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JPMorgan reveals $2 billion trading loss, CEO Dimon admits "egg on face" [View All]

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No Elephants Donating Member (1000+ posts) Send PM | Profile | Ignore Fri May-11-12 02:03 AM
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JPMorgan reveals $2 billion trading loss, CEO Dimon admits "egg on face"
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JPMorgan reveals $2 billion trading loss, CEO Dimon admits "egg on face"

By David Henry and Rick Rothacker

Fri May 11, 2012 12:52am EDT

(Reuters) - JPMorgan Chase & Co, the biggest U.S. bank by assets, said it suffered a trading loss of at least $2 billion from a failed hedging strategy, a shock disclosure that hit financial stocks and the reputation of the bank and its CEO, Jamie Dimon.

For a bank viewed as a strong risk manager that went through the financial crisis without reporting a loss, the errors are embarrassing, especially given Dimon's public criticism of the so-called Volcker rule to ban proprietary trading by big banks.

"This puts egg on our face," Dimon said, apologizing on a hastily called conference call with stock analysts. He conceded the losses were linked to a Wall Street Journal report last month about a trader, nicknamed the 'London Whale', who, the report said, amassed an outsized position which hedge funds bet against.

JPMorgan said in a filing with the Securities and Exchange Commission that since end-March, its Chief Investment Office has had significant mark-to-market losses in its synthetic credit portfolio - these typically include derivatives in a way intended to mimic the performance of securities.]/div]

http://www.reuters.com/article/2012/05/11/us-jpmorgan-t...


Derivatives. Seems to me I've heard of those before. Let me think.....
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