Jamie Dimon Says JPM Could Lose Up To $5 Billion From PIIGS Exposure

Tyler Durden's picture

In an interview with Italian newspaper Milan Finanza on Saturday, JP Morgan CEO Jamie Dimon said that he could lose up to $5 billion from the firm's exposure to the PIIGS countries. As Reuters reports, "Dimon said the bank was exposed to the five countries (PIIGS) to the tune of around $15 billion. "We fear we could lose up to $5 billion ... We hope the worst won't happen, but even if it did happen, I wouldn't be pulling my hair out," he said. Dimon said Europe was the worst problem for the banking sector. "But the EU and euro are solid even if the states will have to be financially responsible and do all they can to develop common social policies," he said." While it is admirable of JPMorgan to disclose some of its dirty laundry, as this was a topic that received hardly any mention in the firm's prepared quarterly release, and is predicated surely by the fact that its Basel III Tier 1 Common of $122 billion dwarfs this possible impairment, there are some questions left open. Such as what happens if and when Greek CDS, now most likely before March 20, were triggered? And the logical follow up - what happens when Portugal, Ireland, Spain and Italy, and who knows who else (Hungary?) follow suit and decide that a coercive restructuring is actually not suicidal, even though it most certainly is once a given threshold is reached. In other words, how long can Europe tolerate the same two-tiered sovereign debt market that S&P warned about so explicitly yesterday? Finally what happens to JPM's Tier 1 Common when the European dominos impact not only the directly exposed PIIGS nations, and specifically their bonds, but all those other banks, insurance and reinsurance companies, whose current viability makes up the balance of JPM's remaining $117 billion in Tier 1? Because in its essence, stating that JPM is "fine" even if Europe were to collapse is analogous to Goldman telling Congress it would collect on its AIG CDS if and when the CDS market were to implode absent the government bailout of AIG, which itself was accountable for over $2 trillion of the entire CDS market itself.

More on what Jamie said:

Dimon said the recent extraordinary liquidity measures taken by the European Central Bank had been a good move.


"Banks will have to have more capital and sell assets, but at least they have liquidity," he said.


Asked about the U.S. Federal Reserve's bank stress tests, which will come out in March, Dimon said his bank would pass.


"I hope the test shows American banks, perhaps with one or two exceptions, are very well capitalised, indeed too much," he said.

No they are not, and we hope everyone understands this - after all in a world in which daisy-chained liabilities are rehypothecated via the shadow banking system into virtual infinity, the failure of one bank would lead to the failure of hundreds, and explains why no bank has been allowed to fail. Last we checked, the nationalized fate of Dexia is still in limbo. Which also explains why the only strategy so far has been to make banks TBTF: simply - so they can step in and buy firesale assets where the Fed and other central banks are politically prohibited from entering. As Jamie himself admits:

Asked if the bank could take advantage of the problems facing Europe's
banks and buy assets, he said, "we have already bought some assets and
would like to possess others".

Bingo - Europe's collapse, which according to some is getting its "financial advice" from JPM, it JPM's gain. Until a point of course - that point being where the impairment of assets overtakes the preexisting capital buffer. And with Europe having trillions and trillions of debt that has to be marked down by at least 50% for it to be viable, not even JP Morgan would survive a realistic reassesment of the debt "problem."

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Mongo's picture

I can hear US taxpayers chanting "JAMIE JAMIE JAMIE...."

WestVillageIdiot's picture

"But the EU and euro are solid even if the states will have to be financially responsible and do all they can to develop common social policies,"

What does that mean "common social policies"?  Is that when they all band together to share cattle cars and railroad tracks to send the "enemies of the people" to the camps? 

This is really scary shit.  The ongoing creep of government with the blessing of the financial and corporate powers continues.  The problem is that at some point that creep of government goes too far.  The breaking point is reached.  So many people have been bought off for their compliance to the state that the state can no longer pay. 

That is what happens when an entity like the Soviet Union can no longer pay.  Everybody just says "fuck it".  They were willing to go along when they were at least getting paid, or pretending to get paid.  Just look at the good old USofA and the creep of government.  The public unions are paid.  And just look at the armies of police, regulators, inspectors, administrators that are now choking the shit out of the constitution.   The welfare recipients are paid.  The farmers are paid.  The financiers are paid (oh, boy, are they paid).  The students are paid (and too stupid to know that they will be shackled forever by that payment).

All along the line everybody gives up their freedom to ensure their cut of the governmental graft.  Just ask those 30 cops at Zuccotti Park, with their millions worth of equipment, to watch over 6 rag-tag hippies, one with a cat in his jacket.  They will go along as long sa they are getting paid.  They will bust heads and praise Big Bro-man as long as the direct deposit hits every other Friday.  Everywhere you see the government's mercenaries, ready to defend their sugar daddy.

