JP Morgan loses $2 billion from London trader "Voldemort"

[Lore]

Don't you even know what to do with crooks? Oh---thats right. You're a democrat
If the Obama administration wasn't corrupt, it would arrest and prosecute people like Obama crony John Corzine, former NJ gov (DEM) and US Senator from NJ (DEM) and head of MFGlobal when the money was stolen. The Congressional investigation of MFGlobal turned up emails that tied the theft of investors money directly to Corzine.
But instead, Corzine is an honored Democrat, and an Obama bundler on Wall Street and personally a FOO and big donor for Obama----so the Justice Dept. will look the other way.

A couple of things, once again, you're wrong at here. For one, I'm not a Democrat. Secondly, if the Obama administration wasn't corrupt they would have brought the previous administration up on charges for war crimes. There seems to be a general failure in our government of correcting malfeasance among the power brokers.

[dolanbaker]

Knowing who took the profits may shed some light on the story.

The owners of these !!
Bling!!
When you see these icons of wealth, along with their owners, you now know where the money came from.

Look closely at their facial expressions - they will be laughing away -- at YOU.

Gas

Sad but true!

If there's one the world needs more than anything else, it's a (much) smaller financial sector!

Eliminating a lot of the parasitic functions could end austerity for a sizeable percentage of the population.

[BobInget]

That two billion or will it be five? Did not go directly to money Hell.
Somewhere on this planet, other banksters chalked up profit.
When trillions are moved round the world every hour of the day, a few billion fall through
cracks. In 2011, JPM no doubt was winning more bets then loses. We never heard of this trader's team
while they were making billions for their bank. OTOH, Few institutions are going to advertize their losses.
(unless they are too big to hide)

Put in perspective. BP's Macondo's GOM disaster cost perhaps eleven billion, killed more wildlife
put a great body of water in peril for a dozen years. BP restored their dividend.

Perhaps the greatest human tradgey of our generation is Japan.
Poor planning at Fook may kill off millions of innocents, never mind causing trillions in financial losses.
I have little doubt, few banks will stop doing business with Japan or JPM. . Check out Panasonic and Sony losses for Q-1. Toyota OTOH, posted 1.5 billion in profits for Q-1.... Go figure, maybe trucks fall apart faster then flat screens.

[radon]

Somewhere on this planet, other banksters chalked up profit.

Well, yes, - then why would a trader called Voldemort, and then London Whale on the top of it - presumably signifying that he kinda understands what he is doing, and able to expose the bank to billions-worth positions, - why would he make such stupid bets?

He was trading against the arbitrage opportunity, apparently, as follows from the articles.

[rockdoc123]

I guess at least one person should point out that the head of the trading group actually doesn't make all the trades. He takes responsibility for them obviously. I wonder what the tradeoff here is as to how much money was made through his agressive trade approach over the last five years versus lost recently.

[radon]

http://dealbook.nytimes.com/2012/05/11/in-jpmorgan-chase-trading-bet-its-confidence-yields-to-loss/

Among the hedge funds that began taking positions against JPMorgan were Blue Mountain, a New York fund; Lucidus Capital Partners, a London fund; Hutchin Hill, a New York fund; and Bluecrest, a giant London hedge fund founded by two former traders on JPMorgan’s proprietary trading desk.

The former employees make a profitable trade against the former employer.. Kind of "golden parachute"?

[americandream]

Housing bubble wasn't just in the US, it was overbuilt vacation homes in Spain for Brits too, and housing bubble in Ireland. And all the loans were securitized, cut up in pieces and packaged with pieces of totally different kinds of loans then marketed as "financial products" all over the world -- insured by AIG.

These housing derivatives were hastily cobbled together, multi-tiered and consequently, not clearly demarcated back to the title. Trying to hedge against these instruments...hmmm....risky. Very risky.

[smiley]

I guess at least one person should point out that the head of the trading group actually doesn't make all the trades. He takes responsibility for them obviously. I wonder what the tradeoff here is as to how much money was made through his agressive trade approach over the last five years versus lost recently.

