JPM losses increase...

GDB2222

Generali wrote: »

Morgan Stanley (and goodness knows why they think they know) reckon losses could end up as big as $5,000,000,000.

JPM still aren't saying what the losses are in. Can't say I blame them.

Rumour has it that it was a trade that started out as a hedge which then started making money. As Proctor & Gamble (the soap people) found out, that can be a very seductive and dangerous thing.

Again as the rumour goes, the trading desk started trying to make a little money by taking positions that were larger than strictly necessary.

Whatever the truth, it's all good clean fun. Gotta love a big loss by your rivals.

How big is $5bn to JPM? It sounds like half of what they were planning to spend on buying back their own shares/supporting their share price.

Their profit for 2011 was $19bn. $5bn loss one quarter - just shrug it off and carry on.

Of course, part of the $19bn profit came from risky trades that they will not now repeat. Still, on a P/E of 7 it does not seem that bad a deal. What am I missing?

mst007

@GDB2222: The Glass Steagall Act was repealed in 1999, we followed suit. It was originally introduced in 1933 and prevented commercial banks which took deposits from embarking on risky trading activities - in order to prevent another Great Depression. Politicians need to re-read their history books instead of gunning for lower-dem votes.

The-Joker

IronWolf wrote: »

JPM are far too big to fail, they're the biggest bank in the US by assets.

L.Bro's, bear sturns and MF global were all too big to fail. But they failed.

IronWolf

GDB2222 wrote: »

How big is $5bn to JPM? It sounds like half of what they were planning to spend on buying back their own shares/supporting their share price.

Their profit for 2011 was $19bn. $5bn loss one quarter - just shrug it off and carry on.

Of course, part of the $19bn profit came from risky trades that they will not now repeat. Still, on a P/E of 7 it does not seem that bad a deal. What am I missing?

I agree its quite cheap, unless this kind of thing is rife in JPM and this is the tip of the iceberg. With banks, its hard to know what they're up to really, you just have to have faith in the management.

The-Joker

IronWolf wrote: »

I agree its quite cheap, unless this kind of thing is rife in JPM and this is the tip of the iceberg. With banks, its hard to know what they're up to really, you just have to have faith in the management.

Faith in the banks you have to be kidding. There are now bank runs all over Europe. It has spread from Greece and now bank runs in Spain. We could well see a run on JPMoron as more news comes out.

If I was a JPM customer with large funds with them I would be thinking twice now about getting out while I still can. I bet all those who thought their funds were safe in MF global wished they got their funds out before it was too late.

IronWolf

The-Joker wrote: »

L.Bro's, bear sturns and MF global were all too big to fail. But they failed.

Bear Stearns didn't fail, it was bought by JP Morgan, essentially a private bailout. I dont think there are any banks that could do a private bailout of JPM.

MF Global was pretty small, and Lehman Brothers was too big to fail, it was a mistake to let it do so and one of the reasons we had such a severe financial crisis. I'd hope the US authorities dont make the same mistake twice.

The-Joker

IronWolf wrote: »

Bear Stearns didn't fail, it was bought by JP Morgan, essentially a private bailout. I dont think there are any banks that could do a private bailout of JPM.

MF Global was pretty small, and Lehman Brothers was too big to fail, it was a mistake to let it do so and one of the reasons we had such a severe financial crisis. I'd hope the US authorities dont make the same mistake twice.

You talk as if its just a case of giving more bailouts to the likes of JPM and then everything will be rosey again.

Do you not think all the propping the system up a little longer has just pushed the problems into the future but made them worse?

IronWolf

The-Joker wrote: »

Faith in the banks you have to be kidding. There are now bank runs all over Europe. It has spread from Greece and now bank runs in Spain. We could well see a run on JPMoron as more news comes out.

If I was a JPM customer with large funds with them I would be thinking twice now about getting out while I still can. I bet all those who thought their funds were safe in MF global wished they got their funds out before it was too late.

I said faith in the management. The "bank runs" in Spain are not caused by Greece, they're a separate issue and it isn't the sign of bank runs spreading across the world.

The-Joker

JPMorgan Chase loss only going to get worse

The number being bandied about now is closer to a range of $6 billion to $7 billion, according to several people working on trading desks that specialize in the derivatives JPMorgan Chase (JPM, Fortune 500) used to make its trades and from two sources with knowledge of the bank's position.

JPMorgan Chase declined to comment on its trading activities. Of course, it is impossible to know with absolute certainty just how high the losses are at any given moment.

http://money.cnn.com/2012/05/18/markets/jpmorgan-loss/

The-Joker

IronWolf wrote: »

I said faith in the management. The "bank runs" in Spain are not caused by Greece, they're a separate issue and it isn't the sign of bank runs spreading across the world.

It the same issue, what are you talking about?

Its the GFC, its all the same issue. There is only one global financial crisis!