the basic bets are "win" when you bet on a horse to win. place is to bet on a horse to finish either first or second and show is a bet on a horse to finish first, second, or third. if you can't make it to pimlico to place the bet, there are other options. we'll have more on that coming up for you. >> and don't fore-- forget, wbal-tv 11 news is your home for the running of the preakness. we will carry the second leg of the triple crown live from pimlico. the 11 news team is coverage every part of the race. >> we will be there this morning, this afternoon, and also after the race. >> and we'll have the hats. >> yes. >> the ladies were hoping this unone -- they wanted this one to go to preakness. >> it is a preakness hat. >> it stands out. >> we will reveal the winner at 10:00. >> all right. >> 6:09. 51 degrees on tv hill. we have much more live coverage of the running of the preakness stakes still ahead. >> it has become an annual tradition, the search for the perfect preakness hat. the choices and which one you voted for so far as your favor

bet on the corporate market in a synthetic derivative fashion that it would improve that is a bet that bet has so far because the corporate market hasn't improved last j.p. morgan chase two billion dollars that we know of and counting wait a minute wait a minute my memory seems to. tell me that just a couple weeks ago blith mausers who runs that this was saying everything's changed but that's clearly false isn't it yeah hedge would be i loan you as a bank and your corporation money i hedge against the possibility that you will not pay me back in that respect i will be doing the exact opposite of what j.p. morgan chase did out of their london office which is basically double down the martin gail betting system you know when you go to the roulette wheel you have a losing bet on red you double it on red again and you spin and you keep doing until you actually win this works of course if you have an infinite line of credit and that's the only time it can really work and that's what we're talking about here is that these banks have an infinite line of credit they can never actually lose bec

about a bet that went bad.like all stories about wall street, it starts with the pursuit of profits and the risks of getting it wrong. >> pay for at least 50, 12.68 for at least 50. >> narrator: it's one of the latest in a stream of missteps, meltdowns and scandals that blow up, it seems, every few months. >> two mortgage companies under government control... >> the federal reserve is bailing out bear stearns... >> narrator: it's a familiar cycle. customers are outraged. lawmakers promise change. then it happens again. >> mf global, down almost 39%. >> an increasing number of investors are betting the stock has farther to fall. >> of all of the collapses that occurred during this financial crisis, the collapse of mf global, in my mind, is the most egregious. this did not have to happen. >> it is a wall street morality tale in some ways. how can something like this be allowed to happen? how can one individual completely shape the destiny of this firm and ultimately its demise? >> narrator: this is the story of j

this was about betting with the company money. this was a bit of the casino element that we've been trying to pull back on since the crisis. >> and the risk in all of that, jamie dimon says, look, we're still making a lot of money this quarter. we manage a huge portfolio that has made a lot of money. jpmorgan chase is not in danger of collapse. it's just that we made a big mistake here. >> it's a big mistake. and by the way, i give him enormous credit for coming out and saying mea culpa. i know a number of ceos in the world who you would have never heard about this from until the end of the quarter when they came out and said, we have a problem. that's good. but would other ceos know that? this was a $2 billion loss, which seems like a lot. it was actually -- but this actually underscores the point, it was a $100 billion bet. the firm had made a $100 billion bet that went down 2%. most people -- the stock market can go up and down 2% in a week, unfortunately, these days, but it becomes magnified because the bank is making such a b

. $2 billion gone, lost in a very bad bet. how it could happen and why americans should be alarmed tonight, an nbc news exclusive interview with the ceo. >>> walking tall, for all of the people who had to fight back from a debilitating illness, a politician who decided to come back in the open and ask for support. >>> second act. faced with the reality of a delayed retirement, tonight, we check in with the women who are reinventing their lives and their work. >>> and taking aim. a lot of americans girls suddenly have their sights set on a sport that's been around a long time, and the big screen has a lot to do with it. "nightly news" begins now. >>> good evening. the largest bank in the country has lost $2 billion. the money is gone. it's the result of a bad bet, and while it's bank money, there's reason for americans to be concerned nonetheless. coming right off the era of bank failures and bank bailouts using taxpayer money. the bank in question is jpmorgan chase. the feds are taking a close look, as you might imagine. the c

