j.p. morgan trading blowup so the loss has seemingly reignited scrutiny from washington but here's a copy of before you get too hopeful about this senate banking committee guess who has reportedly been the single biggest donor to the chair of this committee yeah that's right j.p. morgan will talk about it and who's the regulator we really want to hear from how about the one that oversees america's largest banks the office of the comptroller of the currency the o.c.c. it reportedly pledged to take a more aggressive approach to regulation after they didn't see caught heat for being a lax in the run up to the two thousand and eight crash now obviously facing some questions about follow through william k. black will help us understand why it's been the watchdog that won't do this. for. barque and the u.s. is largest foreign creditors china can now bypass wall street altogether and buy u.s. government debt straight from the u.s. treasury making this the treasury's first ever direct relationship with a

j.p. morgan's balance sheet your thoughts well the j.p. organ situation is still developing i just wrote something this morning about the accounting my feeling is that it's a hedge that's not a hedge i think they're just calling it that but basically they're hedging a portfolio and it doesn't qualify for hedge accounting. they just made a big bet it got out of control they clearly were not in control of the situation all right 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 an

that's the stock symbol for j.p. morgan their share is as we know collapsed six percent on the aftermarket eight percent and ten percent down as the chart shows from carl denham sure this is the options trading on j.p. morgan on that thursday when jamie diamond came out after the markets close to warn people that they had this two billion dollars loss that could grow he says quote the highlighted field thirteen thousand eight hundred forty one dollars puts treated today in expire tomorrow for at the close about forty three cents they're worth a fair bit more than that right now like three dollars why would you buy a crap load of forty one dollars puts with the stock trading just under forty one dollars for expiration tomorrow that would be literally worthless in twenty four hours and less you knew something in advance so max you were an options trader what does this tell you insider trading clear and simple and of course the regulators know about it that it's profitable to trade of as that information the washington and the

j.p. morgan see i ope profit boat jamie dimon announces a two billion dollar trading loss saying more could be on the way saying big mistakes were made but hey this doesn't make the case for more regulation or for the volcker rule we'll talk about why this is exhibit a for why the volcker rule is needed that said we'll ask if the rule in its current form would have even stopped the london whale marketplace's heidi moore joins us plus we will look at how the federal reserve may be in the building and incentivizing this kind of risky behavior in too big to fail firms also president obama's mortgage financial fraud task force was touted in his state of the union address but some allege it's been starved of staffing and momentum since then some members of occupy wall street have offered to help but they haven't necessarily been well received we'll talk to two of them let's get to today's capital account. so just yesterday ben bernanke in a speech was talking about how conditions in the banking system

j.p. morgan is planning to pull back and the european mortgage bond market in the wake of course of this disaster this could cause significant volatility is the j.p. morgan is the biggest buyer of european home loan bonds is this just one of many examples of how j.p. morgan's reckless two billion dollars trading loss may be felt most by other people and other firms while j.p. morgan could perversely enough actually be the firm to benefit most you know how this story typically goes. to. show is when. the house always wins we will make the case for what we're arguing with trader and zero hedge contributing editor bobby english also the former goldman sachs director mr gooch goes on trial for insider trading today wall entire too big to fail firms arguably engage in this behavior as a matter of normal business by front running their own clients meanwhile it's revealed the same guy managing risk in j.p. morgan's c.i.a.o. was fired from a firm a few years ago for wanted to take a guess overseeing trad

j.p. morgan calling a conference call to address losses in the credit portfolio. take a look at this after hours after down 4% right now. keith, what do you make of the story so far is this. >> this is a problem, a big problem. whale had a big problem. net income likely to be quote unquote more volatile in future periods than in past periods because the whale had a product. the whale is common for trading unit of j.p. morgan. people have a lot of questions on this. is it prop, is it not prop, why are you doing this? >> specifically the conference call is going on right now. they're saying that the chief investment office has significant mark to market losses. legal losses of $4.2 billion. reasonably possible and j.p. morgan chase is more volatile as an economic hedge right now. >> this is the last thing that the financials need. if you look at the financials coming out of rning season, it's been atrocious. all these big kwoetd unquote favorites have not performed well. we've seen the charts break

stock up on fire and j.p. morgan stock up. i like that i go there well dan for if this guy had his house burgles by j.p. morgan chase also kept copies of important documents inside the house and they were also taken experts said in case of a fire or burglary by j.p. morgan chase it's a good idea to have copies of important documents in the digital form or a safety deposit box but this is something you and i have also talked about not only could j.p. morgan chase lloyd blankfein and jamie diamond type guys steal your stuff but you know you need gold silver artwork diamonds and in your co it's time to start thinking about that because this is the blitzkrieg coming these are the guys taking your stuff and there's nobody there to protect you right so they steal all your stuff and then they'll sell you insurance to pretty good protection against them spree stealing all your stuff is j.p. morgan bankruptcy a community like gomery alabama and then everyone's on the street and then they process all of the machinery behind food stamps

