JP Morgan wholeheartedly created the CDS market and its whale like monster is coming back to haunt it.
Ms Drew, who I once shared a taxi with before she became a member of the limo only class, is a very smart women who seems to still believe it is 2007. Not only does she earn more than Bob Diamond (that must hurt) but she still doesn't know the difference between hedging and speculating. So whilst Dimon boasts about the conservatism of JP Morgan, it is acting just like every other bank in trying to find alpha in everything and nothing.
Having just had lunch with a couple of ex JPM traders wanting to set up a hedge fund (Mayfair, 2 and 20 and bling), I had to explain that not only were hedge funds now two a penny (all those closed funds who were as arrogant as Sarkozy are all open these days), investors haven't a clue what to invest in and so aren't bothering. I told them to move to Singapore and learn Chinese.
So it is not a surprise that another Frenchman is behind another large position and failed trade trying to be the next subprime short selling king. Hedge funds who are looking for volatility have been hammering Voldemort / Whale / Loser and it is good news to see value being taken away from tax fed investment banks.
We hope the loss is much bigger than $2bn.
And another thing, funny how BMI's twitter account has been closed down. I wonder why?
Black jeans and no tie ....
JP Morgan (bloomberg)
Connection refused (linkedin)
Goldman Sachs revelling over its finding the fool in the market.