Until the pay stops.  Then those common social policies of which Mr. Dimon seems so fond all go haywire.  And another era is born.  It's freedom and responsibility or its oligarchs and pepper spray.  I don't know the future but I know that government's ability to buy people off is coming to an end.  That is what all this is about.  They know it.  They just hope nobody else does. 

Calmyourself's picture

I highly recommend this short read. It describes the rise of the Praetorian class (described above) which guards the elite and its degenerating effect on society and the body politic.


Kayman's picture


Our praetorians are the 1% and the overpaid, overbloated bureaucracy. Always ready to dispense with the constitution and natural justice.  Everyready to isolate and insolate themselves from their fellow man.

JW n FL's picture



U.S. banks increased sales of insurance against credit losses to holders of Greek, Portuguese, Irish, Spanish and Italian debt in the first half of 2011, boosting the risk of payouts in the event of defaults.

Guarantees provided by U.S. lenders on government, bank and corporate debt in those countries rose by $80.7 billion to $518 billion, according to the Bank for International Settlements. Almost all of those are credit-default swaps, said two people familiar with the numbers, accounting for two-thirds of the total related to the five nations, BIS data show.


But.. But! .. BUT!!

The payout risks are higher than what JPMorgan Chase & Co. (JPM), Morgan Stanley and Goldman Sachs Group Inc. (GS), the leading CDS underwriters in the U.S., report. The banks say their net positions are smaller because they purchase swaps to offset ones they’re selling to other companies. With banks on both sides of the Atlantic using derivatives to hedge, potential losses aren’t being reduced, said Frederick Cannon, director of research at New York-based investment bank Keefe, Bruyette & Woods Inc.

“Risk isn’t going to evaporate through these trades,”Cannon said. “The big problem with all these gross exposures is counterparty risk. When the CDS is triggered due to default, will those counterparties be standing? If everybody is buying from each other, who’s ultimately going to pay for the losses?”

Tyler and Bloomberg both are just being negative nellies! they just need to think Positive Thoughts!

and then the Inner Beauty of the Inside thoughts will shine thru to the outside.. thusly the World will be a Wonderful place to live!

Unicorns frollicing outside and shitting / raining skittles down from above!

AAAAAHHHHHHHH! the Joy of happy thoughts!



JW n FL's picture



Bank for International Settlements

Monetary and Economic Department

CH-4002 Basel, Switzerland


Monetary and Economic


Detailed tables on preliminary

locational and consolidated

banking statistics

at end-June 2011

Oct 2011



Will Congress make technical corrections to Dodd-Frank before the 2012 elections? As more examples of unintended consequences emerge, will the U.S., Europe and Asia be able to find common ground to harmonize new rules to prevent regulatory arbitrage? Join Congressman Ed Royce(CA-40) and Dan Cohen, head of global government relations for DTCC, in the latest edition of DTCC’s Financial Reform In-Focus podcast series. Watch as they tackle these and other key issues in the financial reform debate.



Download a copy of this podcast here

Related Podcast

An Interview with Michael C. Bodson of The Depository Trust & Clearing Corporation (DTCC)
Will the indemnification provision of Dodd-Frank undermine the legislation’s goals of bringing greater transparency and risk mitigation to the OTC derivatives market? Will the principles of user choice and open access be reinforced in the final Rules to protect the integrity of the trade reporting process for OTC derivatives?


disabledvet's picture

"Bloomberg News lists itself as a creditor in the collapse of MF Global." NY Times--Friday the 13th, 2012. then it "delists itself as a creditor" which spokesperson for said "bloomberg news" was quoted as saying "was odd since we are a creditor." just in case you were wondering who...among many of course... was stealing the billion(s?) plus. it was also noted that "MF Global represented a significant amount of the revenue that Bloomberg News reported." One company? REALLY? Goes to show you no matter how you..."bug"...your employees...not only does it not constitute good risk management...in fact it represents THE WORST RISK MANAGEMENT TECHNIQUES IN THE HISTORY OF FINANCE. Now...shall we proceed directly to a TRUE discussion of what terrorism ACTUALLY PRACTICED is?

nope-1004's picture

Jamie Dimon is a sociopathic narcissist - and a POS.


Reese Bobby's picture

He wears nice girlie loafers and his mother loved him very much.

francis_sawyer's picture

Alright then... Fuck him & the loafers he walked in on...

Manthong's picture

If he is admitting to $5B, the reality has to be a lot more.


UP Forester's picture

$5B sounds better than $5T.

Manthong's picture

If you think about, it can't be as little as $5B.

Heck, BofA alone comingled $53 Trillion in Merrill synthetics bets in with deposits.

