Mr. Sensitive

July 13, 2012

Bravo, Jamie

Filed under: Uncategorized — lbej @ 11:13

JPM earnings today; the stock is up more than 4 percent this morning.  The final loss related to the blown hedges (the ‘London Whale’ trades) is now $5.8 billion–and that is being met with relief, even excitement.  I just watched a hedge fund manager on Bloomberg TV talk about how this loss is much better (!) than estimates, and somehow no one threw rocks and tomatoes at the guy on air.  How did Jamie Dimon accomplish this sleight of hand?  First of all, Mayor Bloomberg ought to throw that shameless hedgie off a cliff for having the nerve to slurp the House of Morgan like he doesn’t do all kinds of business with one or two or thirty of its many arms.  Alas, he’s not alone; the market’s buying JPM, too.  Why?  It’s so simple I’m embarrassed for everyone.  When the initial loss was reported several months ago, we were told $2 billion.  Now, I think we can all agree that a $5.8 billion loss is not better than a $2 billion loss.  When Jamie went on his shareholder/Congressional apology tour, the loss was up to $4 billion.  Again, $5.8 billion is not better than $4 billion.  Then a few weeks ago, analysts began to float final numbers in the range of $8-9 billion–I clearly remember the breathless reporting around those leaks and lots of open speculation that $9 billion might not even be the limit.  Interestingly two to three weeks ago is right around the time that Morgan would have pegged the final loss and known it was nowhere near the $9 billion being rumored (it was closer to $9 billion than $2 billion, though, lest we forget).  So Jamie lets this $9 billion number percolate in the market for a few weeks, hits us with a ‘much better’ $5.8 billion, and soaks up the cheers.  Nice work if you can get it.

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1 Comment »

  1. I was glad to hear NPR saw right through that dude and reported it as bogus.

    Comment by nicole — July 13, 2012 @ 16:32 | Reply


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