Quote:
Originally Posted by jasonturbo
Even if the end result of this ordeal is a specific risk management unit posting a 2 billion dollar loss... it's such a small percentage of the securities managed by JPM that it's fairly insignificant. The only reason this is making headlines is because JPM has typically managed to avoid the calamity that many of the other big banks have suffered.. Dimon of JPM said it best "we have egg on our face" that's about the extent of this loss and how it came to be.
JPM holds over 2 trillion in assets... So a 2B$ loss is not exactly cause for concern.
Additionally JPM did not ask for TARP funds (25 billion for JPM), it was forced onto them and they paid the TARP money back before any other institution.
It's a well managed company, they take risks to make money just like any other firm, and historically speaking their risk management strategies have been more effective than those of their peers.
What's the social cost?
At the end of the day, if individual consumers weren't so retarded with personal spending, the events leading up to, and financial collapse of 2008 probably would have been avoided. Whether or not you can get a mortgage shouldn't depend on "if a mortgage broker says you can" it should also depend on if you can truly afford your mortgage. (Taking all things into consideration, including your job security and ability to service your mortgage during a period of economic contraction)
If people never perpetuated the housing bubble, it never would have formed.
|
Very well put.
And I agree that with their portfolio, its a shitty deal for the month, but egg on their face does not equal..."man the shredders". Damn...lost $2bn..guess I have to go for the grande instead of the venti.
I guess the main reason it interested me is the bets are so large that a small movement caused a $2bn loss. It's the same game that happened in 08.
And yes, there is a level of personal responsibility to the whole thing, but the banks that collapsed weren't exactly innocent in the whole affair. For every person willing to sign a redonc mortgage, there was a bank willing to sell it off as an investment, with AAA stamped across the top.