multimillion bet in the face of an spy put. a giant position against the s&p 500. that's what i meant to say. they are betting big against the market. you also added inger sol rand. he raised his stake and cut his stakes in heinz and tiffany. they had a put at the end of the cutter. in terms of the notional value or what he spent on the puts? >> i don't know what he paid for the put, but he had a 725,000 put position which is worth 5.1 million. 725 and 876,000 put options on the spy. >> okay. brian? >> the thing that is strange about that is also they all caught. with a bullish call on oil and a negative call on the s&p, they go so high it will choke off growth, but that's not what's been playing out and it must be some type of a hedge. >> i agree. we only have part of the picture here. >> that's the other thing to keep in mind. murphy was making the point. we don't know the other side. >> although i agree with his directional play, i think it's more of a hedge of his portfolio. >> got to take a break. do you tear to be dangero

it was a $100 billion bet. the firm had made a $100 billion bet that went down 2%. the stock market can go up and down 2% in a week unfortunately these days, but it becomes magnified because the bank is making such a big bet. and the question is should the firms be able to make such a big bet? in this case, they thought they were hedging their risk. they thought they were reducing their risk, and they made a mistake, and they were wrong. if they were wrong, others can be wrong too. >> final point, senator levin. what assurance can you give the american people that, if regulators get everything they want, if there is the volcker rule that changes the way these kinds of bets that can be made, that this could have been prevented? >> it would be prevented because these are the kinds of bets that put us into the soup to begin with. if we can prevent these kinds of bets being made, we can avoid ever again bailing out banks. we bailed out this bank. tens of billions of dollars went to this bank before, and we don't want it to happen again. that's why we want regulators to

betting -- making a bullish bet on where they think macy's a going to go. and that's how you're reading the options activity? >> oh, yeah. over 4,000 of knows june 40 calls. those are bullish bets for sure. people are concerned with some of the negative news. >> take a look at the s&p 500. well off session ehighs. following the story of what the euro was coyou're was doing tod. looking for a better place to put your cash? here's one you may not have thought of -- fidelity. now you don't have to go to a bank to get the things you want from a bank, like no-fee atms, all over the world. free checkwriting and mobile deposits. now depositing a check is as easy as taking a picture. free online bill payments. a highly acclaimed credit card with 2% cash back into your fidelity account. open a fidelity cash management account today and discover another reason serious investors are choosing fidelity. >>> shares of facebook plunging below 30 bucks for f s fos for time here. $29.46. a decline of nearly 8%. and now we're lucky to have a guy like john sitting next to us

but what you cannot do is bet on a general direction of the economy, because that's the kind of bet that can lead to a bank getting in big trouble. and if it's a big, big bank, if it is too big to fail and if it did fail drag the entire economy down with it, then we end up bailing out the banks. >> i talked earlier to an official in president obama's treasury department who said we don't know enough about the trade how it would fit in with the volcker rule as it has been inacted in the dodd frank, do you see anything that would have stopped this trade? >> the doubt i have is to whether the regulators, when they write their final rule, is going to do what is clearly written in the law. and that is that you can allow hedges. we do particularly, specifically permit hedges, but we do not permit something to be called a hedge unless it is connected to, relates to a specific asset in the inventory. and by jamie dimon's own words, this was a bet on the economy, the direction of the economy. and that was a $2 billion bet, which he lost. so if the regulators do what the law clearly says they must

they're betting on.you're gonna bet on the outcome of the super bowl, you're gonna bet on the outcome of a horse race, or you're at the craps table or you're betting on which way the dice are gonna go. >> i'm pretty confident that the housing market's not going to down at all. it's just going to go up. >> within a decade, you have the most phenomenal machine anybody's ever seen. >> new homes areelling at the second highest rate on recor >> we are in a housing boom. it's quite strong right now and housing prices are going up at a rapid rate. >> ...profit soared at 93%... >> ...expected to dole out $36 billion in bonuses this year. >> everyone was high-fiving. it seemed to be brilliant. the combination of free markets, innovation and globalization appeared to have delivered this incredibly heady cocktail of tremendous growth. >> top executives will earn as much as $20 to $50 million.,, >> narrator: between 2003 and 2006, dick kovacevich, ceo of wells fargo, remembers attending meetings with bankers and reg

