Thursday, June 28, 2012

Well, when you are the Biggest Bank


It is only fair that you have the biggest losses when you get you nuts caught in a salad shooter.
The losses from JPMorgan’s botched derivatives trade may reach $9 billion, nearly five times the amount announced in May, the New York Times reported Thursday.

The Times quoted an unnamed source as saying a report generated in April showed that in a worst-case scenario the losses from the trade could reach $8-9 billion, but said some regulators expect something closer to $6-7 billion.

Last week the CNBC business news network had also said the final losses would not exceed $6-7 billion, given that the company had moved quickly to unwind the position.
Sure they are big enough to take this loss, but there is one important point to remember. These losses were not from a trading unit prepared to take risks. These losses were generated by the unit charged with mitigating losses. Brand all those BSD with a L on their foreheads.

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