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Benni
Original Poster
1,707 posts
80 months
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As I have read in papers that JP Morgan Chase have lost billions of $ ,
and a trader working/misspeculating in London seems to be the culprit,
I was looking for a thread covering this but found none about the "London Whale" ?
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Jimbeaux
25,725 posts
100 months
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Benni said: As I have read in papers that JP Morgan Chase have lost billions of $ ,
and a trader working/misspeculating in London seems to be the culprit,
I was looking for a thread covering this but found none about the "London Whale" ? Remember, that loss did not come from the funds that are in peoples' CDs, 401Ks, etc. That loss came from their investment funds, their profits. They are in the business of risk and investment, sometimes they lose. JPM has approximately $300 Billion in play, 2 Billion is not going to kill them.....can't win evry risk.
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davepoth
19,884 posts
68 months
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Jimbeaux said: Remember, that loss did not come from the funds that are in peoples' CDs, 401Ks, etc. That loss came from their investment funds, their profits. They are in the business of risk and investment, sometimes they lose. JPM has approximately $300 Billion in play, 2 Billion is not going to kill them.....can't win evry risk. Also, they net something like $5bn a quarter; they'll still make $20bn pre tax this year. Assuming they don't find out that he misplaced the decimal point, a guy will get fired, some other people won't be able to buy a new Porsche, and that will be the end of it.
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eharding
6,397 posts
153 months
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davepoth said: Jimbeaux said: Remember, that loss did not come from the funds that are in peoples' CDs, 401Ks, etc. That loss came from their investment funds, their profits. They are in the business of risk and investment, sometimes they lose. JPM has approximately $300 Billion in play, 2 Billion is not going to kill them.....can't win evry risk. Also, they net something like $5bn a quarter; they'll still make $20bn pre tax this year. Assuming they don't find out that he misplaced the decimal point, a guy will get fired, some other people won't be able to buy a new Porsche, and that will be the end of it. ...and whoever it was who gave JPM a wedgie will have trousered a large amount of cash - presumably the hedgies?
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speedy_thrills
5,640 posts
112 months
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Most of the concern was actually that Morgan & Chase had been good at this sort of thing, if they've been cornered who else is in trouble? It's added some weight to the proponents of this Volcker rule in the U.S.
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Jimbeaux
25,725 posts
100 months
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speedy_thrills said: Most of the concern was actually that Morgan & Chase had been good at this sort of thing, if they've been cornered who else is in trouble? It's added some weight to the proponents of this Volcker rule in the U.S. There is an argument that over-regulation actually contributed to the loss.
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12gauge
1,274 posts
43 months
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Jimbeaux said: Remember, that loss did not come from the funds that are in peoples' CDs, 401Ks, etc. That loss came from their investment funds, their profits. them.....can't win evry risk. Didnt people think the same about MF Global? I wouldnt trust these companies to look after any of my money, whether its JPM or anyone else... They're by design filled with Nick leeson narcissistic types who cant own up to their failings when they should, people who think just one more bet and i'll make it back, who simply cant comprehend they could get it wrong.
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speedy_thrills
5,640 posts
112 months
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Jimbeaux said: speedy_thrills said: Most of the concern was actually that Morgan & Chase had been good at this sort of thing, if they've been cornered who else is in trouble? It's added some weight to the proponents of this Volcker rule in the U.S. There is an argument that over-regulation actually contributed to the loss. Perhaps. The point is actually one of free market principal to me, how can we expect very large financial businesses to behave responsibly with government assistance mechanisms in place? A "too big to fail" bank (for a little while longer anyway, I understand that there are moves afoot to have an organised run-down next time this happens) is still playing with derivatives which is a pretty risky game. The issue of the $2bn (or however much they taken when they manage to unwind their positions) lost is of little concern except to the traders and managers who planned and executed these trades, Morgan & Chase itself isn't in any danger one way or another.
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munky
5,255 posts
117 months
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speedy_thrills said: Perhaps. The point is actually one of free market principal to me, how can we expect very large financial businesses to behave responsibly with government assistance mechanisms in place?
A "too big to fail" bank (for a little while longer anyway, I understand that there are moves afoot to have an organised run-down next time this happens) is still playing with derivatives which is a pretty risky game. The issue of the $2bn (or however much they taken when they manage to unwind their positions) lost is of little concern except to the traders and managers who planned and executed these trades, Morgan & Chase itself isn't in any danger one way or another. All banks use derivatives, as do all fund managers, as do insurance companies, as do many others including farmers, airlines, oil companies. Derivatives can be used to reduce risk, as well as to take risk.
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NorthernBoy
6,023 posts
126 months
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12gauge said: Didnt people think the same about MF Global?
I wouldnt trust these companies to look after any of my money, whether its JPM or anyone else...
They're by design filled with Nick leeson narcissistic types who cant own up to their failings when they should, people who think just one more bet and i'll make it back, who simply cant comprehend they could get it wrong. What do you mean "the same"? MF global was a brokerage house that decided to try and play with the big boys, lacked the expertise, and blew up. As to your other assertions, that's just silly. We "own u" to our failings or successes each and every day, when we add up precisely how much we have made or lost. Compare it to virtually any other job, and you'll see that the "high risk" bankers that you don't like are actually presented with their failures far more clearly and unarguably than the others.
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