JPMorgan

  • News

    Boaz Weinstein Finished Having His Way With Big Fish

    Saba Capital Management’s Boaz Weinstein recently exited a now famous and profitable credit derivative bet against JPMorgan, according to sources familiar with the trade. In May, JPMorgan reported a $2 billion trading loss in its chief investment office, due to large bets on an obscure group of indexes that track the performance of corporate bonds, […]

    / Jun 26, 2012 at 5:02 PM
  • News

    Moody’s: Banks Do Things That Are Bad And Good And Bad For Them

    Moody’s Investors Service downgraded the debt ratings of 15 major international banks and securities firms on Thursday, a move that could cost the banks billions of dollars in extra collateral…U.S banks that were downgraded included: Bank of America, Citigroup, Goldman Sachs, JPMorgan, and Morgan Stanley. “All of the banks affected by today’s actions have significant […]

    / Jun 21, 2012 at 5:54 PM
  • JPMorgan Flogging

    Representative Carolyn Maloney: Why Didn’t You Lose Billions Of Dollars In New York? What’s London Got That We Don’t?

    “Mr. Dimon, I thought you loved New York. Why did all this activity take place in London?”

    / Jun 19, 2012 at 12:18 PM
  • JPMorgan Flogging

    So What You’re Saying Is…It’s Possible

    Congressman: “Mr. Dimon, is it possible that JPMorgan could lose $2 trillion?”

    / Jun 19, 2012 at 12:15 PM
  • News

    Bruno Iksil: Genius

    Mr. Iksil [who sometimes wore the same clothing several days in a row] once confided to the colleague that when he wanted to avoid questions from supervisors about his trades, he sometimes would start discussing a mathematical term, equation or other technical jargon, to confuse and end the conversation. “He wasn’t trying to evade, he sometimes […]

    / Jun 19, 2012 at 10:06 AM
  • News

    So This Is Jim Cramer Talking About Jamie Dimon’s Capitol Hill Appearance

    “He didn’t win. He’s a loser. How? You lose when you go in front of Congress and you lose when you go out. Anyone that declares him a winner is wrong…He walked in a loser. Testified. Walked out a loser. And by the way, he agrees with me. He knows he’s a loser with no control and doesn’t even know what happened in his own bank…A loser. Crisis PR is psychiatry. You go in there as a guy who is stupid, you don’t come out being smarter. You don’t. You come out just as stupid…He’s a loser…This is not Michael Corleone with Frank Pentangeli in the back of the room. This is not Nevada gaming licenses…He’s a loser. It’s okay, man. He’s a loser. Maybe next year he’ll be a winner but he is a loser. Okay.”

    / Jun 13, 2012 at 5:39 PM
  • Whaledemort

    The Whale and the Quants

    If you’d like some non-real-time insight into the London Whale, may I highly recommend this oral history, by Edinburgh sociologists Donald MacKenzie and Taylor Spears, of how investment banks came to price and trade and hedge things like the index CDS that the Whale dabbled in? It made me tear up a little. It is […]

    / Jun 13, 2012 at 11:19 AM
  • JPMorgan Flogging

    Jamie Dimon: “We Are All Blessed To Have The American Financial System”

    “It is be the best in the world.” We should give thanks and “stop shooting each other.”

    / Jun 13, 2012 at 11:15 AM
  • JPMorgan Flogging

    Is It Polish Craps? Is It Ukrainian Blackjack?

    Senator Bob Menendez: I listen to this [hearing] and I paraphrase Shakespeare when I ask, a hedge or not a hedge, that is the question. Jamie Dimon: [staring]

    / Jun 13, 2012 at 11:12 AM
  • JPMorgan Flogging

    Jamie Dimon: Don’t Blame The Risk Committee!

    They took JPMorgan through the financial crisis “with flying colors.” The Whale stuff was a blip. [Related]

    / Jun 13, 2012 at 10:44 AM
  • News

    Should You Mourn For JPMorgan’s Trust Preferred Securities?

