JPMorgan trading loss widens to $3B

More pain for JPMorgan Chase:

The trading losses suffered by JPMorgan Chase have surged in recent days, surpassing the bank’s initial $2 billion estimate by at least $1 billion, according to people with knowledge of the losses.

When Jamie Dimon, JPMorgan’s chief executive, announced the losses last Thursday, he indicated they could double within the next few quarters. But that process has been compressed into four trading days as hedge funds and other investors take advantage of JPMorgan’s distress, fueling faster deterioration in the underlying credit market positions held by the bank.

A spokeswoman for the bank declined to comment, although Mr. Dimon has said the total paper trading losses will be volatile depending on day-to-day market fluctuations.

The Federal Reserve is examining the scope of the growing losses and the original bet, along with whether JPMorgan’s chief investment office took risks that were inappropriate for a federally insured depository institution, according to several people with knowledge of the examination. They spoke on the condition of anonymity because the investigation is still under way.

The overall health of the bank remains strong, even with the additional losses, and JPMorgan has been able to increase its stock dividend faster than its rivals because of stronger earnings and a more solid capital buffer.

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That last paragraph is what gets me.  The company can lose $3B and still be strong.  Why are they complaining so much about lost fee revenue from the new (and reasonable) rules regarding debit cards, automatically enrolling people in debit card overdraft schemes, etc.?  Because they don’t want to give up the free money they are “stealing” from retail banking customers.


  • By Empty Pockets, May 23, 2012 @ 5:21 pm

    Please sign “Raise the Savings Interest Rate!” Petition. Don’t let one more day go by without the bank paying you a fair interest rate on your savings while they use your hard earned savings! Ordinary folks don’t gamble in the stock market. . .don’t have funds transferred overseas. . .and we certainly don’t have financial portfolio managers. We have saved responsibly and we are asking for a Fair Savings Interest Rate on the money we worked so have to save. Add Your Name Today! We need Savers of All Ages to Sign so we can go forward with this petition.

  • By coakl, June 4, 2012 @ 11:37 am

    Ha, ha, ha. Couldn’t have happened to a nicer bank!
    Watching Jaime Dimon squirm like a cockroach lit up by a flashlight, is a true pleasure.
    If Obama gets re-elected, Chase is going to be a whipping boy for the regulators.

  • By Former JPMorgan Officer, June 4, 2012 @ 3:08 pm

    The Banks own us, and when they make a multi million dollar mistakes, they put out announcements about how strong they are, but months from now, they will cry poor mouth to the Fed’s for more free money.

    Their cost of credit (the Interest they pay), is nothing. They take no lending risk as Fannie Mae, Freddie Mac, and FHA are all backed by the Feds, so they have a can’t lose situation.

    So how do things like this happen? It’s called too big to be properly managed or controlled. The Fed’s should start cutting entire divisions OFF of these big Banks. Take away the ability to do Fredde Mac, Fannie Mae, and FHA loans. Other players will take up the slack and do a better job while creating competition.

    This is how you eliminate the “TOO BIG TO FAIL” attitude where Obama and Congress give the big Banks everything they want.

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