Sen. Carl Levin from Michigan, the chair of a subcommittee that investigated the crisis, put it more bluntly. "This is not a hedge," he said. He called the loss a "stark warning" about the danger of "risky bets" at banks.
Q: How much will the trading loss hurt JPMorgan?
A: Likely not much at all, putting aside the impact of tougher regulation. JPMorgan is a big money maker. The $2 billion loss, which is before accounting for taxes, compares with $19 billion in net income last year and $16 billion the year before that.
What's more, Dimon said that $2 billion loss will be offset by $1 billion trading bets that have already paid off. Dimon said there are $7 billion more paper gains from trades that he can tap in case losses grow.
Q: Are more losses possible?
A: Dimon said he is trying to unwind the bad bets in a "responsible" manner to minimize losses, but prices can move against him. That would mean more losses. Dimon has said the $2 billion could become $3 billion depending on how markets react.
___
AP Business Writers Pallavi Gogoi in New York, Daniel Wagner in Washington and Christina Rexrode in Las Vegas contributed to this report.
Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Reader Comments