i bet she will walk off with it. >> i bet she will. >> find out which horse to bet on when we come back. >> i'm rob roblin. the preakness is not the only big horse race today. a live report coming up. >> there are plenty of other races today at pimlico. one is the first of its kind arabe -- arabian race horse race. >> this race today with the arabian horses is a real big race for lots of folks. >> 7-year-old valentine is an arabian horse with quite a record on and off the track. after being away from the track, dixie's valentine is back to racing. >> she's seven years old now, had three foals, right, and then came back and raced? >> correct, and raced well. not only just came back and raced, she's very competitive, no matter where she runs. >> ron mar tino -- martino is dixie valentine's trainer. >> she gives 100% every time she's out there. >> she is owned by the same generous family that donated to help build johns hopkins new hospital. the multieye pass -- the multifaceted horse operation was involved. >> during the recent years he has accumated some of the best mares, horses, stalli

right now a bet on ingersoll rand is a bet on nelson peltz. as long as he's working to bring out value, ingersoll rand makes a lot of sense when the cloud lifts on the industrial sector. after the break i'll try to make you more money. stay with cramer. >> coming up, fair weather friend? the clock keeps ticking down to the public premier of facebook and cramer is helping you manage the news feed and now with the social stock's valuation rising higher is this ipo poking cramer the wrong way? [ male announcer ] when this hotel added aflac to provide a better benefits package... oahhh! [ male announcer ] it made a big splash with the employees. [ duck yelling ] [ male announcer ] find out more at... [ duck ] aflac! [ male announcer ] ...forbusiness.com. ♪ ha ha! people have doubts about taking aspirin for pain. but they haven't experienced extra strength bayer advanced aspirin. in fact, in a recent survey, 92% of people who tried it said they would buy it again. visit fastreliefchallenge.com today for a special trial offer. one golden crown. come

we created this much, much bigger world by having bets on bets on bets of things synthetic, derived.> that's true. >> ultimately, aig, sure, if mortgages hadn't gone sour wouldn't have gone down but regulators didn't know what they were betting on. >> this is my point, though. oftentimes we have this mentality, i think you have this mentality, ali, sometimes, that these regulators have super wisdom. >> it's a dream, not a mentality, a dream. i fantasize they will do this. >> look, they don't. do you think the federal regulators would have seen some of the folly in what jpmorgan was investing in? i think not. the other point i would make to what elizabeth warren was saying on the show, look, it was two years ago dodd/frank was signed into law. two years ago. this was supposed to be the most sweeping financial regulation of the banks and other financial institutions that we passed in 50 years and it didn't go anything to prevent the crisis that's going on. >> because republicans worked very hard to water this down. elizabeth warren running for senate. she would have been the head of th

i bet you tell stories. did you tell a story today? >> yeah, i bet you did you went up to our friend and said, did you see that? your friend said, no, no he didn't. right? that's a story. so, i will tell you a story. in india, here we have super heroes like, tell me a hero. >> super man. we have super heroes in india. krishna. lifts mountains and throws them to the ocean to create bridges. i will tell you the story about a super hero. krishna as a little boy in the village where the trees blow and the water flows and the birds fly and the grass grows, in this village there are cows. and people and they go to the river and they go to get their water. and they go to the river and what do they see? an evil demon is polluting the river. callia. and they can't get water because it's killing the cows and the people. so, they go to krishna and say, please, do something about this this is not good. he says, he thinks about it and says, okay. he takes his friends to the river to play. they play ball. they play with the ball and then by accident

