The European Central Bank stopped monetary operations with some Greek banks today, Reuters reports, the latest bit of bad news for Greece and just about everyone else. Savers have been withdrawing funds from Greek banks at a rate of more than $800 million a day, as the failure by Greek political parties to form a governing coalition raises fears of a eurozone Grexit. Markets fell on the news. And JPMorgan’s credit derivatives bet, the one that led the firm to disclose $2.3 billion in trading losses last week, is looking worse and worse.
From International Financing Review:
So far, the market environment has not been forgiving. Bank downgrades in Italy, renewed fears of a Greek exit from the eurozone and sovereign contagion have weighed on markets.
“When I look at the way the indices have been for the last 24 hours I think they [JP Morgan] must have lost another US$200m. I don’t know what their exit strategy is, but their mark-to-market is going to be very painful,” said the credit trading head (speaking on Monday afternoon).
“The indices have been blowing up in the last 72 hours. Either [JP Morgan] are unwinding with clients or these guys are front-running them. They’ve been unlucky with the broader events like Greece, but it looks to me as if they’re chasing the market,” he added.