    I spend a good 40% of my day mindlessly refresing JPMorgan’s page at the SEC hoping they’ve filed a new structured notes prosupp so I was excited to see this: Following the Federal Reserve’s announcement on June 7, 2012 of proposed rules which will implement the phase-out of Tier 1 capital treatment for trust preferred […]

    / Jun 12, 2012 at 5:46 PM
  • News

    Jamie Dimon: It Most Likely Won’t Happen Again

    “When we make mistakes, we take them seriously and often are our own toughest critic,” Dimon said in the remarks ahead of his appearance before the Senate Banking Committee to discuss losses linked to credit derivatives by New York-based JPMorgan’s chief investment office. “While we can never say we won’t make mistakes — in fact, […]

    / Jun 12, 2012 at 5:14 PM
  • News

    Paying Bankers In Derivatives Worked Out So Well For Credit Suisse, Let’s All Do It

    BreakingViews has a couple of posts up about one of my favorite things in the financial universe, Credit Suisse’s habit of paying its bankers in structured credit instruments that take pages to describe. How’s that going? Great: Three years ago, around 2,000 employees were forced to take some $5 billion of the riskiest assets from […]

    / Jun 12, 2012 at 3:53 PM
  • News

    Volcker Rule Would Have Required JPMorgan Whale To Look Himself In The Mirror And Ask “Is This Really What I Want To Do With My Life?”

    It looks like London Whale Bruno Iksil is currently vacationing in a quantum state between fired and not-fired, which I suspect is relatively pleasant compared to, like, trading credit indices, and his immediate supervisors have all moved on to bluer oceans. But layers and layers of people above them continue to have to tug at […]

    / Jun 6, 2012 at 6:45 PM
  • Banks, News

    JPMorgan Has A Lot Of Great Things Going On This Quarter Other Than, Y’Know

    When the London Whale thing came out, JPMorgan made one sort of clever attempt to minimize it by saying this: Since March 31, 2012, CIO 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 […]

    / May 29, 2012 at 5:55 PM
  • News

    JPMorgan Risk Committee Directors Big On Life Experience, Wall Street Experience Less So

    The three directors who oversee risk at JPMorgan Chase include a museum head who sat on American International Group Inc.’s governance committee in 2008, the grandson of a billionaire and the chief executive officer of a company that makes flight controls and work boots. What the risk committee of the biggest U.S. lender lacks, and […]

    / May 25, 2012 at 10:45 AM
  • News

    Brian Moynihan Has Total Confidence In Jamie Dimon

    He’s got this.

    JPMorgan Chase Chief Executive Officer Jamie Dimon has the experience needed to manage the fallout from trading losses, and market disruptions haven’t been serious, Bank of America CEO Brian T. Moynihan said today. Trading didn’t freeze and markets behaved “reasonably well” given the circumstances after Dimon disclosed at least $2 billion in trading losses at JPMorgan’s chief investment office, Moynihan said today at a Manhattan investor conference. Dimon has shown he’s got the skills to handle the affair, said Moynihan, whose Charlotte, North Carolina-based bank ranks second by assets behind New York-based JPMorgan.

    [Bloomberg]

    / May 21, 2012 at 5:57 PM
  • News

    Confidential To One Small Arachnid: Jamie Dimon Is Coming For You

    The past couple of weeks, some might argue, have been the worst of Jamie Dimon’s professional career. Although being fired by Sandy Weill in 1998 was obviously a distressing time in Dimon’s life, a JPMorgan trader’s multi-billion dollar (and counting) loss appears to be even more painful for the CEO, who now has a reputation (and a title: “America’s Least Hated Banker”) to defend. While it’s unlikely that the blunder will cost him his job, every article written questioning Dimon’s judgment, suggesting that he is in fact fallible, and wondering aloud if he is simply a pretty face (that is about to get the regulation it has vociferously argued against rammed down its throat) clearly hurts. So far, Dimon has chosen to frame the situation, at least publicly, as a group fuck-up, one for which the responsibility is shared among himself, The Whale, The Whale’s bosses, and The Whale’s bosses’ bosses. Over the weekend, though, a heretofore unmentioned character, whose actions set in motion the events that served to tarnish JD’s halo, was added to story. And now, Dimon has a place to channel his anger: on a bloodsucking vermin whose days are numbered.

    Ever since JPMorgan Chase disclosed a multibillion-dollar trading loss this month, the central mystery has been how a bank known for its skill at risk management could err so badly. As early as 2010, the senior banker who has been blamed for the debacle, Ina Drew, began to lose her grip on the bank’s chief investment office, according to current and former traders. She had guided the bank through some of the most rugged moments of the 2008 financial crisis, earning the trust of Jamie Dimon, JPMorgan’s chief executive, in the process. But after contracting Lyme disease in 2010, she was frequently out of the office for a critical period, when her unit was making riskier bets, and her absences allowed long-simmering internal divisions and clashing egos to come to the fore, the traders said. The morning conference calls Ms. Drew had presided over devolved into shouting matches between her deputies in New York and London, the traders said. That discord in 2010 and 2011 contributed to the chief investment office’s losing trades in 2012, the current and former bankers said.

