Behold the Fortress Balance Sheet that Bleeds $2 Billion

Receiving Wide Coverage ...

A Crack in the ‘Fortress’: By now, you’ve probably heard about JPMorgan Chase’s revelation of a $2 billion trading loss in the Chief Investment Office (home of the notorious “London Whale”) and CEO Jamie Dimon’s display of contrition in a hastily scheduled conference call. It probably occurred to you that this played right into the hands of a whole bunch of pundits out there who want to strengthen regulation, even before you read Dimon’s quote that it “plays right into the hands of a whole bunch of pundits out there." It may also have occurred to you before any journalist started typing that the “egregious” (Dimon’s oft-quoted descriptor) blunder undermines his image as the exceptional CEO of the exceptional large bank with the exceptional “fortress balance sheet,” and that the news is especially awkward for JPMorgan given that a month ago Dimon had dismissed all the news reports about the Whale’s risk-taking as “a tempest in a teapot.” Not to mention the CEO’s increasingly cocky public pronouncements about overreaching regulators and poor put-upon bankers. You may have even spent some time trying to piece together what exactly went wrong from the details that JPMorgan disclosed and the previous market chatter about CIO trader Bruno Iksil’s position on an index of corporate credit default swaps. To help you navigate the sea of media coverage, we’re going to break it down for you by theme. Here goes.

The basic overviews: Wall Street Journal, Financial Times, New York Times

Ammo for the reformers: Somewhere, Paul Volcker (you know, the guy Dimon dissed on television a few months ago) is saying “muahahaha.” New York Times, FT “Lex” column, FT Business blog

Behold, the god who bleeds: Not even Dimon’s JPM is infallible. Wall Street Journal news story and “Heard on the Street” column

Drill-downs on the troublesome trades: Wall Street Journal, FT Alphaville blog, Reuters' Felix Salmon, Dealbreaker's Matt Levine.

Miscellaneous: U.K. regulators have requested information from JPM about the trading losses and what it's doing to prevent a repeat, the Journal reports. The paper also has a pretty cool interactive feature that annotates JPMorgan's 10-Q filing with bits of context and translation.

The Volcker Rule: While acknowledging the JPM trading loss as an example of why “taxpayers don't want to stand behind Wall Street trading desks,” a Journal editorial criticizes the Dodd-Frank Act’s ban on proprietary trading at insured banks as giving regulators too much discretion. The FT reports Goldman Sachs is shedding hedge fund investments ahead of the Volcker rule taking effect in July. The Times covers a Congressional hearing where Paul Volcker defended the rule that “somehow has my name attached to it.”

Alternative Currencies: The “A-hed” in today’s Journal (that’s the quirky story at the bottom of the front page) is about “Canada’s unofficial second currency” — no, not the Canucks’ digital-money experiment known as MintChip, but the popular paper bills issued by Canadian Tire Corp. Meanwhile, Wired reports that here in the U.S. the FBI is worried about the electronic currency Bitcoin’s popularity among criminals — and the magazine has the papers to prove it.

And, Lastly…

Rolling Stone: Yes, it's Matt Taibbi again. This time he skewers the administration, lawmakers from both sides of the aisle, the regulators and the financial industry's lobbyists for watering down the Dodd-Frank reforms, during both the legislative process and the subsequent implementation (or lack thereof, he might say). If you're familiar with Taibbi's writing, you know what to expect. If not, reader discretion is advised.