Reuters has reported that the biggest parlor game on Wall Street is estimating how high JPMorgan's trading loss will end up being.
The news agency says that the losses will grow, some traders say, because it appears JPMorgan has only sold a small portion of its position, leaving it vulnerable to price swings in a thinly traded market.
And The New York Times has now reported that, according to its sources, the trading losses have surged in recent days, surpassing the bank’s initial $2bn estimate by at least $1bn.
When Dimon announced the losses last Thursday, he indicated they could double within the next few quarters. But that process is believed to have been compressed into four trading days, as hedge funds and others take advantage of JPMorgan’s distress, fueling a faster deterioration in the underlying credit market positions held by the firm.
Finally, MarketWatch reports that, as JPMorgan Chase's stock has taken a tumble since details of the losses were announced, the firm might be able to turn the situation to its advantage. For whatever J.P. Morgan loses on its soured trade, it also stands to save plenty by carrying out its share repurchases at a lower price.
It could take the bank one quarter, maybe two, to make its money back in savings, reckons Marty Mosby, an analyst with Guggenheim Securities.