Dancing With Derivatives 'Pas De Deux'

The newly coined phrase, from Maureen Dowd of the New York Times comes from the latest two-step by Jamie Dimon, CEO at JPMorgan, where he managed to orchestrate Wall Street's latest big bank debacle.  He'll soon be "Dancing with the Stars" in front of congress explaining his mis-adventure that created a $2 Billion trading loss, which could exceed $3 Billion when the dust settles, from a credit-default swap deal gone wrong.  Keep in mind that these are the same derivatives that helped trigger the financial crisis - sans mortgages.  Even though Ina Drew, JPM's Chief Investment Officer immediately got the ax, there will surely be more hell to pay before this is over.

Scheduled to appear in front of Congress in the spring, Dimon this week apologized to the bank's shareholders for the loss. "This should never have happened. I can't justify it. Unfortunately, these mistakes are self-inflicted," Dimon said at JPMorgan's annual meeting. And he later told reporters, "The buck always stops with me."

News of JPMorgan's 
trading loss has reinvigorated the Democrats' push to strengthen a key rule (known as the the Volcker Rule) mandated under the 2010 regulatory overhaul that would restrict banks from trading for their own profit.


Dimon has been among the most outspoken critics of the rule. He says "their recent loss came from a hedging strategy that backfired, and not a bet with the bank's own money. Whose money was it then I wonder?

He and other bank executives successfully pushed for an exemption, which would allow banks to make trades for their own profit if they are hedging against risk.

"They simply got caught short" said one anonymous trader. While J.P. Morgan shareholders continued to back Dimon, Washington isn't quite as forgiving given the huge bank bailouts recently granted.

The good news is this latest loss only wiped out about 1% of the firm's capital. Even with a $2 billion write-off the bank reported $190 billion as equity in its just-released first quarter 10Q. Dimon also said that the bank would still earn around $4 billion for the quarter, versus $5.4 billion last quarter.

Too big to fail, you bet! But what would you do?


Views: 53

Comment

You need to be a member of San Pedro News Pilot to add comments!

Join San Pedro News Pilot

Call (323) 200-9052 to learn more or click here to send an email.

San Pedro Weather

San Pedro News Pilot by email - sign up!

Delivered by FeedBurner

What is the SanPedroNewsPilot.com?

The SanPedroNewsPilot.com is the social network and information outlet for San Pedro.

Want to keep up with the news in San Pedro, become a member.


 

Membership has its privileges!

• Got news you think everyone should know? Blog it.
• Have a show or attending a benefit? Put it on the calendar.
• Got video of the big game? Embed it.
• Photos of the new storefront or the school play? Upload them.

Latest Activity

Lisa's event was featured
Thumbnail

Pick of the Vine: Season 13 THIS YEAR’S BEST SHORT PLAYS at Little Fish Theatre

January 9, 2015 at 8pm to February 14, 2015 at 10pm
Jan 9 – Feb14, Fri & Sat @8pm Sun Jan 18*, 25 & Feb 1 @ 2pm; Thu, Feb 5 & 12@ 8pmThis extremely popular presentation of 10 freshly chosen short plays returns for its thirteenth season.Directors: Cylan Brown, Danielle Ozymandias, James Rice, and Margaret SchugtA veritable bounty of short plays offered up by authors from all over the world. What happens when you don’t throw a pinch of dropped salt over your shoulder? Or to the trash you throw out? Or when a prank phone call turns into…See More
3 hours ago
People's Place & Palace's event was featured
Thumbnail

People's Place presents an Elk's New Year's Eve at People's Yoga Health & Dance

December 31, 2014 at 9pm to January 1, 2015 at 1am
Come on out and party it out at People'sDecember 31, 2014 from 9PM to 1AM Admission is $40 per personandALL proceeds benefit the San Pedro Elks Lodge Rebuild Fund Tickets are available in studio and lodge only. Music will be provided by Down the HatchFood and Drinks are included! For more information you can contact: People's Place(310)547-2348peoplesyogahealthdance@gmail.com Sacha Bailey(310)831-0624…See More
3 hours ago
Heather Caine's event was featured
Thumbnail

Holiday Pops Spectacular at Warner Grand Theatre

December 20, 2014 from 8pm to 10pm
Golden State Pops Orchestra returns for their 11th season, opening with an annual favorite concert of seasonal musical works and the GSPO Chorale. A feast for the ears and eyes – for the whole family.Tickets: $22 - $60 at gspo.comSee More
3 hours ago

Sports Editor
Jamaal Kellen Street's 3 blog posts were featured
3 hours ago

Sports Editor
Jamaal Kellen Street shared their blog post on Facebook
13 hours ago

Sports Editor
Jamaal Kellen Street promoted Jamaal Kellen Street's blog post Former SPHS Football Star Kenny Potter Signs With SJSU
13 hours ago

Sports Editor
Jamaal Kellen Street posted a blog post

Former SPHS Football Star Kenny Potter Signs With SJSU

It may have taken three hard years of junior college to get it done, but the call has finally been answered for former San Pedro High football star Kenny Potter.The three-sport standout in his four years at San Pedro was more than primed for a blossoming future in playing Division I football in the NCAA, but never got the…See More
13 hours ago
Harbor shelter posted a photo

christmas poster

Harbor Animal Shelter957 N Gaffey St.San Pedro Ca 90731Harbor Animal Shelter is doing a Christmas donation drive for our lovely residents here at the animal shelter! Please help out the animals this year and give a gift they will love! Have a Merry…
yesterday

© 2014   Created by San Pedro News Pilot.

Badges  |  Report an Issue  |  Terms of Service