Double Trouble at JP Morgan: Trader's Losses Could Exceed $7Bn!

This is what is coming up for the world financial system!

• Trust me the loss is definitely way over US$7B. Figures of US$31.5B from ZeroHedge’s analysis is closer to the truth. What has been revealed are but the tip of the iceberg. The detonation of the financial derivatives market has started. If Jim Willie is correct, JP Morgue will face hundreds of billions of losses in the coming few months. Jim Willie is of the opinion that it may even touch US$1T by next year. This will bring down JP Morgue. They hold something like US$70T in financial derivatives. When JP Morgue goes down, it is Armageddon for the world financial system!
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  Double trouble at JP Morgan: trader’s losses could exceed $7bn! 
  by Nick Goodway , Gideon Spanier ,
  http://www.independent.co.uk/
  
  US bank has cancelled its plan for a share buyback in the wake of the growing crisis
  The crisis at JP Morgan escalated yesterday as it emerged its trading losses in London could rise to as much as $7bn (£4.5bn) and the US bank cancelled a share buyback. Fears were growing that the losses could spiral from an initial $2bn, which was declared on 10 May, as JP Morgan struggles to unwind the massive bets made by the so-called “London Whale” trader Bruno Iksil.
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  In a further blow, chairman and chief executive Jamie Dimon has suspended plans to use the US bank’s own funds to buy back $15bn worth of shares. Buybacks are a popular way for firms to use up cash sitting on the balance sheet and prop up the share price.
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  JP Morgan shares tumbled 82 cents or 2.45 per cent to a new six month-low of $32.67. The bank’s value has fallen by a quarter in a year. Mr Dimon insisted that the decision to cancel the buyback was not linked to fears about a possible increase in losses. “You should not interpret this as anything about the size of the loss,” he said.
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  But as doubts persisted that the crisis has not yet abated, speculation was mounting that Mr Dimon could be forced to give up at least one of his dual boardroom roles. He has previously been regarded as the savviest banker on Wall Street as JP Morgan survived the credit crunch without a bailout.
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  Rival traders reckon that the losses could be as high $7bn. “The markets know pretty much what JP Morgan has and in what sizes,” said one trader. The main index on which Mr Iksil’s credit default swaps trades were based has calmed down in recent days, which suggests that JP Morgan has decided to trade out of its positions gradually rather than take one massive hit. Mr Dimon originally said the bank would deal with the positions to “maximise economic value”. But there is a danger in taking the long view. Mr Iksil was betting on the credit-worthiness of corporate America and if that starts to fall JP Morgan’s losses could mount further.
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