Even though the Dow Jones Industrial Average
In just the past seven trading days since JPMorgan announced a multibillion-dollar loss on a proprietary derivatives trading bet gone bad, each of the two behemoths has fallen 20% and 12%.
Today, JPMorgan announced that it's suspending its share-buyback program only two months after it passed the Federal Reserve's stress tests allowing it to begin the program. Two analysts downgraded the stock today. Although the company will probably shed significantly more in market cap that it stands to lose from the trade when all's said and done, it's unclear how much money it will ultimately lose. Hedge funds have been attacking for weeks, and with the spotlight firmly on JPMorgan's blunder, you can expect they'll continue to hack away, driving the bank's losses ever higher.
JPMorgan had been, rather optimistically, viewed as the role model in risk management by an industry desperate for role models in the wake of the 2008-2009 financial crisis. With the grudging acknowledgment that even JPMorgan is still human and the trading positions at large banks inhumanly complex, investors rightfully worry that maybe JPMorgan as well as Wall Street's runts -- Bank of America and Citigroup
In other disappointments today, shares of Facebook
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Ilan Moscovitz doesn't own shares of any company mentioned. You can follow him on Twitter, where he goes by @TMFDada. The Motley Fool owns shares of Citigroup, JPMorgan Chase, and Bank of America. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
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