[Tyler_JC]

Maybe the Street was expecting a 93% loss and a 53% loss ends up looking like a gain?

The whole market is based on a game of expectations.

If the Street expects 10 billion and you make 9 billion, your stock crashes.

If the Street expects you to lose 17 billion and instead you only lose 15 billion...your stock goes up massively.

I bought a bunch of Freddie Mac a couple days ago when it touched $6 a share...now it's at $8.

But the company is actually in worse shape today at $8 than it was at $6. It's just that the expectation was for Freddie to go bankrupt by August. Now it will be bankrupt in September and that's considered good news by investors.


Eventually the real world will catch up with the stock market and shares will begin to price in the impending massive recession.

[Sixstrings]

$this->bbcode_second_pass_quote('', '[')b]JPMorgan Chase Admits Big Losses On 'Egregious' Credit Trades

JPMorgan Chase has suffered big, unexpected losses at a closely watched trading desk, providing fodder to supporters of a new financial regulation the bank's CEO has loudly opposed.

The biggest U.S. bank by assets said on Thursday that it had lost $2 billion on bad bets on credit derivatives, made by a London trading desk, run by a man other traders have alternately dubbed "The London Whale" and "Voldemort." The office is intended to hedge the giant bank's credit risk, not increase it.

In a regulatory filing on Thursday, the bank said that, since the end of March, its chief investment office "has had significant mark-to-market losses in its synthetic credit portfolio, and this portfolio has proven to be riskier, more volatile and less effective as an economic hedge than the firm previously believed."

In a quickly scheduled conference call Thursday evening, CEO Jamie Dimon, who has been persistently critical of government efforts to regulate banks, said JPMorgan's trading losses were due to "egregious and self-inflicted mistakes," from trades that were "poorly executed and poorly monitored."

In recent months, news reports had alleged the office's trading desk was engaged in speculative trading, not hedging. Supporters of financial regulation used the reports as evidence of the need for the "Volcker Rule," a feature of the Dodd-Frank financial-reform act that would prohibit government-insured banks from taking big market bets with their own money.
http://www.huffingtonpost.com/2012/05/10/jpmorgan-chase-london-whale_n_1507662.html

[Sixstrings]

They may have another $3 billion loss on top of that..

$this->bbcode_second_pass_quote('', '[')b]Is JPM Staring At Another $3 Billion Loss?

The red vertical arrow shows the current dislocation if one assumes the cessation of Iksil's unwind efforts stalled IG9's selloff - which is the $3bn loss that remains to be seen and the black dotted line is an indication of the kind of notional unwind that would occur - which with a market moving as it is - would be highly disjointing.
http://www.zerohedge.com/news/jpm-staring-another-3-billion-loss

[radon]

From the zerohedge article, it looks like the trader took some stupid positions, why would he do it. This specifics of the case looks more like a failure of the bank's internal controls rather than regulatory oversight. Regardless of whether the regulation is in place, if the internal controls fail in the future, the same story may happen again.

[Cloud9]

J.P. runs the snap program.

[Sixstrings]

$this->bbcode_second_pass_quote('radon', 'F')rom the zerohedge article, it looks like the trader took some stupid positions, why would he do it.

[radon]

$this->bbcode_second_pass_quote('Sixstrings', '
')What's it like in Russia? Are banks banks over there or is it just like here, they can buy stocks be hedge funds and all that?

[Ache]

In new normal of trillion dollar bail outs, what is $2 BILLION? Its will soon be forgotten.

[Lore]

It's the implication of our large, to big to fail, institutions gambling. Resulting in an ultimate risk to the tax payer.

[Plantagenet]

Obama and the dems claimed that the Dodd-Frank bill was going to prevent this sort of thing happening again on Wall Street.

The massive MFGlobal fraud and now the JP Morgan credit default swap losses show that Dodd-Frank didn't fix anything.

[Lore]

$this->bbcode_second_pass_quote('Plantagenet', 'O')bama and the dems claimed that the Dodd-Frank bill was going to prevent this sort of thing happening again on Wall Street.

The massive MFGlobal fraud and now the JP Morgan credit default swap losses show that Dodd-Frank didn't fix anything.

[Plantagenet]

$this->bbcode_second_pass_quote('Lore', '')$this->bbcode_second_pass_quote('Plantagenet', 'O')bama and the dems claimed that the Dodd-Frank bill was going to prevent this sort of thing happening again on Wall Street.

The massive MFGlobal fraud and now the JP Morgan credit default swap losses show that Dodd-Frank didn't fix anything.

[Sixstrings]

$this->bbcode_second_pass_quote('radon', 'W')hat's important is that they are denied the taxpayer money. No more bailouts. You can introduce regulation, but then their internal controls will fail to notice that the regulation is not complied with, they will again have some gambling loss, and tell again "oh, sorry, we overlooked it, need to have another bailout". Let them go under, at least the investment banking divisions. More important and scarier for them than regulation.

[Sixstrings]

$this->bbcode_second_pass_quote('Lore', '')$this->bbcode_second_pass_quote('Plantagenet', 'O')bama and the dems claimed that the Dodd-Frank bill was going to prevent this sort of thing happening again on Wall Street.

The massive MFGlobal fraud and now the JP Morgan credit default swap losses show that Dodd-Frank didn't fix anything.

[radon]

If the bank suffered trading losses, then someone somewhere booked good profits. Knowing who took the profits may shed some light on the story.

[Lore]

$this->bbcode_second_pass_quote('Plantagenet', 'D')on't you even know what to do with crooks? Oh---thats right. You're a democrat
If the Obama administration wasn't corrupt, it would arrest and prosecute people like Obama crony John Corzine, former NJ gov (DEM) and US Senator from NJ (DEM) and head of MFGlobal when the money was stolen. The Congressional investigation of MFGlobal turned up emails that tied the theft of investors money directly to Corzine.
But instead, Corzine is an honored Democrat, and an Obama bundler on Wall Street and personally a FOO and big donor for Obama----so the Justice Dept. will look the other way.

[dolanbaker]

$this->bbcode_second_pass_quote('GASMON', '')$this->bbcode_second_pass_quote('', 'K')nowing who took the profits may shed some light on the story.