You better sit down for this. Better still, how about a good
stiff drink? Bloomberg is out with a
deep dive on how JP Morgan's Chief Investment Office (CIO) got to be a much
riskier trading operation and how it's dealing with the fallout from last
week's revelation that its London office is facing a $2 billion trading loss
caused by mismanaged hedges.
Since then, the head of the CIO, Ina Drew, has stepped down
and she probably won't be the last to leave the bank.
This is obviously a perfect picture of what damage control
looks like, but lets not forget that the bank is still vulnerable. They are
still working on closing their positions, and that takes time (and some 'Navy
Seals')
So in the meantime, Bloomberg reports that the trades are
still losing money. That's no surprise, it's just that the number is staggering
— JP Morgan could lose an additional $1 billion as other investors capitalize
on its weakness….
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