Financial Standard Comments - JPMorgan execs to resign over US$2bn trading loss Three JPMorgan Chase executives will resign this week following a US$2bn trading loss of synthetic credit securities, according to reports out of New York. https://www.financialstandard.com.au/feed/latest?story=12898998 Mon, 14 May 2012 17:22:12 +1000 Mon, 14 May 2012 17:22:12 +1000 en-AU Copyright 2026 Financial Standard 5 Comment by kafantaris () The derivative hedging game played by JPMorgan Chase is no different than that played by AIG in 2008.
Yet, Jamie Dimon tells us that Chase had merely "made a terrible, egregious mistake."
He might as well have said that Chase was wrong in raising in a game of poker, when it would have been more prudent to have folded. Why was Chase busy gambling right after our economic meltdown in the first place, and while fighting government regulations?
One answer is because Chase could bear the gambling losses.
That's right. With $2 trillion at hand, Chase can yawn when $3 billion goes down the tube.
Nonetheless, Dimon tells us that he sees no problem with the government dismantling big failing banks. This is good to know because the government should start dismantling big banks before they fail -- and before they have another chance to take us down with them.
The important lesson then from this Chase episode is not that stringent regulations are needed to reign in on derivatives, but that banks big enough to take a huge hit standing up, are ripe enough for us to chop them down to size.

Reply to article

For original story, Click Here.

]]> kafantaris () Mon, 14 May 2012 17:22:12 +1000