So another bank burns a handful of billions

[Supafly]

http://dealbook.nytimes.com/2012/05/11/s-e-c-opens-investigation-into-jpmorgans-2-billion-loss/

S.E.C. Opens Investigation Into JPMorgan’s $2 Billion Loss

Regulators are investigating potential civil violations surrounding the $2 billion loss that JPMorgan Chase disclosed on Thursday, raising further questions about the trading activities at the nation’s biggest bank.

The Securities and Exchange Commission recently opened a preliminary investigation into JPMorgan’s accounting practices and public disclosures about the trades, according to people briefed on the matter, who spoke on the condition of anonymity because the case is not public. Regulators learned about the activities in April, and formally opened an investigation in recent days, the people said.

The case, which is being run out of New York, will likely examine the bank’s past regulatory filings about the internal unit that placed the trades — as well as recent statements from the firm’s top executives.

In April, questions surfaced about the group, the so-called chief investment office, after reports emerged that a London-based trader was taking large bets that distorted the market. At the time, Jamie Dimon, the bank’s chief executive, dismissed the concerns about the trading activities, calling them a “complete tempest in a teapot.”

On Thursday, JPMorgan revealed that the group had suffered significant losses, which could cost the firm $2 billion or more. A more humble Mr. Dimon on Thursday said “egregious mistakes” were made.

...

When will these banks be regulated? I do not mean they have to become owned by the government, but you can't allow them to burn customer's money like this.

 

[Sam Fisher]

People are free to deposit their money where ever they wish. I refuse to not use a bank to manage my money.

 

[Sam Fisher]

And then, there's these two ass-hats.

Remember when Obongo was running down the bankers, the wealthy, the fat cats??? He is such a two-faced fucking con!

 

[Rey C.]

As bad as it is to lose $2 billion +/- in what's said to be about three weeks, this probably won't damage the bank that badly. Yeah, I know... how screwy is it when a $2 billion loss DOESN'T hurt you that badly?! But even with the trading loss, profits from other operations of the bank will probably still enable a net gain of $4 billion this quarter.

What bothers me about this incident is, what if this loss had been big enough to do real damage to the bank? What then? :dunno: Customers/depositors aren't at risk as long as they are within the FDIC limits. So who is really at risk? Well, the shareholders, but mainly the U.S. taxpayers... AGAIN! "Too big to fail" has not gone away. The biggest U.S. banks in 2012 are even bigger than they were in 2008. And though people keep talking about Dodd-Frank and the Volker Rule, when the Glass-Steagall Act of 1933 was repealed in 1999, that opened the Pandora's Box that we have now. With a sitting President and a "do nothing" Congress that will not sufficiently address the issue and one running for office who just wants to repeal ALL of the current limits on proprietary trading by banks, when (not if) one or more of these big money center banks fails, the U.S. taxpayers will either have to bail them out again, or we'll ALL have to be prepared for another financial meltdown.

As long as big banks can privatize their profits and socialize their losses, we'll continue to have a problem. Heads they win, tails we lose.

 

[Trident1]

And then, there's these two ass-hats.

Remember when Obongo was running down the bankers, the wealthy, the fat cats??? He is such a two-faced fucking con!

Two uber rich liberals telling middle America how great it is to have a Leftist gov't.

 

[Straight Shooter]

This is all the more reason to get the Volcker Rule implemented

 

[Rey C.]

Two uber rich liberals telling middle America how great it is to have a Leftist gov't.

And the combined net worth of those two still doesn't equal the net worth of Mitt Romney. The election of Mittens Romney will probably be good for me (personally). But I'm not at all convinced that having a corporatist as POTUS is going to be good for the nation. Possibly Obama isn't the best/better choice either. But using that as an excuse to vote for what I see as a bad choice, that just happens to be a Republican, isn't exactly heart warming.

If nothing else, Mitt will make certain that the big money center banks continue to be back-stopped by the Fed (American taxpayers on the hook, in other words). Prop traders (at banks), hedge fund managers and the like, know that Mitt is one of their own. Maybe he'll even help people like me declare our (ordinary) income as "carried interest", so I can pay an effective tax rate of 13.9% too. Go Mitt, go! :nanner:

This is all the more reason to get the Volcker Rule implemented

Yes, at the very least, some version of it... or a re-implementation of the Glass-Steagall Act.

 

[Straight Shooter]

Two uber rich liberals telling middle America how great it is to have a Leftist gov't.

Uber rich? you know the salary for U.S. President is $400,000. Sure it's alot of money but compared to Romney's salary that's peanuts

 

[E-Ann-Hilden]

Uber rich? you know the salary for U.S. President is $400,000. Sure it's alot of money but compared to Romney's salary that's peanuts

so funny they turn this around on Obama... If you make millions on Wall Street=Good, Hollywood=evil!

