JP Morgan’s loss in risky derivatives originally estimated at $2 billion is now $5 billion and could well go higher. In addition, they have another $100 billion in risky bonds. This from the bank that had a sterling reputation for managing risk. CEO Jamie Dimon told the traders to take on more risk, so they did. oversight was non-existent as was government regulation and scrutiny.
But there were no details about the trades themselves. “I want to see the positions!” he barked, throwing down the papers, according to attendees. “Now! I want to see everything!” When Mr. Dimon saw the numbers, these people say, he couldn’t breathe.
The Big Picture has more, including the news that the trade is still open, plus this comment
I tell you this now, no $5 billion in potential losses took Dimon’s breath away… There’s something far more sinister on those books. We’ll know in the fullness of time.
You can be sure that Obama will protect and run interference for JPMorgan and his old buddy Jamie Dimon as much as possible.