JPM’s CIO Loss Widens To $5 Billion

Last weekend we suggested SD readers that our sources had informed us that JPMorgan’s derivatives losses sustained by their CIO desk had been actually $100 Billion, not the $2 Billion admitted by Jamie Dimon to traders.

Well, one week later, the MSM (WSJ) is now reporting that JPM’s CIO has now lost $5 billion.

Perhaps a lot more fascinating, the WSJ states that Jamie Dimon personally authorized the delta-hedging of its interest price swaps positions which has resulted in the FUBAR derivatives losses for JPM.

So lets get this straight.  The Large Cahuna who approved the strategy gets a $23 million bonus, and reappointed as CEO by shareholders, whilst Iksil and boss Achilles who implemented the trade for Dimon get shown the door and have The Morgue try to claw-back their bonuses?

The US mega-bank JPMorgan Chase & Co loss from derivatives trading may widen to 5 billion dollars, the Wall Street Journal reported on Friday. CEO Jamie Dimon personally authorized the approach that led to the trades, with no monitoring how they have been executed, the newspaper said.

JPMorgan last week announced a 2 billion dollars trading loss on synthetic credit products, or derivatives tied to credit functionality. Dimon said the transactions, intended to deal with chance, were “egregious” failures by the bank’s chief investment office. JPMorgan has said the quantity could enhance by 1 billion or much more as it winds down the positions.

Joseph Evangelisti, a spokesman for New York-based mostly JPMorgan, declined to comment on the 5 billion dollar estimate.

The largest US loan provider by assets didn’t have a treasurer for the duration of the five months when the trades took place, the Journal reported in a separate article.

JPMorgan’s chief investment office oversees about 360 billion dollars, or the difference between deposits and what the bank lends. Matt Zames, who was appointed to lead the division after the loss was reported, shook up leadership and announced a “renewed focus” on hedging risks.

Sources and more information:

• Jamie Dimon Reacts to JPMorgan’s (JPM) $2 billion Loss

Two days after one of Wall Street’s most respected banks, JPMorgan Chase Co (JPM), revealed a market-shaking 2 billion trading loss, CEO Jamie Dimon said his bank was “sloppy” and had committed errors in judgment. He called the position, which was placed out of JPM’s London office and involved an index of corporate credit default swaps,…

• JPM “$2 Billion” Loss Keeps Growing: Report

• JPMorgan: Give Jamie Dimon a Break

• JPM’s CIO Loss Widens to $5 Billion