JP Morgan's Loss On Big Trade Could Reach $9 Billion

JP Morgan recently reported that it had lost $2 billion on a bad trade, and that the loss could increase.  This article reports the the loss could reach $9 billion.  Hedge funds have figured out how to make lots of money by exploiting the weakness in JP Morgan's position.  JP Morgan can survive the bigger loss, but losing $9 billion on a trade is not a good thing for a bank that is using insured deposits to make risky bets. To paraphrase Everett Dirkson's comment about federal spending: "$9 billion here, and $9 billion there, after a while these billions add up".  Of course, Mitt Romney has no problem with the loss.  He argued that JP Morgan's loss is another investor's gain.  He is correct.  That is the way Las Vegas works as well.  One bettor's loss is another bettor's gain. However, we don't insure JP Morgan's deposits so that it can gamble with insured funds.