Who Benefited from JPMorgan's Losses?

MAKING SENSE -- June 5, 2012 at 3:05 PM EDT

Who Benefited from JPMorgan's Losses?

JPMorgan Chase world headquarters on Park Avenue in New York City. Photo by Timothy A. Clary/AFP/Getty Images.

Paul Solman frequently answers questions from the NewsHour audience on business and economic news on his Making Sen$e page. Here is Tuesday's query:

M. John Matlaw: So if JPMorgan Chase lost a bundle, who did they lose it to? Who's two or three or four or five billion dollars richer because of JPMorgan Chase's losing bet?

Paul Solman: The so-called "counterparties." That is, the institutions they bet with. We don't know who they are yet, and may never know. Hell, we don't even know what bets the bank lost its money on.

I understand the need to report the facts as best one understands them, as quickly as possible, but let me quote Doug Dachille, the man who used to run JPMorgan's Proprietary Trading desk. I wrote to him perplexedly after having read numerous accounts of the bets in the New York Times, Wall Street Journal and elsewhere, each of which contradicted the others in significant ways.

"Using only publicly available financial statements," Dachille wrote back, "even an experienced veteran of banking and fixed income trading, like myself, who has a deep understanding of bank accounting and who ran Proprietary Trading and Derivative businesses, cannot understand what is going on and what the risk exposures of the organization are."

Neither, it seems, could its CEO, Jamie Dimon.

This entry is cross-posted on the Making Sen$e page, where correspondent Paul Solman answers your economic and business questions.

Follow @PaulSolman

Beginning October 24, 2012, PBS NewsHour will allow open commenting for all registered users. We hope that the elimination of our moderation process will enable a more organic discussion amongst you, our audience. However, if a commenter violates our terms of use or abuses the commenting forum, their comment will be removed. We reserve the right to remove posts that do not follow these basic guidelines: comments must be relevant to the topic of the post; may not include profanity, personal attacks or hate speech; may not promote a business or raise money; may not be spam. Anything you post should be your own work. The PBS NewsHour reserves the right to read on the air and/or publish on its website or in any medium now known or unknown the comments or emails that we receive. By submitting comments, you agree to the PBS Terms of Use and Privacy Policy, which include more details.