JPMorgan announces shocking $2 Billion loss

JPMorgan lost $2 billion in a trading portfolio designed to hedge against risks the company takes with its own money, the bank announced this afternoon after the close of trading on Wall Street. The announcement sent JPMorgan’s shares sharply down by over 6% in after-hours trading.
JPMorgan Chase & Co. is the largest bank in the United States by assets and market capitalization, and a major provider of financial services, with assets of $2 trillion. The hedge fund unit of JPMorgan Chase is one of the largest hedge funds in the United States.
The trading loss is an embarrassment for a bank that came through the 2008 financial crisis in much better health than its peers. It kept clear of risky investments that hurt most of its peers.
Joe Weisenthal reports for Business Insider, May 10, 2012, that JPMorgan shocked the world by announcing a surprise $2 billion+ trading loss in its synthetic derivatives portfolio. In particular, this paragraph from the company’s 10-Q filing is what’s causing people to get nervous:

“Since March 31, 2012, CIO has had significant mark-to-market losses in its synthetic credit portfolio, and this portfolio has proven to be riskier, more volatile and less effective as an economic hedge than the Firm previously believed.”
CIO or Chief Investment Office is an arm of the bank that JPMorgan uses to make broad bets to hedge its portfolios of individual holdings, such as loans to speculative-grade companies.
The company held a conference call starting at 5 PM, where CEO Jamie Dimon insisted that this was a pure trading screwup (“egregious, self-inflicted mistakes”) due to the company’s own errors and stupidity and not something fundamental. Dimon characterized these losses as a result of sloppiness –an internal blunder, not something more fundamental.
How can a bank make a “sloppy mistake” of TWO BILLION DOLLARS ($2,000,000,000)?
Let’s hope this is not another MF Global.
~Eowyn
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Anonymous
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Anonymous

How ’bout that hope ‘n change, eh?

Paul
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Paul

They are about to be educated out in back alley by the word of a rock man.

Dave
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Dave

I don’t think the Dear Ruler will be offering up another Wall Street bailout, as it appears that they have now abandonded The One donation-wise, and he appears to be pursuing donations from loaded gays now, anyway.
Looks like even Wall Street, which has been long controlled by democrats, has at long last finally figured Obama out.
Doesn’t exactly speak well of their intelligence, does it?
-Dave

Alice Wolf
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Maybe someone is just now winning a bet that this money would be “lost”. Sounds of a shuffling Soros Type Creature offstage………………………….Snarkorama OK? LOST IN THE SHUFFLE?

Dave616
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Dave616

No problem it was TARP money anyway…… no harm no foul… Right?

dan
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dan

Obama’s campaign contributions are falling off….
except for an anonymous $2 billion donation…

tina
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they’ve been exposed for what they really are-take the money and run? along with many others-the hatchet is coming down on these cockroaches.

gumba
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Well if they lost 2 billion, who made 2 billion?