Quote:
Originally Posted by mykalberta
Its sweet justice cause this is the guy who was leading the charge for less regulation. I could try to be sorry for the house of Morgan, but it would be an outright lie.
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I wonder how big this loss will really end up being.....nobody knows the exact nature of the hedge that they were trying to execute (London Whale) It is a black box so if they are saying 2-3 Billion you can bet it will be more than that. Unwinding a trade of this size is not going to be easy. Similar sized trade took down MF Global. JP is lucky that they are large enough to handle a loss like this and it just blows a piece of their balance sheet apart.
Banks rely way too much on trading these days and a company like Goldman makes 90% of its money from trading. Some of these large trades if done by enough companies could once again bring down the economy. If they aren't going to properly disclose things and nobody knows what they are really up to (including the SEC) they restrict them and have Wallstreet type banks and commercial deposit/loan banks. Everything becomes smaller and simpler. Mistakes like this most recent one that could spread as you go through the credit cycle are far too dangerous. Wallstreet is the one area in life where history repeats itself over and over again. King Jamie
