May 21, 2012
When JPMorgan first announced that its CIO office had blundered into a huge trading loss, the number was pegged at $2 billion, though the company said it could go higher.
Then the loss was reported to be $3 billion.
$5 billion or more?
The nation’s largest bank has said publicly that its losses on the trades have surpassed $2 billion, and people familiar with the matter have said they could over time reach $5 billion.
But the losses could be even bigger if the company sells its positions into a market that has turned against its positions, some traders say. Improvements in the markets could slice the bank’s losses.
So the basic issue seems to be: Unwind now and stomach large losses, or wait and hope that things improve.
Either way, it’s clear that JPMorgan has a live and active problem on its hands.
This article was posted: Monday, May 21, 2012 at 7:14 am