The world may never know, or at least not for a while: As the learned folks at Alphaville report, Morgan Stanley came out with a note last week suggesting the trading losses may touch $5 billion, or $2 billion more than JPMorgan’s estimate. The reasoning:
“The question is, how does Jamie Dimon expect only a $1B+ future loss over 2-3 quarters if a 6-week move drove a $2B+ mark-to-market loss. Either JPM has already started to reduce the size of this position materially, or management’s outlook for volatility is lower, which seems odd given rising risks in Europe and US growth stabilizing after recent acceleration. As a result, we have a slightly higher mark-to-market loss estimate of $5b vs. Dimon’s $3b.”
If Mr. Dimon knows, he wouldn’t say. He did reveal that the bank would suspend its share buyback program out of deference to regulators (which, bummer, because the stock is off something like 20 percent since the losses were disclosed). And perhaps to show that his firm was getting back to business as usual, Mr. Dimon took a swipe at restrictions on market-making.
[Eric Piermont/AFP/Getty Images]