As Feared, JPMorgan's Losses Are Growing; Reportedly At $3 Billion
The word on Monday that JPMorgan Chase's losses from risky trades that went wrong could climb from $2 billion to perhaps as high as $4 billion in coming quarters is being bolstered this morning.
"The trading losses suffered by JPMorgan Chase have surged in recent days, surpassing the bank's initial $2 billion estimate by at least $1 billion, according to people with knowledge of the losses."
As Deal Book reminds us:
"When Jamie Dimon, JPMorgan's chief executive, announced the losses last Thursday, he indicated they could double within the next few quarters. But that process has been compressed into four trading days as hedge funds and other investors take advantage of JPMorgan's distress, fueling faster deterioration in the underlying credit market positions held by the bank."
The blog also points out something that's been said many times in recent days: that the bank has been earning big profits overall in recent quarters, and is expected to do so again in coming quarters. So, it should be able to absorb the losses from blunders made by traders in its London office.
Regarding that London office,The Wall Street Journal this morning profiles JPMorgan trader Bruno Iksil, the "caveman" who became a "whale." It reports that "months before ... Iksil became famous as the 'London whale,' the trader who contributed to a loss of more than $2 billion at J.P. Morgan Chase & Co., he earned a different nickname: the 'Caveman,' for pursuing trades that rivals sometimes thought were overly aggressive but often led to huge profits."
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