    “When Ina was there, things ran smoothly,” one former trader there said. But Ms. Drew’s firm hand began to weaken after she contracted Lyme disease. Her absences opened the door for tensions among her deputies to flare into the open…Most significant, her deputy in New York was increasingly at loggerheads with her deputy in London who spearheaded the strategy behind the losing bet, Achilles Macris, the current and former traders said. But there was only so much she could do when she was away.

    So, first off, the tick that bit Drew is a dead man (though probably a woman, as “the female adult is usually the one causing the most bites as males usually die after mating”). If people thought Dimon was mad after being informed of the losses, just wait. He’s going to find that bitch tick and shoot her with a cannon. Next, it’s time to put some safeguards in place to protect his bank from anymore “surprises.” Effective immediately, JPMorgan employees are banned from venturing into the forest, for any reason whatsoever. Same goes for grasslands, marshes, and anywhere tall grass grows. Anyone planning on prancing through the meadows in slow motion to meet up with and embrace a loved one in some kind of romantic gesture can forget it. The JMPorgan Outdoor Club is officially disband. Contact with children who are cub scouts is forbidden. Any girl scouts who attempt to set foot on the premises in order to sell cookies will be shot on sight. (These people are breeding grounds for ticks, what with their expeditions into the woods for merit badges and whatnot. He’s going first derivative here, while at the same time trying to not enact mandates that make him look ridiculous.)

    Discord at Key JPMorgan Unit Is Faulted in Loss [NYT]

    / May 21, 2012 at 1:37 PM
  • News

    Layoffs Watch ’12: JPMorgan

    Some people are keeping their London-based gigs (for now) and some people are not.

    JPMorgan Chase, the biggest U.S. lender by assets, will eliminate 20 investment-banking jobs in London as market conditions weaken, according to a person with knowledge of the cuts. The staff cuts aren’t related to the $2 billion loss at the New York-based company’s chief investment office in London, said the person, who asked for anonymity because the investment bank reductions haven’t been made public.

    [Bloomberg]

    / May 16, 2012 at 6:07 PM
  • News

    JPMorgan Isn’t Ready To Let Bruno Iksil Go

    You can take your said to be leavings and stick them where the sun don’t shine for all Jamie Dimon cares!

    Bruno Iksil, the London-based JPMorgan Chase & Co trader known as the “whale” believed to have been involved in the company’s $2 billion loss in derivatives, is still employed by JPMorgan, a spokeswoman for the bank said on Wednesday. Kristin Lemkau responded to a report on the New York Times website saying that Iksil is leaving the company. “He is still employed,” Lemkau said.

    JPMorgan still employs “whale” trader [Reuters]
    ‘London Whale’ Said to Be Leaving JPMorgan [Dealbook]

    / May 16, 2012 at 3:01 PM
  • News

    Trading Against Your Clients Works Best When You Lose Money

    This is sort of a strange footnote to the London Whale: one of the hedge funds that made money feasting off his carcass was run by JPMorgan*: Even as a trader for JPMorgan in London was selling piles of insurance on corporate debt, figuring that the economy was on the upswing, a mutual fund elsewhere […]

    / May 16, 2012 at 12:32 PM
  • News

    Jamie Dimon: JPMorgan’s Balance Sheet Still Fortress-Esque

    “We maintain a fortress balance sheet to manage surprises and setbacks like this,” Dimon said today. “I’m confident when we’re done here we’ll be a stronger company.” [Bloomberg, earlier]

    / May 15, 2012 at 4:23 PM
  • News

    Lloyd Blankfein Finally Gets To Be The Prettiest Girl At The Ball

    Time was, Jamie Dimon was the most popular CEO on Wall Street and America’s “Least Hated Banker,” for reasons that included the fact that the man has soulful blue eyes, charisma out the ass, and was in charge of one of the banks that a) didn’t go out of business during the financial crisis, like Lehman and Bear and b) supposedly didn’t actually need the bailout money the government made it take (as JD has said previously), like Bank of America and Citigroup. The man, in the hearts of many and especially the adoring press, could do no wrong. Which is why it probably stung a lot that Lloyd Blankfein, a Wall Street CEO who also possesses more charm than a person would know what do do with, who was also in charge of a bank that neither went out of business during the financial crisis nor required the bailout money it was forced to take (according to GS), and who is also the owner of a pair of baby blues, though in his case ones that sparkle, could only do wrong. And while LB is not one to gloat at another’s misfortune, especially that of a friend, he’s obviously feeling pretty good about being living proof of the old saying, “only one Wall Street CEO’s balls can be in a vise at a time,” and right now it’s JD’s turn.

