May 13, 2012 - A startling trading loss of $2 BILLION dollars (and could get worse) by J. P. Morgan/Chase was exposed to the world today. Mr, Bruno Iksil, a JPMorgan trader in London, has been called the "London Whale" for piling up huge risks in credit default swaps, a form of derivatives, which threatened to upend the entire derivative market. CEO Jamie Dimon knew of the terrible overall risk on April 13, 2012, and dismissed it by labeling it "a tempest in a teapot".
NYT's writer Jason Zweig suggests the principle of famous physicist Richard Feynman be applied. The principle is clear: "You must not fool yourself - and you are the easiest person to fool". A handy investment reminder is the biggest dangers in finance is self-deception. Columnist Joe Nocera has stated our financial system has lost both its moorings and its ethical compass. During the last half of April and early May, JPMorgan was LOSING $200 million per day. Mr. Dimon has now admitted the bank's strategy was flawed, complex, poorly reviewed, poorly executed, and poorly monitored. Ouch!!! it's enough to sink the London Whale.
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