Maybe Dimons direct PIIGS bond holding is a paltry, measly, insignificant $5B..

but what about the CDS's with everyone else who hold bacon bonds? 


zhandax's picture

You are missing the point, Jamie is willing, right now, to man up and write down $5B.  And that's the end of discussion.  Capiche?  /sarc

Kayman's picture

If everybody is buying from each other, who’s ultimately going to pay for the losses?”

Well, for now you will pay for the losses, sinces losses have been assigned to Governments.

Meanwhile all the fees, from churning and skimming, will be paid out as bonuses.

Have a nice day.

SillySalesmanQuestion's picture



I for one have seen the Joy of Happy thoughts after visualizing 'bout those unicorns... :)


cranky-old-geezer's picture



If everybody is buying from each other, who’s ultimately going to pay for the losses?”

Central banks of course.

Central banks are the true "bad banks", printing currency and buying declining paper at full original value, loading up their balance sheets with trillions of dollars / euros of paper "assets" that are nearly worthless or completely worthless.

Just this week we hear ECB is lowering its "standards" for Euro sovereign debt it will accept in LTRO.

This is the same thing Fed did in '08 and '09 to "rescue the financial system", accepting all manner of worthless and near-worthless paper as long as it had a AAA rating ...which is why rating agencies gave AAA ratings to all that worthless trash financial paper, so Fed could ultimately buy it and pay full price for it ...plus commissions and fees.

Fed's and ECB's balance sheets are the most toxic of all banks, stuffed with boatloads of near-worthless AAA rated paper, and will get more toxic as they carry out their "bad bank of last resort" role going forward.

Will taxpayers ultimately pay the bill?

No, of course not.  US and Euro monetary systems will collapse first.

But taxpayers will take the hit in another way.  The currency they use will become worthless, and every currency-based asset they have will become worthless.

Kayman's picture


Precisely.  We are now completely the full retard Soviet pretend world.  You pretend to pay me and I pretend to work.

The Work Ethic has been replaced by Legalized Criminality.  You (everyone of us) is thought a fool to actually work for a living.  Perhaps we are...

disabledvet's picture

the fact that a Judge allows it does NOT make it legal. The gold bars HAVE SERIAL NUMBERS ON THEM. Steal them...okay. Declare it..."legal" in the sense of "this is how we declare bankruptcy around here." no problem! it's STILL STEALING. In other words...you only need an English Major to understand this type of..."finance"...and of course "past returns are in no way a predictor of future results. all comments said here are meant as editorial ripostes only are done solely for sake of entertaining the masses and in no way constitute investment advice in any meaningful form. for the full legal text please contact your friends at CNBC/legal and they will gladly inform of the risks in assumeing anything we say...or do...is in anyway related to either getting at, finding or believing in the truth in any way shape or form! have a nice day!"

taeonu's picture

“When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time, a legal system that authorizes it and a moral code that glorifies it.”

- Frederic Bastiat - (1801-1850) 
Economic Sophisms

Cadavre's picture

Poor JPM, and poor poor poor Jamie Diamond [s are a Girlie Boys Best Friend]. I really truliest hope they already got their buneruses - I wouldn't know what to do if us taxpayers can't get another B-Counter loan from China to boost poor poor JPM's boneruses profile so all them stroker broker ace trader types talent won't leave Jamie high and dry to work somewheres else!

Here's to double dog hoping S&P downgrades the US really really, and very really, soon, to put JPM stock back on top of the inflation carry racket before all them high fa-looting JPM talents have to go bunz-up to new Jack Lew and force the very very busy Mr. Lew to break from his duties to consult his gypsy tarrot card reader as to whether or not to accept another under bonerused JPM "ex" regarding the mostest unorthodoxy practice of highering a non Goldman white house staff job applicant.

If it weren't for all them Wall Street FAT cats in the white house, they'd being playing find the shekels with pesos at the K-Street Kiddie Brothels!

disabledvet's picture

it ends when you "lose the war." needless to say the greatest battles are fought...inside the mind.

smb12321's picture

Excellent summary. Our direction has nothing do with conspiracy yet evey single action is the next logical step toward "control". When the USSR collapsed we noticed that the State literally ran out of money; folks were on their own. The underground economy (haggloing exchange rates in Red Square - LOL) prevented starvation and total collapse. The difference was that they were not used to the welfare state wherein everything from child care to liposuction to tuition and housing were provided.

Strangely, those pushing us to autoritarianism are convinced it's for the good of the people (Jesus, I hate that phrase.)  I always thought "Atlas Shrugged" a fanciful tale but the similar pathways to an all-powerful State are eerily similar.

Clayton Bigsby's picture

Time to pick up a villa in Como on the cheap, so I can hang with Clooney and Branson...