    Dimon did not attend the annual Robin Hood Foundation party [last night], but Blankfein was there, enjoying a rare night out of the spotlight. He shook hands, introduced his wife and, grinning broadly, posed for pictures. For months, Goldman Sachs has been portrayed as the callous Wall Street behemoth whose executives collected giant bonuses while America’s housing crisis worsened and unemployment rose. But Monday night was different. “No one cares about Lloyd tonight. It is Jamie against the world, and that’s got to feel good for Lloyd,” another hedge fund manager said.

    And this is just the beginning. First, they stop calling you Satan and claiming you poisoned their food, next glowing profiles and cover stories devoting major column inches to your rippling biceps and the throngs of women you beat off with a stick.

    Dimon Pushes Blankfein Off Hot Seat At Charity Gala [Reuters]
    Robin Hood Scene: Blankfein, Soros, Rihanna [Bloomberg/Photo]

    / May 15, 2012 at 4:16 PM
  • News

    Jamie Dimon Might Clawback Whale Team’s Bonuses Or He Might Not

    Dimon was approached by reporters after the [shareholder] meeting and was asked about whether executive pay would be taken back under the bank’s clawback provisions. “We will do the right thing…And that may well include clawbacks,” Dimon said. “The buck always stops with me.” [WSJ, earlier]

    / May 15, 2012 at 12:26 PM
  • News

    New JPMorgan CIO Doesn’t Get Out Of Bed For Less Than A Great Depression-Level Financial Catastrophe

    Earlier today, it was announced that Matt Zames had been named JPMorgan’s new Chief Investment Officer, to replace Ina Drew, the woman who supervised the trader responsible for the firm’s whale of a loss and was dismissed over the weekend. Previously, Zames served as the firm’s head of fixed income and while he may be happy to be seen by senior management as a guy capable of putting out at a fire, based on his experience, is probably at least a little bit underwhelmed by the task.

    From Kate Kelly’s Street Fighters:

    Matt Zames had been down this road before. He had started his career at Long-Term Capital Management in the winter of 1994, shortly after college. There he witnessed firsthand what could happen when a bunch of shortsighted executives didn’t manage their risk properly…By the time he reached the sixth floor it was after midnight. His team was huddled with a group of Bear managers in one of the conference rooms. Zames had one question for the Bear team: How much cash and collateral did it have on hand?…Zames shook his head. “This isn’t going to be necessary,” he told them. “This whole thing is fucked.”

    Guy had a front-row seat for LTCM and Bear’s implosion and now he’s being asked to do what, exactly? Clean up a minor mess at a *solvent* bank? It’s almost a little insulting, actually. Call him when you’ve got SOMETHING REAL.

    JPMorgan Says Ina Drew to Retire, Replaced by Zames as CIO [Bloomberg]

    / May 14, 2012 at 12:25 PM
  • Banks

    Spare Some Worrying For Ratings-Triggered Collateral

    Remember how a week ago people went around bothering themselves about Bank of America’s derivatives? Specifically how if they get downgraded, as seems plausible, they will have to come up with a zillion more dollars for derivative collateral? And how earlier this week they did the same for Morgan Stanley? Anyway we talked about it […]

    / May 11, 2012 at 6:22 PM
  • News

    Fitch Has Something To Say About Fudgie

    “Manageable” but “raises questions.”

    Fitch Ratings has downgraded JPMorgan Chase & Co.’s (JPM) Long-term Issuer Default Rating (IDR) to ‘A+’ from ‘AA-‘ and its Short-term IDR to ‘F1′ from ‘F1+’. Fitch has placed all parent and subsidiary long-term ratings on Rating Watch Negative. Fitch has also downgraded JPM’s viability rating (VR) to ‘a+’ from ‘aa-‘ and placed it on Rating Watch Negative. In addition, Fitch affirmed JPM’s ‘1’ support rating and ‘A’ support rating floor. The rating actions follow JPM’s disclosure yesterday of a $2 billion trading loss on its synthetic credit positions in its Chief Investment Office (CIO). The positions were intended to hedge JPM’s overall credit exposure, particularly during periods of credit stress.

    Fitch views the size of loss as manageable. That said, the magnitude of the loss and ongoing nature of these positions implies a lack of liquidity. It also raises questions regarding JPM’s risk appetite, risk management framework, practices and oversight; all key credit factors. Fitch believes the potential reputational risk and risk governance issues raised at JPM are no longer consistent with an ‘AA-‘ rating.

    Fitch Cuts JPMorgan Ratings [Reuters]

    / May 11, 2012 at 4:50 PM
  • News

    JPMorgan Chief Risk Officer: “I want to reiterate the critical role that we play at J.P. Morgan Chase”

    In case that was unclear. Also, no more “surprises” like you know what again, please.

    / May 11, 2012 at 2:59 PM

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