JPMorgan Trading Loss May Reach $9 Billion
Losses on JPMorgan Chase's bungled trade could total as much as $9 billion, far exceeding earlier public estimates, the New York Times' DealBook blog reported today. When Jamie Dimon, the bank's chief executive, announced in May that the bank had lost $2 billion in a bet on credit derivatives, he estimated that losses could double within the next few quarters. The losses, however, have been mounting in recent weeks as the bank has been unwinding its positions. The bank's exit from its money-losing trade is happening faster than many expected. JPMorgan previously said it hoped to clear its position by early next year; now it is already out of more than half of the trade and may be completely free this year. As JPMorgan has moved rapidly to unwind the position -- its most volatile assets in particular -- internal models at the bank have recently projected losses of as much as $9 billion. In April, the bank generated an internal report that showed that the losses, assuming worst-case conditions, could reach $8 billion to $9 billion.