How JPMorgan’s $5 Million Loss Rose 80-Fold In Minutes After “A Confrontation Between Traders” [Zerohedge]

Actually that title was misleading: there will be no disclosure of “how“, because we don’t know. What we do know is that thanks to the magic of JPM’s definition of “Mark-To-Market” accounting, a $5 million prop trading loss (and thus forbidden by the Volcker Rule) funded by depositor cash as it took place in the infamous CIO unit whose job was to manage “excess deposits” in a prudent manner,became a $400 million prop trading loss in the span of 88 minutes. But not during trading – the market was long closed. The adjustment was purely on paper.

From the JPM Task force report on the CIO “London Whale” fiasco, as referenced yesterday:

April 10 was the first trading day in London after the “London Whale” articles were published. When the U.S. markets opened (i.e., towards the middle of the London trading day), one of the traders informed another that he was estimating a loss of approximately $700 million for the day. The latter reported this information to a more senior team member, who became angry and accused the third trader of undermining his credibility at JPMorgan. At 7:02 p.m. GMT on April 10, the trader with responsibility for the P&L Predict circulated a P&L Predict indicating a $5 million loss for the day; according to one of the traders, the trader who circulated this P&L Predict did so at the direction of another trader. After a confrontation between the other two traders, the same trader sent an updated P&L Predict at 8:30 p.m. GMT the same day, this time showing an estimated loss of approximately $400 million.He explained to one of the other traders that the market had improved and that the $400 million figure was an accurate reflection of mark-to-market losses for the day.

 

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FERC Suspends JPMorgan Unit’s Power-Trading Authority [Bloomberg]

The U.S. Federal Energy Regulatory Commission yesterday suspended a JPMorgan Chase & Co. (JPM) unit’s electricity-trading authority, saying it had filed false information to regulators.

The action, part of a more aggressive effort by the commission to monitor U.S. power markets, prohibits J.P. Morgan Ventures Energy Corp. from selling electricity at market-based rates for six months starting April 1, 2013.

The FERC said the company made “factual misrepresentations” and omitted material information in communications with the California Independent System Operator, or Caiso, and in filings to the commission. Caiso operates the state’s power grid.

“This is very significant in the history of that agency,” Charles Peabody, a bank analyst with Portales Partners in New York, said in an interview. “FERC has really been stepping up its investigations into power manipulation.”

In its order released late yesterday, FERC said the JPMorgan unit will essentially be allowed to participate as a bystander in wholesale power markets, granting it the ability to offer electricity into the market without a price attached. This will ensure that utilities have the ability to obtain enough power to serve the demand from customers. JPMorgan would still be able to trade derivatives under the order.

FERC Suspends JPMorgan Energy Unit’s Market-Based Rate Authority

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JPMorgan faces money laundering probe [Reuters]

JPMorgan Chase & Co's international headquarters are seen on Park Avenue in New York July 13, 2012. REUTERS/Andrew Burton

(Reuters) – JPMorgan Chase & Co’s compliance with U.S. anti-money laundering laws is being reviewed by a banking regulator, a source said, making the largest U.S. bank the latest target of a wide investigation of how banks prevent transactions involving drug money and sanctioned countries.

The Office of the Comptroller of the Currency, an independent branch within the Treasury Department, is examining JPMorgan’s systems that are designed to monitor and filter such transactions, said the source, who is familiar with the situation.

The exact scope of the inquiry and the size of potential liabilities for the bank could not be learned.

JPMorgan spokesman Joseph Evangelisti declined to comment on Saturday.

In its quarterly filing with the U.S. Securities and Exchange Commission last month, JPMorgan said it expected heightened scrutiny by regulators of its compliance with new and existing regulations, including anti-money laundering laws.

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JPMorgan Said to Face Escalating Senate Probe of CIO Loss [Bloomberg]

JPMorgan Chase & Co.’s (JPM) wrong-way bets on derivatives are the focus of an escalating investigation by a U.S. Senate panel led by Carl Levin that has grilled executives from banks including Goldman Sachs Group Inc. and HSBC Holdings Plc, three people briefed on the inquiry said.