right now a bet on ingersoll rand is a bet on nelson peltz.long as he's working to bring out value, ingersoll rand makes a lot of sense when the cloud lifts on the industrial sector. after the break i'll try to make you more money. stay with cramer. >> coming up, fair weather friend? the clock keeps ticking down to the public premier of facebook and cramer is helping you manage the news feed and now with the social stock's valuation rising higher is this ipo poking cramer the wrong way? training's a fulltime job... when you're training to be the best, you gotta eat the best. you gotta try the new smokehouse bbq chicken. [ male announcer ] new from subway. tender, slow-cooked chicken marinated in a sweet n' smoky barbecue sauce. merely 6 grams of fat. better for you, and irresistible, too. what a combination! [ male announcer ] hurry in for the new subway smokehouse bbq chicken. very tasty. it's a perfect ten. subway... the official training restaurant of mike lee... nastia liukin... michael phelps and athletes everywhere. it has a very nice sp

and she oversaw the division that should have stopped this bet from going bad. ceo jamie dimon trying to reassure investors, and everyday customers. >> we made a terrible, egregious mistake. there's almost no excuse for it. >> reporter: but american taxpayers who came to the rescue -- that bail-out of the banks -- now ask, wasn't there supposed to be greater oversight after the financial collapse? >> robert heard of this $2 billion loss. >> i think not again. >> you worry about the little guy, us little people. >> reporter: the reality, financial experts say, is that the big banks, in many ways, are still at it. impossible for anyone policing them to keep up. >> it's like riding a tiger the way our financial system works. the regulators, they were aware of some of these trades. but apparently, they didn't have a grasp of how quickly it could turn for jp morgan either. >> reporter: jp morgan argues tonight even with a loss of $2 billion, the bank is still rock solid. after all, they made $19 billion in profits last year alone. the bank as a whole, today worth $13

something traders are betting on and we will tell you why. "options action's" number one fan needs help writing a trade gone wrong. we're on the case. the action starts right now. >> live from the nasdaq market at the world's largest exchange, i'm melissa lee. these are the traders. we will have more on the investment, but we will start off with the markets. the dow had their west week in months. despite the down day today. is there a bull case to be made? let's go to the money and find out. it seems like consensus is this is a repeat of 2011. >> it's interesting because one of the things you want to do as an investor or trader is as everyone is looking in one direction, you should be being looking in another. so many things are bearish right now. that might give people pause and have them looking in another direction. only 15% of the stocks and the s&p are trading cheap relative to how much they are moving around. as far as options prices. world bonds indicating that armageddon is upon us. saying that if greece had a disorderly exit from the

they just made a big bet it got out of control they clearly were not in control of the situation allright so as an auditor yourself you would look at this and say this does not qualify as a hedging accounting it isn't back to speculative bet outside of the volcker rule they only call the heads to go around the volcker rule it's a two billion dollar loss now they're saying it's a three billion dollar loss and counting jamie diamond says it could get worse work at the go we're hearing reports that it could get to eighteen to twenty billion well i can imagine it can go much much bigger the thing is. is that you're talking about the corporate office this is not the area where we should have expected this kind of risky bets and certainly it should be probably the most controlled area it's right there under their nose for them to have gone this far it sounds like they took every kind of control there there is off in order to allow this guy to pay to as diamond said make some money right and once again in london france scene where the collapse lehman brothers collapse made off collapse this

we wouldn't be in any trouble right now. >> it's all the side bets. >> it's the side bets. >> you'vese big wall street firms, bear stearns, lehman brothers. you got insurance companies like aig. merrill lost a ton of money on this. everybody's lost a ton of money. they're supposed to be the smartest investors in the world, and they did it themselves. >> they did it all on their own. that's the most incredible thing about this crisis, is that they pushed the button themselves. they blew themselves up. >> now, how much of this was just incompetence on the part of wall street, the people who ran it? >> the truth is that on wall street, a lot of people just weren't very good at their jobs. it's as simple as that. >> these people were being paid $50 million to $100 million a year, some of them, the guys that were running the places. >> there is no defending-- a trainee making $45,000 a year would have had the common sense not to bet the firm on mortgage contraptions that no one in the firm actually understood. that is not a deep point to comprehend. somehow, through, i will call it a crim