I dont like that Obama or any politician is bought by the banks, but it never changes, whomever is in the oval office,,,

 

[bobjustbob]

Jamie Dimon J P Morgan Chase CEO on Face The Nation tomorrow. Is this going to be a tap dance or are they going to brief him on the questions a lob soft balls?

 

[Trident1]

Put back Glass/Steagall now. There were regulators watching JPChase but when you're dealing with a derivative of a derivative of a derivative no human being could possibly know what the fuck is going on.
Glass/Steagall would insulate the savings portion of a bank from the investment part. These mega banks were created when the GS act was repealed; a huge mistake.

 

[Straight Shooter]

Put back Glass/Steagall now. There were regulators watching JPChase but when you're dealing with a derivative of a derivative of a derivative no human being could possibly know what the fuck is going on.
Glass/Steagall would insulate the savings portion of a bank from the investment part. These mega banks were created when the GS act was repealed; a huge mistake.

I'm surprised to hear this from you of all people. The Volcker Rule would also be useful here because it would ban proprietary trading.

 

[Trident1]

I'm surprised to hear this from you of all people.

Why? My father's an economist. His wisdom.

 

[Rey C.]

Why? My father's an economist. His wisdom.

Judging by what you claimed in that thread about taxes, you should at least give him a shot at doing your taxes.

 

[Rey C.]

And the heads begin to roll! One thing is for certain, Dimon would stick a dagger in his mother (on Mother's Day, no less!) to make sure that none of the blame sticks to him. irate:

May 13 (Bloomberg) -- JPMorgan Chase & Co. executives in the bank’s chief investment office will leave as early as this week after the firm suffered a $2 billion trading loss, according to a person familiar with the matter.

Ina Drew, who oversees the unit, is among three executives set to leave, the Wall Street Journal reported today, citing unidentified people familiar with the situation. Chief Executive Officer Jamie Dimon previously resisted accepting her resignation, said the person, who requested anonymity because the discussions were private. Drew didn’t immediately respond to a message seeking comment.

Dimon, 56, announced the loss May 10, assailing his firm’s handling of trading in synthetic credit securities as “flawed, complex, poorly reviewed, poorly executed and poorly monitored.” The incident has given ammunition to proponents of stricter bank regulations.

Drew, 55, is one of two women on the operating committee at JPMorgan, the biggest and most profitable U.S. bank. Her office oversees about $360 billion, the difference between money from deposits and what the bank lends. Dimon had encouraged her unit to boost earnings by buying higher-yielding assets, including structured credit, equities and derivatives, in an expansion of risk-taking led by Achilles Macris, ex-employees said in April.

Macris, 50, and a trader on his team, Javier Martin-Artajo, also are leaving the New York-based firm, the Wall Street Journal reported, citing the unidentified people. Macris and Martin-Artajo didn’t immediately respond to messages left outside of regular business hours.

 

[Trident1]

Judging by what you claimed in that thread about taxes, you should at least give him a shot at doing your taxes.

Meh so I exaggerated on my taxes. I was pissed off my bad.

I get all my financial dos and don't from him.

 

[bobjustbob]

That fucking crook Jamie Dimon. Wednesday he tapes a 1 on 1 interview with Meet The Press. Thursday he announces the $2 billion loss, calls the host and says sorry. For security and disclosure reasons he couldn't mention it and doesn't want to do a follow up interview.

Friday he does the interview. Says that they screwed up and doesn't know if they did anything illegal. Auditors and legal folks are investigating it. Sunday 3 chase execs are fired.
Can you believe this guy? When did this shit hit his desk? Or did he just get a text from an investments manager saying, "Boss, I think we may have just lost $2 billion"
Do you know how long it took for them to lose that money? Just 6 weeks. What did they do? Bet it on a fucking horse?

 

[xfire]

Meh so I exaggerated on my taxes. I was pissed off my bad.

I get all my financial dos and don't from him.

I never lose.

:1orglaugh

 

[bobjustbob]

When is Jon Corzine going to answer questions about how $1.6 billion shifted from his bank's customer accounts to their trading bankroll in just a year and a half? 6 months since their bankruptcy there still is no answer. All we have so far is an investigation and no bonuses paid. Big fucking whoop. Where is my money? I have an account with you. I didn't tell you to make those risks with my money. When is Jon Corzine going to share a cell with Bernie Madoff?

 

[Trident1]

When is Jon Corzine going to answer questions about how $1.6 billion shifted from his bank's customer accounts to their trading bankroll in just a year and a half? 6 months since their bankruptcy there still is no answer. All we have so far is an investigation and no bonuses paid. Big fucking whoop. Where is my money? I have an account with you. I didn't tell you to make those risks with my money. When is Jon Corzine going to share a cell with Bernie Madoff?

His answer will be "I plead the 5th."