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American Banker Reporter Jeff Horwitz and Zacks Investment Research’s Jared Levy on where the fault lies for the bank’s losses.
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Once spot to be a shining star.
Sinking like it's on tonight JPMorgan Chase warning of major losses joining me now Jeff Horwitz of American banker and -- believe they have Zacks investment research Jerry do you.
You believe these are unintended consequences.
Of Dodd-Frank house up.
I believe the Dodd-Frank it it it you know.
What -- -- it judicial -- idealist but protect it back -- -- -- the bank aggregate -- but you're never you're as separating a break you're responsible and I think that break the progress both.
Could be contributing factor -- didn't give a government that spent.
There's been a rogue trader out there is making big bet nobody is going -- If the -- just too big chair and.
That could be -- well but again at big banks with PayPal you should be able to relate where.
To a central point in other words they're your head of -- they are well.
While this guy out Monday that the big bond position on -- know what he -- shorted you know whatever it is a billion dollars PDF -- why -- back at.
You know probably coming about the position that these -- what -- be happening and obviously it wasn't that so we would do -- are trading environment and out of the idea that -- -- -- -- All right Jeff.
You know I've got to wonder.
Is this just the beginning of bad news for JPMorgan Chase on this topic is there more to come.
Well this certainly they're going to have potentially more losses coming from this these positions are still open Jamie Dimon warned they're going to be outstanding for a couple quarters the very least.
The value at risk which is an element of how much they can potentially lose this remains elevated.
And at this point hedge funds and everyone else.
Knows they're stuck in these positions even if they won't pursue a precisely describe them I'm sure other people in the market certainly know that so there's absolutely fire fire itself potentially yeah.
So this is just gonna continue we're gonna continue get bad news from JPMorgan connect.
-- -- -- -- you could now one thing Jared said that I take issue with.
-- this was a rogue trader there's actually no indication of that in fact I might be the only person here tonight we defend Bruno.
It be London whale.
But this guy was in a very centralized office it was not a balkanized -- mechanism.
And he would presumably doing exactly what was posted to this is not this is not one man's fault it's the organization got -- I disagree I disagree there I am actually -- trader -- -- guy went to repeat ballistic -- You know when you're over hedging your doctor to look into again quickly -- that there's -- repeating on.
Didn't need it doesn't make any debt.
And in any educated -- greater.
Obama to that -- others but not right here and again.
I just can't believe that this -- -- doing the toll -- being achieved what intrinsic restaurant where it.
But -- protection -- given to make up.
Perhaps to walk bidder or look a little better on the balance sheet where he has promised that you -- predict that the -- period and believe that the -- world.
Especially trading -- On that -- JPMorgan this.
It's -- I mean come on I.
Are we now in a position where were where all of the banks and all of the risk -- the banks are concentrated in just five institutions.
And what you really see here is a situation where these institutions are too big to bail.
They cannot fails and that's why something like this is so scary job.
It's also the management as well I -- the sense that Jamie Dimon is a very common executive he's earned the attention he's gotten.
But managing everything going on in that institution.
Much less even the CI AO office.
Would be pretty much impossible for anyone to do well I think while Bruno may have made some very bad debts and certainly Jamie Dimon talked about how people might get a tongue lashing over this.
Bear what about his boss what about the development of an office that has -- billion dollar portfolio and it has.
Been taking progressively greater amounts of risk for years.
And shared quickly video -- -- too big to bail out -- these institutions just too large quickly.
I think they are in New York basically that the regulation that there's going to be any.
He'd become a bit as black market based all of these derivative products they can be understanding of how they work what battle to beat.
People don't understand that even -- -- betrayed -- nothing that burst and.
Wow no idea that it's unbelievable.
Even the people who trade them.
Don't know what they are are how -- work fantastic amazing feel so good about the banking industry and -- held up our financial institutions but not all of them.
-- -- -- -- -- We're gonna have to leave it there -- and Gerri thanks so much for being on with us tonight really appreciate your time will be right back with what.
