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  • JPMorgan's Derivatives Whale Drags Down Banks [View article]
    Just fine - $2 billion, IMO.

    In fact, I think the JPM situation is worse, because in this case the loss was not by a "rogue trader" (also probably not the case at UBS but it is the cover story). At JPM this was standard accepted practice by all appearances and the loss was a trade with corporate blessing.
    May 11, 2012. 05:03 PM | 3 Likes Like |Link to Comment
  • JPMorgan's Derivatives Whale Drags Down Banks [View article]
    Absolutely agree.
    May 11, 2012. 04:59 PM | 3 Likes Like |Link to Comment
  • JPMorgan's Derivatives Whale Drags Down Banks [View article]
    Well Dimon himself said this could get worse.

    They are unable to fully unwind the position so, while they're marking-to-market the current loss in the position, it ain't over yet.

    So you are clearly correct in not jumping in yet - you never know what is left. The fact they announced this now gives the feeling there's more to come.
    May 11, 2012. 04:58 PM | 6 Likes Like |Link to Comment
  • JPMorgan's Derivatives Whale Drags Down Banks [View article]
    Have to agree with David here, this is not some new guy hired in and given a $2 Billion dollars starter account.
    May 11, 2012. 04:54 PM | 2 Likes Like |Link to Comment
  • JPMorgan's Derivatives Whale Drags Down Banks [View article]
    Yet.
    May 11, 2012. 04:48 PM | 1 Like Like |Link to Comment
  • JPMorgan's Derivatives Whale Drags Down Banks [View article]
    This is not correct in this case. From all reports and according to JPM, this failed trade was supposed to be a hedge.

    Hedging should never equate to "taking excessive risk", it's supposed to be exactly the opposite.

    This was a failure of JPM's risk management and excessive greed bit them back as this "trade" got out of control.
    May 11, 2012. 04:47 PM | 2 Likes Like |Link to Comment
  • Here comes the sell-side: FRB's Paul Miller downgrades JPMorgan (JPM) and cuts his price target a whopping $13 to $37. "The company could hold off repurchasing shares in the near term while it gains a better understanding of potential losses." Goldman sticks with its buy rating and price target of $48. "The story remains intact." Shares -7.5% premarket.  [View news story]
    No conflict of interest in Goldman shrugging this off, is there?
    May 11, 2012. 07:47 AM | Likes Like |Link to Comment
  • Other banks AH on the JPMorgan news: BAC -3.2%, C -3.2%, GS -2.4%, MS -3.1%. Banking ETF: XLF -2%.  [View news story]
    Don't agree that because Buffet has done something it is OK or correct.
    May 10, 2012. 11:15 PM | Likes Like |Link to Comment
  • Dimon 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.  [View news story]
    Ron, my concern is the same as David's above - no risk controls.

    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.
    May 10, 2012. 09:10 PM | Likes Like |Link to Comment
  • Other banks AH on the JPMorgan news: BAC -3.2%, C -3.2%, GS -2.4%, MS -3.1%. Banking ETF: XLF -2%.  [View news story]
    Sounds reasonable, but what I'd like to see is risk controls that prevent this in the first place. I expect the other investment banks are lacking these controls, too.
    May 10, 2012. 08:42 PM | Likes Like |Link to Comment
  • Individual Investors Laughing All The Way To The Bank [View article]
    The chart indicates they seem to be catching the upturns as well. Maybe a few bankers should join and learn?
    May 10, 2012. 08:28 PM | 2 Likes Like |Link to Comment
  • How do you blow up a (London) whale? In the case of JPMorgan Chase (JPM) - which sees $2B in mark-to-market losses and counting - apparently by trying to "hedge" against credit stress by writing protection, and get the whole market playing against you. Despite uncertainty about further losses, Doug Kass is buying the dip though many are more cautious. And don't bet against a resurgence in the Volcker Rule and bank breakup talk, and more downgrades ahead.  [View news story]
    Kass is buying? Simply put - that is gambling not investing.

    There's no way to fairly evaluate this development while they are still revealing it and make a rational investment decision.

    Kass is showing them who is "just sitting there guessing".
    May 10, 2012. 07:48 PM | 4 Likes Like |Link to Comment
  • JPMorgan's Derivatives Whale Drags Down Banks [View article]
    This is an excellent point.

    My big concern is the lack of risk controls here which means not only did this one catch them by surprise, but there's nothing preventing it from happening again next week.
    May 10, 2012. 07:44 PM | 2 Likes Like |Link to Comment
  • How do you blow up a (London) whale? In the case of JPMorgan Chase (JPM) - which sees $2B in mark-to-market losses and counting - apparently by trying to "hedge" against credit stress by writing protection, and get the whole market playing against you. Despite uncertainty about further losses, Doug Kass is buying the dip though many are more cautious. And don't bet against a resurgence in the Volcker Rule and bank breakup talk, and more downgrades ahead.  [View news story]
    The logic, after UBS and now JPM, is that none of the others have the risk controls to stop "one trader", either.

    It makes sense to some degree, that with investing, opportunities often come and go where you only have time to seize the opportunity and not time enough to do proper risk management on the opportunity, or so it might be thought at the time.
    May 10, 2012. 07:26 PM | Likes Like |Link to Comment
  • Deutsche Bank agrees to pay $202M to settle a case brought by the U.S. last spring that charged the bank with recklessly lying about mortgage loan quality to keep access to federal financing. A fourth notch for the U.S. under the False Claims Act; DB -2.7% AH.  [View news story]
    Right in there with JPM - clean companies all, who wants to buy a "bank"?

    They didn't earn the nickname "bankster" for nothing.
    May 10, 2012. 07:19 PM | Likes Like |Link to Comment
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