JPMorgan’s Trading Loss At $5.8 Billion And RisingPosted by Phil Ferguson on July 18th, 2012 – Comments Off – Posted in Uncategorized
JPMorgan said Friday that the loss from the bank’s chief investment office’s errant trades has totaled $5.8 billion so far this year.
Two months ago they said the loss was about $2 billion.
The three managers who led the trading division no longer work at the bank and could lose as much as two years of income, according to JPMorgan. All the traders involved with the so-called London Whale losses have also been “separated” from the bank, without any severance.
What? Someone lost a job. About time.
JPMorgan CEO Jamie Dimon praised Ina Drew, who led the CIO office, and said she volunteered to give up two years’ worth of pay, the maximum amount available for clawbacks. Drew retired from the firm shortly after the bad trades came to light.
When the losses were first revealed on May 10, CEO Jamie Dimon pegged them at around $2 billion but said they could move higher.
JPMorgan said Friday that the losses totaled $4.4 billion in the second quarter and Dimon said the most the firm could still lose is $1.7 billion. But he also noted that “it doesn’t have to lose money at all.”
Dimon said the CIO would no longer trade derivatives, which were behind the big loss. Instead the investment bank will be unwinding the original trades.
He said the firm has already reduced its position in an obscure index known as IG-9, where the CIO’s bets were made, by 70%. “What remains isn’t that big of a deal,” said Dimon.
We were told it was not a big deal at $2 Billion. When does it become a big deal?