Here’s a classic example of how corporations manage expectations. A couple weeks ago, on the same day as the Supreme Court ruling on the Affordable Care Act, the New York Times reported that JPMorgan Chase’s losses from the Fail Whale trades could reach as high as $9 billion. Their sources were “people who have been briefed on the situation.” I wrote at the time that “I could see how the PR strategy would be to leak a high number and back into the lower (but still awful) one, and taking that as a ‘win’ in the markets.”
|By: David Dayen Wednesday July 11, 2012 10:37 am|
|By: David Dayen Wednesday June 13, 2012 6:45 am|
JP Morgan Chase CEO Jamie Dimon faces the Senate Banking Committee in a two-hour hearing scheduled for 10am ET today. He’ll be the only witness. Keep in mind that Dimon’s JPMorgan Chase has given millions to top-ranking members of the Banking Committee, so anything more than headline-grabbing and grandstanding without a real challenge to Dimon in the wake of the Fail Whale trades would be a bit of a surprise. I discuss his released testimony here and will be covering the hearing.
|By: David Dayen Monday May 28, 2012 2:55 pm|
I don’t have problems with hedge funds per se; I object to the use of the implicit too big to fail guarantee, the Fed’s discount window, political influence, inside information, rigged rules and virtually unlimited depositor funds that go along with any trader at a bank who tries to play this game. The idea that a victory will send profits to the bank balance sheet, but a loss will simply get socialized by the government, turns the idea of risk completely on its head.
|By: David Dayen Thursday May 24, 2012 6:00 am|
Over the last several months, analysts have become invested in the narrative of a recovery in housing, hyping positive data and downplaying either negative data or the explanations that temper the good news (the large amounts of uncounted shadow inventory, for example). This pervasive talk feels a lot like the bubble years, only we’re now talking about how the bottom for housing has been reached instead of marveling that prices will never go down again. And it’s led to a pernicious outcome – the selling off of housing stock to large investment groups who plan to rent it out.
There’s nothing inherently wrong with that, nor is it surprising. Rich investors were always going to buy up low-end housing stock if they felt it was undervalued.
|By: David Dayen Wednesday May 16, 2012 5:45 pm|
Bruno Iskil, the infamous “London Whale,” will leave JPMorgan Chase in the wake of his soured “Fail Whale” trades which lost the bank $2 billion to date. Experts are pointing out the dangers of allowing a casino-like hedge funds inside a federal insured bank.
|By: David Dayen Tuesday May 15, 2012 4:22 pm|
In addition to asking Jeff Merkley about filibuster reform, I sought his reaction to the Fail Whale trades that have racked up massive losses at JPMorgan Chase. Merkley, along with Carl Levin, authored the Volcker rule, the ban on most types of proprietary trading, that made its way into the Dodd-Frank financial reform bill. There has been a lot of slippage on the rules, however, once they left Congress and made their way through the regulatory gauntlet.
|By: Phoenix Woman Sunday April 15, 2012 12:55 pm|
Yes, former Chair Bair is speaking very satirically — her proposal is actually a Swiftian attack on the ways that the Wall Streeters were and are allowed to profit from our misery — but really, is it any worse than what has actually been done in the name of shoring up capitalism?
|By: David Dayen Wednesday March 21, 2012 9:00 am|
The Senate leadership has given up on trying to pass their version of the STOCK Act, instead planning a vote on the House bill. The two big Senate amendments that lose out here are the Leahy-Cornyn amendment responding to a Supreme Court ruling that weakened prosecutorial use of the “honest services fraud” statute against public officials and businessmen, and one from Chuck Grassley, on “political intelligence.”
|By: David Dayen Saturday January 21, 2012 7:40 am|
In Greece, creditors and the government continued their work on a debt deal that would give a haircut to debt holders and set a new interest rate going forward, reducing Greece’s debt level. After hedge funds appeared to be playing a game of chicken by holding out on a deal, cooler heads may have prevailed.
|By: David Dayen Thursday January 19, 2012 1:30 pm|
The hedge funds swooped in late, but the banks or other investors that made these loan deals did so knowing full well that they risked a default. That’s true of any loan. There are two sides to every deal. The hedge funds, in fact, took their deal knowing that Greece was on the precipice of default. They’ve just decided to be raging assholes, and threaten to blow up the world if they don’t get paid back. So the idea that hedge funds have an inalienable human right to make this profit is one of the most egregious things I’ve seen in a long time.