j.p. morgan shareholders meeting was today as all eyes remained fixed on that two billion dollars trading loss on a position that could grow much larger in the coming days weeks or even months as j.p. morgan attempts to exit its position does this massive blunder demonstrate the financial shenanigans that can go into evaluating and possibly hiding risks when bankers have a multimillion dollar paydays on the line that's a question we'll ask and all the reaction to the trading loss is reigniting regulation talk what the volcker rule what reinstating glass steagall even go far enough to curb systemic bank risk or is about something bigger karl denninger denninger joins us he'll explain his one dollar of capital solution and in the eurozone greece cannot form a government the country is headed back to elections the one where public though is capturing headlines meanwhile lightning is striking in the core literally olanda is sworn in as french president and jets off to meet with merkel and germany for

to want, the j.p. morgan story with steve rattner, former "new york times" reporter who worked on wall street for 30 years and worked with the obama administration in the auto bailout. and gillian tett, u.s. managing editor of the "financial times" and a columnist in for the "financial times." >> this is not a life-threatening event for j.p. morgan, it's not systemic, it doesn't involve counterparty risk or meltdowns or the other things that are scary. this is like making a bad loan which j.p. morgan and other banks have made many times. >> anybody inside j.p. morgan should have said "hang on a second, do we want to become the entire market? we've become so big we're swamping everything else." it distorts prices and creates risks. you have to ask why did no one spot that. >> rose: we continue with clay christensen. a harvard business school professor and author of a new book called "how will you measure your life." >> what you really need to understand is what causes these things to happen. what causes that c

j.p. morgan's big trading loss draws attention of the securities and exchange commission. >> susie: i'm susie gharib. banking analyst dick bove says the stock is still a buy, he'll tell us why. >> tom: and jobless benefits expire this weekend for tens of thousands of americans. we'll have an update. >> susie: that and more tonight on "n.b.r."! we begin tonight with j.p. morgan. investors dumped the bank's shares today, reacting to that surprising revelation of a big trading bet gone wrong. j.p. morgan stock plunged 10%. that sell off hung over wall street today. the dow lost 34 points, the nasdaq was almost unchanged and the s&p fell more than 4.5 points. erika miller has a closer look at the potential fallout for j.p. morgan. >> reporter: j.p. morgan's $2 billion trading loss may bring back memories of the 2008 financial crisis. but this time, most analysts think the damage will be contained. the situation today is quite different than 2008, when most big banks were massively overleveraged and h

delegate on this because j.p. morgan also looked to buy enough of us and they did massive amounts of due diligence and if they're already had all the collateral remember a broker dealer is financed they're not funded they don't have a deposit base of cash a broker dealer always has to go to a bank to finance or assets the bank has to know what's going on is part of the credit process you can say well i didn't know and just begs cruelty to say that nobody at j.p. morgan realised that this tiny tiny broker dealer was in trouble i really think they did know they were in trouble they got their money out and now they say fine we have no responsibility to wash our hands of it and the law allows that so then the question becomes will there be more m.f. global's will there be more made offs. and because bankruptcy laws are changing that i know of that's right this same pattern will repeat where victims don't have any more right here is an interesting case i think if victims were more aware of their rights under current law i've

j.p. morgan's $2 billion trading loss. investigators are expected to look at the bank's accounting practices and disclosures about the trades that led to the loss. that massive loss was also an important topic today at the bank's annual shareholder meeting in tampa. >> reporter: the meeting took place a thousand miles away from wall street, but the $2 billion trading loss at j.p. morgan was still top of mind at the bank's annual shareholder meeting. c.e.o. jamie dimon, and other executives, arrived even before the sun came up this morning. dimon kicked off the meeting and told the several hundred shareholders, who had assembled, that the bank will "do the right thing" as it deals with the wrong-way trading bet. the other big item on the agenda: splitting the chairman and ceo jobs. in the end, the votes stacked up in dimon's favor of keeping the two roles combined. shareholders also approved dimon's $23 million pay-package. still there's a lot of pressure to enforce, so-called "claw back policies", recouping salaries and bo

this is like making a bad loan which j.p. morgan and other banks have made many times. >> anybody inside j.p. morgan should have said "hang on a second, do we want to become the entire market? we've become so big we're swpingverything else." it distorts prices and creates risks. you have to ask why did no one spot that. >> rose: we continue with clay christensen. a harvard business school professor and author of a new book called "how will you measure your life." >> what you really need to understand is what causes these things to happen. what causes that company to be successful and if you are in a different situation will the same or different result happen? and so trying to understand what causes happiness just as what causes success in the business world that's what we're about. >> rose: we conclude this evening with charles simonyi. he is a software programmer who helped develop word, became a philanthropist and a space traveler. >> i don't think any of us would have thought that in the first decade of the 21st century private

