Giggle.......they cant even look after their own money

[Guest pelmetman]

JP Morgan Chase, the largest bank in the US, has admitted losing $2bn in a trading portfolio designed to protect the company against risks it took with its own money.

 

Chief executive Jamie Dimon blamed "errors, sloppiness and bad judgement" for the embarrassing loss.

"The portfolio has proved to be riskier, more volatile and less effective as an economic hedge than we thought," he said.

 

JP Morgan came through the 2008 financial crisis better than many other US banks, never posting a loss and remaining strong enough to take over investment bank Bear Stearns (NYSEArca: BSC - news) and consumer bank Washington Mutual (Xetra: 893906 - news) when they collapsed.

However, the bank acknowledged the latest developments could hit its reputation.

 

"This puts egg on our face," Mr Dimon admitted.

 

The company's stock fell almost 7% in after-hours trading after the loss was announced.

Other bank stocks, including Citigroup (NYSE: C - news) and Bank of America (NYSE: IKJ - news) , also suffered heavy losses.

Partly because of the $2bn trading loss, JPMorgan said it expects a loss of $800 million this quarter for a segment of its business known as corporate and private equity.

It had planned on a profit for the segment of $200 million.

"We will admit it, we will learn from it, we will fix it, and we will move on," Mr Dimon said in a hastily scheduled conference call with stock analysts.

 

JPMorgan has been a strong critic of several provisions that would have made this loss less likely, said Michael Greenberger, former enforcement director of the Commodity Futures Trading Commission, which regulates many types of derivatives.

 

"These instruments are not regularly and efficiently priced, and a company can wake up one day, as AIG did in 2008, and find out they're in a terrific hole. It can just blow up overnight," he said.