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U.S. Morning Call: JPMorgan's $2 billion loss

Thursday, May 10, 2012 - 03:36

May 11 - JPMorgan Chase & Co said on Thursday that it suffered a trading loss of at least $2 billion from a failed hedging strategy.

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JPMorgan report said -- billion dollar trading loss. We operate in the risk business has not received particular base and we deserve any criticism we got so. You'll be given to us what progress do. Look at the impact on the bank that market and diamonds reputation but first details on the announcement. The investment bank saying late Thursday on hastily called conference call -- -- coming from a failed hedging strategy. -- SEC filing JPMorgan said it had significant. Mark to market losses -- synthetic credit portfolio. Which typically includes derivatives and away intended to mimic the performance of the securities. The bank estimating that business unit with a portfolio will post a loss of 800 million dollars. Overall the current quarter when other gains are factored in it originally forecast a profit of 200 million dollars for that unit. This has got to credit portfolio was the strategy to head the firm's overall credit exposure which is our largest -- overall distressed credit environment. We're reducing that hedge but in hindsight than your strategy is flawed complex. Fully reviewed poorly executed poorly monitored. The -- oil has proven to be riskier more volatile and less effective and economic edge that we saw. JPMorgan laws -- -- parading through the markets this morning Dow NASDAQ S&P 500 stock index futures all out with the tech heavy NASDAQ at least affected. JPMorgan itself out more than 7% in trading at Frankfurt. The US shares down a tad less than that in premarket trading here as brokerages cut their price target on the stock. Other financial out gulp it down more than 1% Morgan Stanley down about 3%. Bank of America and Wells Fargo also losing ground. The trades coming from the low heat and that's an office eight diamond -- the losses -- leads to a Wall Street Journal report last month. About it trader at nicknamed the London whale that reports that the trader amassed a large as it waits. -- spots that again Dimon JPMorgan yet expressed comfort with the position of the unit in an April conference call diamond called the issue a complete. Packet in -- -- Gold image looking hard -- this morning. The local banking executive and his arm that role in the demise of Bear Stearns Washington Mutual and MF global. So rivals may take some satisfaction. From seeing him stumble. He also loudly criticized moves toward increased regulation following the financial -- I was eating crow on all right he's aware that this that he that he is now and I think frankly is pretty angry about it. You know but then again and I think it's gonna actually undercuts. Anything he has to say about him as a voice of the banking industry at this point when you have this kind of you know blacks and mismanagement. Regulators and lawmakers are now likely to -- -- more details about industry analysts today at this point it's unclear whether they'll have a direct impact on the vocal role. Politicians taking the opportunity to criticize the bank. Michigan's seniors senator Democrat Carl Levin saying he'd be enormous -- JPMorgan and out is just the latest evidence. What banks call hedges are often risky bets that so called me to help banks. Have no business making. That's a morning call this Friday I'm runners up there this is -- -- there.

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U.S. Morning Call: JPMorgan's $2 billion loss

Thursday, May 10, 2012 - 03:36