part of the reason j.p. morgan fell into this trap so you sell something and you're going to make money if it goes down in price well how do you make a good price sell some more in those they can't they became the market j.p. morgan was the market and the more they sold the more money they made because they were forcing the market down selling their own position but at some point you're in for one hundred billion dollars and then the market turns on you just like you're trapped a rat and now you're stuck and now you can't get out because there's no appetite for two hundred billion that's the other problem if you do this in bonds there aren't two hundred billion of these bonds but if you do it in derivatives there's no limit on the size of the trade because you just fill in the blank on the swap agreement so it's one more reason why derivatives are poison because you can create unlimited open interest which means on one with the losses do you think that any edge of evidence regulation could change that was done ther

j.p. morgan chase retired today, the first casualty after the bank announced a $2 billion loss last week. good evening. i'm jeffrey brown. >> woodruff: and i'm judy woodruff. on the newshour tonight, margaret warner gets the latest on the trade deal gone wrong, and what comes next for the banking giant. >> brown: plus, we talk with two senators about the prospects for increased regulation: michigan democrat carl levin and tennessee republican bob corker. >> woodruff: ray suarez updates the escalating drug violence in mexico after 49 mutilated bodies were found dumped along a highway. >> brown: john merrow reports on a move to boost reading skills and shake up the content for young readers. >> reporter: the new view is that our kids read too much fiction, books like this, and not enough about things like electricity, whales and the solar system. >> woodruff: and two economists offer their prescription for addressing what they call the human disaster of long-term joblessness. >> brown: that's all a

all right let's stick to j.p. morgan because there was a hearing on the hill today the house financial services subcommittee how the hearing on systemically significant financial institutions and of course j.p. morgan was the first thing that they brought up because it's a topical news does your and here is one of the key questions that a lawmaker said this j.p. morgan trading loss raises take a listen. and although it appears that the and seems to be that the. firm had sufficient capital to absorb the significant loss one of the questions i would ask is why would a less capitalized institution survive a similar loss. so i want to bring our guest back in because from that sound bite kind of a trend that we've heard came up for us as so he's jim record the author and he's senior managing director at tention capital partners one of the things this kind of made our wheels turn about is something that we often hear from smaller players on wall street that aren't from the too big to fail banks who say that regulation really s

that's not the full j.p. morgan picture, of course, because they have a lot of swaps that aren't cleared. that would have been our principle regulatory -- in terms of the bank we don't have any -- >> you really didn't know what was going on or the problem with the trade until you read the are press reports like all of us? >> well, that's what i have said, yes. >> yes, sir. chairman schapiro, i pose the same question to you. >> certainly. >> where was the sec here? did they know what was going on and if not, why not? >> the sec became aware of the activity again also through press reports back in april when when the london whale trading was first reported on. just to remind everyone this activity did not take place in a broker-dealer and we do not have oversight responsibility over the broad based cds index products that were the subject of much and i think there is still much to learn about the full -- >> what was your responsibility as you see it as chairman of the sec looking at what happened or trying to find out

global j.p. morgan say well they're not going to prosecute lehman brothers so we'll just do the same thing with them up will it'll collapse but before that it collapses we're going to steal a quarter of a billion dollars because there's no laws against it because that there's legal yeah there's a nickel dance sad very sad ok stacy ever thanks so much for being on the kaiser report thank you max don't go away much more coming your way so stay right there. well with the. technology innovation all the developments around. the future are covered. with. welcome back to the kaiser report i'm max kaiser time now to turn to chris whalen senior managing director of tangent capital chris whalen welcome to the kaiser report thank you max all right chris whalen what has the fed done to our economy well what have they done they're basically trying to keep everything the way it was beautiful stay sis this means no debt reduction no taking apart the big banks and no going after the people who ran the big banks and did

of j.p. morgan has opened his pie hole again say server yes max your favorite trend in new york city he's back here so where well we know he's going to toss it together and go roust well last wednesday in fact he was up in new york bed along with a bunch of other c.e.o.'s of the banks diamond sites give and take after bank chiefs meet at fed j.p. morgan chase and company chief executive jamie diamond said there was give and take when bank leaders met with federal reserve officials to discuss industry oversight in new york last week oh yeah well we get he takes you know a little tape worm. i want you to tape one any money for me to steal. and then obama says we can look back we have to go forward let's pass laws to make it easier for james is still money. money. and he goes back into the warmth of his layers people and cost of leora where he lives a little family of tapeworms. jamie i was just me. but i maybe because of the tape. and lenders including new york based j.p. morgan the largest and most p