JP Morgan trader 'London Whale' blows $13bn hole in bank's value

[Eugene]

Source: The Guardian

JP Morgan trader 'London Whale' blows 13bn hole in bank's value

Simon Neville and Jill Treanor
guardian.co.uk, Friday 11 May 2012 20.15 BST

The City trader at the centre of a $2bn trading loss at JP Morgan Chase had returned to his home in Paris on Friday as the repercussions of the loss spread across the markets.

Some $13bn was wiped off the value of America's largest bank after it admitted the scale of the trading activities of Bruno Iksil – nicknamed the London Whale for his bullish trading – and his colleagues in the bank's little known "chief investment office". The US Securities and Exchange financial watchdog was said to have begun reviewing the losses, the rating agency Standard & Poor's revised its outlook on the bank from stable to negative and Fitch Ratings downgraded it from A-plus to AA-minus.

Contacted by the Guardian, Iksil was reluctant to comment. He was thought to be in Paris and said: "I cannot talk about it. You will have to speak to the bank's representatives."

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A graduate in engineering from the École Centrale in Paris 20 years ago, Iksil had become so well known in the opaque $10tn market for credit default swaps – a complex type of insurance product – that he was nicknamed the "London Whale" and also known as Voldemort, after Harry Potter's nemesis.

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Read more: http://www.guardian.co.uk/business/2012/may/11/jp-morgan-trader-london-whale

[no_hypocrisy]

1. The banks won't necessarily need regulations to stop using derivatives and credit swaps

as long as the Federal Reserve stops bailing them out and let them eat their losses. When they lose money, they'll get the message.

[prairierose]

2. Is there any hope that will happen this time? n/t

[no_hypocrisy]

3. Deficit of $15 trillion plus.

We're out of money. Shhhhhhhhhhhh!

[freethought]

4. 13 Billion? I read it was $2 Billion?!

Just the other day an old friend who doesn't get finance too much emailed me with some tea-party-like rant on China buying some tiny portion of the U.S. retail banking market. He went on some anti-Obama tirade. It took me a few more emails to get him to do some of his own thinking. I had to make a clear point that foreign banks owning branches here in the U.S. is nothing new. Despite his tea bagger leanings he's a damned good drummer.

I finally made this point with these exact words: "I might tend to be more worried why J.P. Morgan lost $2 Billion in just a few weeks of trading. It indicates that the same reckless, high risk behavior that needed the U.S. taxpayers to fork over $800 Billion in bailouts for too-big-to-fail banks IS STILL GOING ON."

Silly me. It was actually $13 Billion. $2 Billion was lost by one guy. ONE GUY!

[JCMach1]

5. 13 was what go wiped out with the drop in stock price I believe...

for good reason...

If the company was that lax, what else is out there.

Dimon is as crooked and evil as they come.