and banking on disaster if you thought big banks were done making big gambles you bet wrong it seems the more things change the more they stay the same specially when it comes to risking your money. plus the race for the republican nomination is getting red white and bruised as supporters for mitt romney start a battle royale with ron paul a fiction otto's throwing around both votes and up punches we'll tell you how these voters are duking it out for delegates. it is monday may fourteenth four pm in washington d.c. my name is christine you're watching our teeth. well let's begin with a look at some important changes in the works all in the name of cyber security now we've been talking about some of these for months and about some partnerships that have been forming between the u.s. government and private companies to gain more access to one takes place on the web here's a headline in the washington post today the pentagon expands a cyber security exchange essentially as many as a thousand defense contractors may volunteer to share some previously classified information with the penta

you hedge, you are making a bet.who essentially do bet. my bottom line is they have dressed this up to look like something that it is not. jamie dimon is running a casino in this aspect of the bank. that's fine, because actually you can serve some useful purposes in the economy that we can't get into with the time that we have by doing that but those useful purposes should not be served by the people that take your deposits and those deposits are then guaranteed by the fdic, the federal government. when i go to the bank and put my money in, i don't want to see say slot machine in the lobby. >> peter morici, thank you very much, a professor of international business at the university of maryland and a former economic director at the u.s. international trade commission. zoraida? >> thank you very much. 42 minutes past the hour. let's get you up to date. here's christine romans. >> good morning again. i'm going to start to the 2012 fire season in arizona, at least four wildfires burning across the state fueled by high w

morgan chase could face up to another billion dollars in losses from its bad bets. but the biggest loss may be to its reputation and to trust in the banking system. >> pelley: anthony, these are huge numbers we're talking about but let me ask you directly. is j.p. morgan chase in jeopardy? >> reporter: no, scott, it's not. as big a loss as it was-- and that's a big number-- the bank is well capitalized, it can absorb it. the company was downgraded by one ratings agency today. fitch said it's worried about the company's risk management, scott. >> pelley: anthony, thanks very much. the j.p. morgan chase story had a lot of folks worried their their 401(k)s invested in the stock market would take a hit today and while bank stocks did post big losses, the dow jones industrial average shrugged it off. it fell just 34 points. now to chesapeake energy. it has been a darling of wall street, a swashbuckling leader in the huge growth of natural gas exploration. chesapeake is the second-largest gas producer in the u.s. but, as we said, its vok value lost a billion dollars in le

in my book, are kept by the bet. the losses if they are extreme, must be made up by the tax -- >> what do you see, does this suggest the need for dodd frank. >> able with, i think the real issue here is, with regard to the so-called vocal rule in dodd frank. dodd frank is a very complex piece of legislation. so we, it seems important to focus in on what is at issue here. and as the volcker rule which is intended to o provide a basis for more closely regulating the derivatives activity and other trading, financial trading activity of the banking companies. the problem is that the regulators are having an extremely difficult time figuring out exactly how to write the rules to implement the volcker rule. and i was content, i think motorcycle el might disagree with peon this, that i don't think an implemented volcker rule, and it will be implemented eventually, would have prevented this type of situation. because at least on the surface, the derivatives that the london whale entered into were meant not to be-- were reall

morgan chase had made enormous bet on what are known as derivatives, an exotic wall street investment that was at the heart of the financial collapse in 2008. by this morning, a top executive was out and anthony mason picks up the story from there. >> reporter: the first casualty of the bank's $2 billion blunder was its chief investment officer anna drew, a 30-year veteran of j.p. morgan chase and one of the highest ranking women on wall street resigned this morning. she oversaw the division responsible for the $2 billion loss. the bank stock tumbled another 3% today and c.e.o. jamie dimon has been rushing to do damage control. >> in hindsight we took far too much risk, the strategy we had was badly vetted, it was badly monitored, it should should never have happened. >> reporter: but the bad trades are still active and the bank is still racking up losses, which could reach another billion dollars or more says michael greenberger, an expert on the derivatives and former federal regulator. >> it's almost as if you bet the new york yankees are going to win the world series and now that