As far as I understand Bruno Michel Iksil is the actual trader (or at least the trades are made in his name). And as I understand he has not been making any money, but just has been very busy digging a deeper and deeper hole for himself in the past years. Until his moves were becoming so big that they started to rattle the market.

April 5: Strange: Multiple Reports Of A JPMorgan Trader With An Epic Position In Credit Default Swaps

Interesting this article is from before the JP annnouncement.

[Revi]

I think putting your money in banks nowadays is like giving your life savings to your crazy uncle who gambles at the casino. He asssures you that the money will be there when you want it in 10 years, then he puts it all in his van and heads to Vegas. Whoopee!

[smiley]

Tried to read the 10Q but halfway my head exploded from the legal dribble. Anyone got a idea how serious this is?

Fallout from JP Morgan trading losses, which led to rater Fitch downgrading their debt yesterday, aren’t the only financial worries the banking behemoth is facing. Nestled in that shocking 10-Q filed Thursday is an admission that their regulator, the Securities and Exchange Commission, thinks some of the details that lead to the explosive Ambac mortgage security fraud suit against the naughty stepchild of JPM, Bear Stearns/EMC, are worthy of an enforcement action. Yep- the SEC is giving or finally gave them a Wells Notice

How many billions in damages JP Morgan will have to pay out is not yet determined but inside their Mortgage-Backed Securities and Repurchase Litigation note on the 10-Q the bank tells us “There are currently pending and tolled investor and monoline claims involving approximately $120 billion of such securities.”

http://www.teribuhl.com/

[Sixstrings]

I think putting your money in banks nowadays is like giving your life savings to your crazy uncle who gambles at the casino. He asssures you that the money will be there when you want it in 10 years, then he puts it all in his van and heads to Vegas. Whoopee!

Nice analogy, but I think it's worse than that..

It's not just deposits they're gambling with, but also taxpayer bailouts and federal reserve cash infusions. The straight-forward business of banking has been lost along the way, it's like a nuissance side-business for them now. They have dreams of derivitive and credit default swap profits in their heads.

EDIT: Romney surrogate says "you can't punish companies for taking risk." But these credit default swaps and derivivatives are just time bombs, it's a paper fiat casino that bears no relation to real capitalism producing tangible products.

All this crap produces is inflation.

[Timo]

CNN just reported that an investigation into the loos has just been begun by the FBI. Kunstler must be real happy now. Finally! A criminal investigation into the practice and culture of gambling with other people's money!

[radon]

It may happen that this is not as much gambling as it is a preordained quasi-legal privatization scheme (taxpayer/depositor money being the object of privatization).

[eXpat]

That two billion or will it be five? Did not go directly to money Hell.

2 Billion, 5 Billion, what is some money between friends??
JPMorgan losses may hit $5-billion

But amid new revelations Friday that JPMorgan’s losses from a botched hedging strategy may reach as high as $5-billion by the time the dust settles, Mr. Dimon, the bank’s outspoken chief executive officer, will no longer be able to play down the loss.

Though $2-billion is a sizable sum to lose, Mr. Dimon told NBC’s Meet the Press on Sunday that the number required a dose of context. Sure it was painful, but the bank could withstand the blow.

“It’s a question of size,” Mr. Dimon said. “This is not a risk which is life-threatening to JPMorgan. This is a stupid thing that we should never have done. But we’re still going to earn a lot of money this quarter.”

Such a statement may not have played well on Main Street. But in Wall Street terms, $2-billion was only about half of the profit JPMorgan is expected to make in the second quarter. On average, analysts are expecting the largest bank in the U.S. to earn about $3.9-billion. During the same quarter last year, JPMorgan made $5.4-billion.

But with new revelations from the Wall Street Journal on Friday that the losses could grow to $5-billion as the bank’s hedging problems compound, Mr. Dimon is no longer faced with merely losing a portion of one quarter’s earnings. He’s now staring down the reality of losing an entire quarter.

http://www.theglobeandmail.com/globe-investor/jpmorgan-losses-may-hit-5-billion/article2437615/?utm_medium=Feeds%3A%20RSS%2FAtom&utm_source=Home&utm_content=2437615
Is just a matter of size people, nothing to see, move along.