j.p. morgan story how j.p. morgan's hedge blew up in one easy chart now the chart that they show basically we're just going to say it's showing delta collapse and you see that downward slope there that's j.p. morgan was losing money during that because the first major drop right there you see that's from q.e. one so every time the fed dumped money into the markets it was actually costing j.p. morgan a lot of money and they had to take on more hedges to zero hedge right well greed and avarice were likely strong drivers that blindfold a brutal excel in his colleagues to the fact that they were getting too big and that the position was out of control every means fact that it was a combination of the fed e.c.b. actions to squelch the stomach risk entirely and a total reliance on models that is now bleeding to every other credit index and just as we said leading to increased losses at j.p. morgan. hedge they call ahead to avoid compliance with the law yeah but the important thing here max is this is collateral damage the federal reserve has been quantitative easing the printing money dropping stuff out of helicopters

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 trading losses that resulted in a regulatory probe so basically dissed by billions of dollars spent on financial regulation that is increased over the years we'll ta

and the fed will talk about them there j.p. morgan's main bank regulators here's what the as they see those said they had responsibility over with regards to j.p. morgan's trading loss according to mary shapiro in that hearing today let's take a listen. when they talked about the their potential all the risks that they faced as a business when they talk about potential losses under their foreign model we are very focused on the accuracy and the timeliness of that disclosure so she mentions the bar model's the value at risk and this is where they would have come into play as having some oversight now we know that j.p. morgan day their risk models the bar models within this show the london wales office they changed those models then they announced this trading laws then jamie dimon said hey and we're going back to those old models we don't know a lot about how or why or what went into that but in your view did that as these the mess up here did they miss this. well first the broader point it's very strange that you're starting the day con

j.p. morgan's about to speak on the conference call. i won't add to j.p. morgan not at all considering what's going on overall. >> the key is you want discipline. you want discipline with your losers, too. you can't react to this. most people aren't able to trade this after market. most people aren't able to react to this until tomorrow. that's where you have to let your judgment be your guide. wait a little bit and see if the smoke clears. >> i would be predicting that the reaction is negative. the yield spread's compressing the second quarter of earnings is in a problematic position. the fun flows into equities have been negative. then there's a big political diameter to this which is the volker rule. the volker rule comes into effect in july allegedly. and it does really have questions as to what is and what is not prop. that's a big focus of what j.p. morgan has to deal with at 5:30. >> there's one analyst on the street this week just three days ago who was advising investors to get to the sidelines on j.p. morgan. >> banking industry is a later version

the u.s. president take a listen. j.p. morgan is one of the best managed banks there is jamie diamond the head of that is one of the smartest bankers we are and they still lost two billion dollars in cali . precisely because they were making bets. in this biz derivative markets we don't know all the details yet it's going to be investigated but this is why we passed wall street reform. this is why you passed wall street reform what reforms exactly because dodd frank didn't stop this from happening and the volcker rule in its current incomplete incarnation would have arguably allowed for it to because of loopholes we'll get back to that later the hold that thought let's get back to jamie dimon because there seems to be a more fitting description of him then the best guy on wall street how about this jamie diamond the clown now we can't take full credit for this image it's inspired by one of our guests janet have a koli who writes in her latest piece that j.p. morgan's chief is the world's funniest finance a year and as so often ha

slammed the market with an unmitigated gall of a financial terrorist keep it up ok well call down in your continues on this story as well more insider trading j.p. 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

the f.b.i. puts j.p. morgan's $2 billion trading loss under the microscope. >> tom: and this man's job is protecting consumers from bad loans. we talk with richard cordray head of the "consumer financial protection bureau." >> susie: that and more tonight on "nightly business report". >> susie: more fallout today for j.p. morgan. now the justice department is investigating the bank. the f.b.i.'s new york office is leading the inquiry into 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 th

and they say the $2 billion j.p. morgan loss is a small fraction of its $2.3 trillion in assets, or less than 10% of the bank's pre-tax profits. >> if anything, i think the lesson to this is that banks can take multibillion dollar losses and it's not an issue for the system. we didn't throw taxpayer money at it, so this is a perfect example of this is how the system's supposed to work. >> reporter: that's not how many in washington will see this. j.p. morgan has lost not just money, but a lot of credibility when it comes to lecturing regulators about safe banking practices. darren gersh, "n.b.r.," washington. >> susie: joining us now, richard bove, veteran banking analyst at rock-dale securities. dick, the title on your report today about jpmorgan said, "this is demoralizing." and yet, you're still recommending the stock so tell us why. >> well, it's demoralizing because we've seen this enormous improvement in the quality of bank balance sheets over the past three years, and we see their earnings go up, their dividended go

at the london whale capsizes 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

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 chase changed the locks seized new owner's property so a kansas city man is taking on banking giant j.p. morgan chase accusing the company of something that he said would have landed anyone else in handcuffs alan dann fourth bought a house in a short sale in fall of two thousand and ten j.p. morgan chase held the previous owner's mortgage down for said two months later without notice the bank changed the locks and hauled away twenty five thousand dollars worth of furniture appliances and family heirlooms. follow up on the blitzkrieg metaphor of high frequency trading in the national socialist party like atmosphere around j.p. morgan what you're describing there i guess historically the analogy would be. kristallnacht where the nazis rolled into town and they started destroying property this is the timeline this is that moment in history where you've got one out of control dictator jamie diamond lloyd blankfein could be the most lanie in this case or just stealing whether it's m.f. global through a banking system or going to people's home stealing their money and doing all manne

stock it arrives in the mail then i would make a video of burning that share burning paper j.p. morgan stock one share at a time there are only so many shares out there extent in the world let's burn it all down further all j.p. morgan stock up on fire out of j.p. morgan stock up. i like that i go there well dan for if this guy had his house 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 stealin

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

the chief investment officer at j.p. morgan chase retired, becoming the first casualty since the bank announced a $2 billion loss. rival party leaders in greece began a last-ditch effort to form a new government. but the uncertainty weighed on markets worldwide. the dow industrials lost 125 points. online, there's a new tool for those pondering retirement. hari sreenivasan explains. hari? >> sreenivasan: it comes from the financial security project at boston college. economics correspondent paul solman dubs the video short, easy to use, occasionally cheesy, but extremely insightful. find out for yourself on his making sense page. on our world page, read about an organization in pakistan working to give women tools to improve their standing in society. all that and more is on our web site, newshour.pbs.org. jeff? >> brown: and that's the newshour for tonight. on tuesday, we'll look at how a financial default in greece could impact the u.s. economy. i'm jeffrey brown. >> woodruff: and i'm judy woodruff. we'll see you online, and

the armed wing of j.p. morgan let's be frank about it that the police are the armed wing of j.p. morgan they give the money they crack skulls of anyone who doesn't like to be ripped off by bankers that's their job they were a blue suit with a star but don't be fooled they work for the banks well i looked up on wikipedia a vassal of vassal or future tory is a person who has entered into a mutual obligation to a lord or monarch. in the context of the feudal system in medieval europe or i might add to this wiki pedia go do it right now or modern america the all the geisha is often included military support and mutual protection and exchange for certain privileges usually including the grant of land held as a fiefdom or as you say ten thousand donuts then as a get worse and worse more out of shape they have to get bigger and bigger guns so if they spot a perp they think they want two steps rather breath tell him what the hell do out of breath to go chase someone just tell him oh there's like dota i'm so happy thank yo

the future right. 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 division or and here is one of the key questions that a lawmaker said this j.p. morgan trading loss raises take a listen. 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 records the author and he's senior managing director tension 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 saddl