It's a nebula—or maybe mushroom cloud is a more apt description; morphing, changing, growing before our eyes.
The loss suffered by JPMorgan Chase & Co. (and its investors) is either attributed to the "London Whale" or "complacency," as CEO Jamie Dimon told Congress last week; one that began at $2 billion and was then estimated to grow to between $4 billion and $6 billion. The estimate of the estimate has now doubled, with Reuters reporting it could go as high as $9 billion, citing a person "familiar with the matter."
How did it happen, and why does the bill keep growing?
Derivatives, of course. In particular, the credit kind.
Initially, Dimon said he believed the trading losses could double in the next few quarters; instead, they tripled in the next few weeks. Part of this is good news (relatively speaking), according to The New York Times, and the larger amount reflects the bank's aggressive steps to unwind the losing bet as quickly as possible.
"The sharply higher loss totals will feed a debate over how strictly large financial institutions should be regulated and whether some of the behemoth banks are capitalizing on their status as too big to fail to make risky trades," the Times states.
