Jamie Dimon’s Fortress Balance Sheet

May 10, 2012
J. Webster
Comments Off on Jamie Dimon’s Fortress Balance Sheet

JP Morgan, the so called greatest bank in the world, with the greatest banker in the world at the helm, Jamie Dimon, could face $3 billion in trading loses due to poor risk management. Dimon says an incident like this is why you have a “fortress balance sheet.” Well, a couple more of these “incidents” and that “fortress balance sheet” will start to fall apart. Here’s the news from the Wall Street Journal:

J.P. Morgan Chase & Co., the nation’s largest bank, surprised the market today, saying it has taken large losses stemming from derivatives bets gone wrong in the bank’s Chief Investment Office.

At 4:30, the bank sent out an unusual notice saying that it would be holding a call at 5 p.m. but included no details about what the call would be about. A person familiar with the matter said the call would include CEO Jamie Dimon and discuss the bank’s quarterly filing.

On the conference call, J.P. Morgan CEO Jamie Dimon said the bank had taken $2 billion in trading losses in the past six weeks and could face an additional $1 billion in second-quarter losses due to market volatility.

The Wall Street Journal reported in April that hedge funds and other investors were making bets in the credit-default swap markets to take advantage of volatility that stemmed from the trades done by a London-based trader that named Bruno Michel Iksil who worked out of J.P. Morgan Chase & Co.’s Chief Investment Office.

J.P. Morgan’s shares are down 5.5% after hours to $38.50.

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