Get some nooses ready.
    13 May 2012, 11:51 PM Reply Like
  • inverseview
    , contributor
    Comments (2) | Send Message
     
    Obviously the team that runs compliance believes that whatever happened is a material event under federal securities laws. Oddest part is an apology for finding themselves in a position to render a vague disclosure.

     

    Having no idea of the representative constituents causing such a seminal event to surface provides that JPM erred on the side of legal disclosure despite they said nothing beyond, "oh shucks, we've had an event whereby we're down a couple of billion on our trading book," and, although silent, the majority of those committee persons voted to disclose the same.

     

    Perhaps it't just the $2 billion missing from MF Global and a realization that JPM will need to make good on those claims now that someone tied them into having withheld vital information.

     

    The above is not a speculation into what happened or did not happen. Rather it provides a framework to understand that a couple of billion means nothing unless it's tied to something specific, that sooner or later, will require more specific disclosure beyond a fluctuation in a mark..

     

    Of course these guys know how to fix accounting issues .. they invented the "black box" game.
    14 May 2012, 05:51 AM Reply Like
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