JPMorgan Loss Passes $3B
Bank bleeds a billion after rivals cash in on its bad bets
By Rob Quinn,  Newser Staff
Posted May 17, 2012 3:40 AM CDT
Updated May 17, 2012 5:31 AM CDT
A very complex and very bad bet on credit markets has cost JPMorgan Chase more than $3 billion.   (AP Photo/Mark Lennihan)

(Newser) – JPMorgan's $2 billion trading loss has become a $3 billion-and-counting loss with dizzying speed, insiders tell the New York Times. CEO Jamie Dimon predicted that the loss could double within a few quarters, but the extra billion in trading losses has come in just four trading days as hedge funds and other investors smell blood and bet against the positions the bank is believed to have held to hedge against defaults.

JPMorgan's "London whale" trader was such a big player on the obscure indexes at the heart of the bank's problems that other traders are finding it easy to identify his trading positions, Reuters notes. "When someone is that big in the market, anonymity really goes out the window," notes a debt trader. The Justice Department and Federal Reserve are probing the losses, which experts say should never have been allowed to happen at a bank with government-backed deposits. But JPMorgan remains relatively healthy, despite the losses. The $3 billion loss would need to double to wipe out its profit from the second quarter of this year.
 

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