 

Levin’s Permanent Subcommittee on Investigations is seeking testimony from those who worked in or helped lead JPMorgan’s chief investment office, according to the people, who asked not to be identified because the inquiry isn’t public. The unit’s London staff lost at least $5.8 billion this year on the botched wagers, which were large enough to shift markets.

Tara Andringa, a spokeswoman for Levin, didn’t respond to a message seeking comment, and Joe Evangelisti at JPMorgan declined to discuss the panel’s inquiry. “As always, the company has fully cooperated with all regulatory and governmental requests around this matter,” Evangelisti said.

The bank, led by Chief Executive Officer Jamie Dimon, 56, faces a panel of lawmakers that in recent years brought executives from Goldman Sachs and London-based HSBC toCapitol Hill, barraging them with questions that challenged their version of events. JPMorgan said in July that its internal review found traders may have tried to obscure the full amount of losses they faced on their transactions.

 

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JP Morgan: At Least $28 Billion in Losses Since “London Whale” [SilverVigilante]

The nation’s biggest bank by assets, JP morgan, has lost more than $22 billion inshareholder value and $28 billion in market value since the London Whale was made public in April 2012 according to Bloomberg.  Much reported and demonstrative of just how well the TBTF CEO’s  up-on-high have it, Dimon originally called the reports of a London Whale a “tempest in a teapot,” but had to go back on that phrase as the firm reported a 2$ billion loss a month later.  For some, not enough quarters for laundry is a tempest in a teapot, let alone a loss of money unimaginably in excess of their lifetime earnings down in the basement. Since the loss, JP Morgan has grown accustomed to regulatory and legal proceedings on numerous fronts. Perhaps this is Washington’s way of breaking the stubborn Jamie Dimon into the incoming new maze of Soviet styled regulation the once touted risk manager fears so totally?

It’s. A Free. Fucking. Country. Is it Really Jamie Dimon?

“As always, the company has fully cooperated with all regulatory and governmental requests around this matter,” Joe Evangelisti of JP Morgan said of recent Senate investigations regarding the London losses.  You see, an MO seems to be developing over at JP Morgan. Operate with flagrant disregard of law and ethics, and then cooperate completely with the authorities thereafter. “Our smug smiles and celebredom will do the rest in the face of public servants,” says TBTF while uttering in a whisper of stale, reptile breath: “Do more than scrape us,  and we will pull the plug.” On the economy, of course, TBTF means.

According to former JP Morgan CEO William B. Harrison, investors overreacted to the bank’s $5.8 billion trading loss. He also said current CEO Jamie Dimon is doing a “great” job.  His smiles and winks and nods are really winning over the Senate aides.

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JP Morgan’s HP Printer (it’s all they have) [MaxKeiser]

‘JPM’s $150 Billion FDIC Reality Adjustment’ – Jamie Dimon Just Admitted To The World That JPM’s Assets Are Overvalued By $150 Billion []

JPM’s $150 Billion FDIC Reality Adjustment

Reuters published an exclusive story this morning:

Buried in the final paragraph:

In a presentation in March, JPMorgan Chase said it had a recovery plan in place and said it was ordered by regulators. The presentation was organized by Harvard Law School and was closed to the media at the time, but is now available online.

Here’s the BEST part of the JPM document.

It’s easy to see on the PDF:

http://www.law.harvard.edu/programs/about/pifs/symposia/europe/baer.pdf

Go to page 9.  Under the wipeout scenario JPM describes a $50 billion trading loss turning into a $200 billion loss as soon as the FDIC takes over.  Why… ? Because JPM says they would expect the FDIC to immediately writedown JPM’s assets by an additional $150 billion.

Holy mark to bullshit.  Jamie Dimon just admitted to the world that JPM is mis-marking assets to the tune of $150 billion.

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