Hot damm. The taxpayers should get ready for another ride!
NEW YORK, N.Y. - Shares of JPMorgan Chase & Co. tumbled in premarket trading Thursday as a published report said the bank's losses on a bad trade may be as much as $9 billion — far higher than the estimated $2 billion loss disclosed last month.
In May, JPMorgan said the loss came from trading in credit derivatives that was designed to hedge against financial risk, not to make a profit.
The New York Times, citing sources it did not identify by name, said the losses have grown recently as JPMorgan has been unwinding its positions. The newspaper said its sources were current and former traders and executives at JPMorgan, which is the largest bank in the U.S. by assets.
The story cites an internal report that JPMorgan made in April that showed the losses could reach $8 billion to $9 billion, in a worst-case scenario. But the newspaper went on to say that because JPMorgan has already been unwinding its positions, some expect the losses will not be more than $6 billion to $7 billion.
A JPMorgan representative declined to comment.
At the time of the loss, JPMorgan CEO Jamie Dimon apologized to shareholders. Days after the loss was disclosed, Chief Investment Officer Ina Drew left the company. Drew oversaw the trading group responsible for the trade.
JPMorgan has lost about $23 billion in market value since the losses came to light May 10.
The loss has heightened concerns that the biggest banks still pose risks to the U.S. financial system, less than four years after the financial crisis in the fall of 2008.