Jpm $2 Billion Loss

Market volatility = "we keep on betting against the real world".

What I don't uderstand is why such important banking institutions such as JPM should involve themselves in high risk gambling.

It is NOT their money, it belongs to their investors. That money should be invested with due diligence, not gambled.

Trading all the paper with no underlaying assets and taking the big commissions. The house of cards falls apart eventually. Very frightening when you look at the monster of short sales/derivatives and other hedges no one can even describe

JPM is claiming 4 billion profit none the less for the quarter, but never does a 2 billion dollar blow help, an the ripples from such a loss should be felt for some time....

Wonder what happen to ol JPM there? They were so busy perhaps drivin down the PM market, that they got caught with their pants down and their hand in the cookie jar at the same time I figure. Interesting quote below....

"The bank, betting on a continued economic recovery with a complex web of trades tied to the values of corporate bonds, was hit hard when prices moved against it starting last month, causing losses in many of its derivatives positions. The losses occurred while J.P. Morgan tried to scale back that trade.

The bank's strategy was "flawed, complex, poorly reviewed, poorly executed and poorly monitored,"

That all sounds like a bunch of red tape smoke an mirror BS to me, so complicated an probably based so on design so as NO HUMAN with a mind short of Stephen Hawkins could ever crack that code which is their or any big bankers true books of business....

Someone should have asked at that point, "So, just who was in charge?". Like the captain of a ship, the CEO IS responsible for everything that a company does or fails to do. A Japanese banker in this position would have been getting the red rug ready.



Probably for the very same reasons why people go to the casinos and gamble: the lure of that BIG WIN! Not that this is how banks SHOULD operate but it does seem to be their MO these days. WFC is a notable exception to this and has largely avoided betting on derivatives.



For sure, Hawk, but we only have Dimon's word for the magnitude of these profits and losses. What he is NOT saying might well be a lot more interesting than what he is saying.



I agree with that completely. That was a classic case of unwarranted government intervention via their primary philosophy: If it ain't broke, fix it 'til it is!

It is unfortunate but we no longer have a free market or capitalism in the USA. Thanks to the gov and the fed manipulating and distorting the formerly free market, we now have crony capitalism. IMHO, this is but a baby step from fascism... the merger of business and government. When two titans come together, all of the little folks get stepped on.

To work well, capitalism MUST purge the market of bad ideas, dead wood, and things that just plain do not work. When this purging is done on a routine basis, some investors lose their money but the system remains healthy and vibrant. Lost money can be made again but only if the system is vibrant and healthy. The current market is FAR from either of these.

Poorly run companies fail and their assets are sold off to other companies that are better run and who will deploy those assets in a more efficient and profitable manner. Unfortunately, the gov is no longer letting poorly run big businesses fail. They keep propping them up with tax-payer money, printed money, and borrowed money. All the gov is doing is enabling incompetence. This is not a formula for success. It is a formula for failure. We saw that with the USSR. This is exactly what they did and they failed utterly. If we do the same things that they did, we can expect the same results.

Bankruptcy exists for a reason. This is the probate court of business. A failed business should be sold off and its creditors reimbursed to the extent possible. It should be a REAL bankruptcy too and not some contrived gov sponsored dog-and-pony show that only looks like bankruptcy but isn't. We really do not need any more GM sideshows ever again. Unfortunately, when they reward incompetence, they set the stage for repeat performances.

Yes they will be so taken care of and basically rewarded instead of going to jail!