Stupidity in Banking.....Again.

[Jamie B]

http://finance.yahoo.com/news/calls-toughen-regulation-jpmorgan-loss-212428437--finance.html

Calls to toughen regulation follow JPMorgan loss

JPMorgan is the largest bank in the United States and was the only major bank to remain profitable during the 2008 financial crisis. That lent credibility to its tough-talking CEO, Jamie Dimon, as he opposed stricter regulation in the aftermath.

But Dimon's contention that the $2 billion loss came from a hedging strategy that backfired, not an opportunistic bet with the bank's own money, faced doubt on Friday, if not outright ridicule.

Looks like they did not learn from the 2008~2009 industry lessons.

[SADShooter]

if Uncle Nanny thinks you and I need bubble suits and crash helmets, why not banks?

[dogmush]

Let me see if I got this right after reading the article:

1. Banks still try to make money by attempting to outguess market changes and move money at opportune times.  That's the whole point of financial markets.

2. This practice carries a risk that if you guess wrong on the timing, you can end up with less money then you started with.

3. JPMorgan guessed wrong in some complicated market movements and lost $2 Billion dollars.

4. The $2B in question was the bank's money, not government funds and not depositor's funds.


So freaking what? Sorry for the shareholders, and whoever inside JPMorgan this'll get pinned on, but how is this a regulatory issue?  They took a risk, and flubbed it.  BFD.  It was their money to risk and lose.*


*Caveat: If they ask for tax payer funds to stay afloat, *expletive deleted*ck 'em.  That's what risk is about.  I said that with Goldman Sachs and Chevy too though.

[RoadKingLarry]

Is it still Bush's fault?

[Perd Hapley]

Looks like they did not learn from the 2008~2009 industry lessons.

Still not as bad as President Obama lecturing banks to make more loans.

[Fly320s]

Dogmush nailed it.

[French G.]

Play big games, win or lose big prizes. If you believe that all risk can be mitigated, please come play a game with me, bring money.

[TommyGunn]

JPMorgan lost one tenth of one percent of their total assets. 
The U.S. Government is 16 trillion in debt. 
Which entity would you prefer investing YOUR $$$$$$ in?   

[Jamisjockey]

What's next...high roller bailouts in Vegas? 

[Balog]

Let me see if I got this right after reading the article:

1. Banks still try to make money by attempting to outguess market changes and move money at opportune times.  That's the whole point of financial markets.

2. This practice carries a risk that if you guess wrong on the timing, you can end up with less money then you started with.

3. JPMorgan guessed wrong in some complicated market movements and lost $2 Billion dollars.

4. The $2B in question was the bank's money, not government funds and not depositor's funds.


So freaking what? Sorry for the shareholders, and whoever inside JPMorgan this'll get pinned on, but how is this a regulatory issue?  They took a risk, and flubbed it.  BFD.  It was their money to rik and lose.*


*Caveat: If they ask for tax payer funds to stay afloat, *expletive deleted* 'em.  That's what risk is about.  I said that with Goldman Sachs and Chevy too though.

The FDIC. As long as taxpayers are guaranteeing funds from the bank, there's a legitimate interest in making sure they don't gamble the funds we're on the hook for away.

[dogmush]

The FDIC. As long as taxpayers are guaranteeing funds from the bank, there's a legitimate interest in making sure they don't gamble the funds we're on the hook for away.

But they didn't.

The FDIC insures depositors funds from loss.  JPMorgan made this hedge with their assets.

From the article:

"A mistake was made. Money is going to be lost. It's not customer money. It's not government money. It's JPMorgan's money, the shareholders of JPMorgan."

[Balog]

But they didn't.

The FDIC insures depositors funds from loss.  JPMorgan made this hedge with their assets.

From the article:

It was not a hedge, even though it was made with funds legally required to be used for hedging.

And this is an excellent example of why consumer banking and investment banking should not be commingled. If the company goes toes up through stupid and risky gambles, they cannot fulfill their contractual obligations to depositors and FDIC kicks in.