ToNYC's picture

JPM's head bankster can make up any number he has polled to see if you believe. Orders of magnitude away are of no consequence since Treasury TG is in his digital zero machine in the hidden tunnel dug by freshly-pardoned Nuevo Laredo mule traffickers sent through Well's Wachovia arm being between 33 Liberty and One Chase (Manhattan) Plaza bound only by  William and Nassau Streets and guarded by jack-booted military types that only Deutche Bank was foresighted enough to employ since before the Event.

caconhma's picture

Jamie, are you sure it is just $5 billions or you just forgot a zero at the end?

Eireann go Brach's picture

The heading should be "Jamie Dimon is a fucking Pig and will be slaughtered soon"

fleur de lis's picture

Jamie Dimon is in no position to look down his big, booger-packed schnoz at piigs, raats, rooaaches, tiicks, or anything else I left out, in fact they are his betters, at least they all serve a purpose if for nothing else but keeping exterminators employed.  Dimon's name should be an adverb for parasitic activity.

He was spawned out of early Bolshevik sludge, his grandfather was Panos Papadimitriou, a banker ( what else ) involved in the (non) Turkish Revolution that destroyed the Ottomans, and broke up the ME for easier oil management by the Roths. He comes from the same family of vermin whose life cycles require infestation of monetary systems.

The railroad built by the Sultan to make pilgrimages to Mecca easier for his subjects was seized afterwards and used to control the whole area.

I apologise for calling Dimon a piig as that is an insult to pigs everywhere.

Kaiser Sousa's picture

God damn right...
That's what I've been talking bout.....

Muddy1's picture

"We fear we could lose up to $5 billion ... We hope the worst won't happen, but even if it did happen, I wouldn't be pulling my hair out," he said.

Of course he's not worried.  Ben will just arrange another bailout, and Jamie won't miss his bonus.  Ever notice when a big problem arises it's "their fault", as in the PIIGS?  But when things go well it's look at me and the great things I'm doing?

Bitchez, every one of them.

ebworthen's picture


The wanker is a pathological liar and a sociopath.

This sentence displays it:  ""I hope the test shows American banks, perhaps with one or two exceptions, are very well capitalised, indeed too much,"

With one or two exceptions?  BOA and Citi Jamie?  Notice how he hints at the insolvency of the competition, then intimates that J.P. Morgue has "too much" capital.

Off the top of a skyscraper would work.

Cadavre's picture

... then intimates that J.P. Morgue has "too much" capital.

With the sad understanding JPM is cluster fuck cloister of chronic low iodine droolers, he probably be holding Euros or Urinals or both as de aforementioned capital (dey still trying to work dat one out in the sanctuary of JPM's Bugger the Donkey Room).

Doesn't JPM still have all that weak dollar bet stash of industrial metal tucked away in some humongous vault in London?

imaginalis's picture

What a serious load of turd scrapings. He is only going to lose money because of the problems in Europe? No problems here of course, everything is just peachy, move right along.

WestVillageIdiot's picture

He is right.  As long as the government keeps having $1.5 trillion plus deficits, underfunding Social Security by way of the payroll tax cut, silence Ron Paul and his followers, continue to strip Americans of their rights, enlist Fannie and Freddie to "fix" housing, continue to buy off every possible voter and maintain the world's largest military everything should come up cherries.  I don't see any problems.  Maybe you are just too negative. 

Cadavre's picture

Social Security has always run a surplus at X 100's of Billions / year. At the end of 3Q 2011, in fact, our very famous synogress swapped a stack of USTs for 110 Billion in SS cash (did about the same at end of Q1 2011) that will have to be sold at a discount to the 110 Billion swap amount - either that - or be held to maturity (same diff huh) to get the same, but probably weaker USD units. SS should insist on some precious or [at least] get some TIBs in the weighting of any cash swaps they to with the fondlers on the hill.

UST yields are so low it probably ain't worth the bookkeeping cost to do the swaps for sure. And, the transactions probably go through the primaries soze the trust fund can toss a generous margin stand to synogress friends on the Wall Street. IOW: SS recipients might do better if the cash was just left in SS vaults.

When you look at the IRS individual verses corporate receipts, the receipts from individual taxpayers are a majority of the pie relative to corporate receipts. Guessing if one were to add in FICA receipts (just the 1099 and W2 FICA), then the corporate slice of the pie would be a narrow sliver, indeed, and not worth the dirty cake dish and counter space used to "make it available".

That would be an interesting breakdown: Individual IRS receipts vs Corporate IRS receipts vs  1099 FICA receipts vs W2 FICA receipts vs Corporate FICA receipts vs Capital Gain receipts. Odds are the base (the producers: 1099 and W2 IRS and FICA receipts) would overwhelm [the consumers] Capital Gains and Corporate IRS and FICA receipts.

Jess postulo-guessing it be da wey it is fer sure.


Mr Lennon Hendrix's picture

It remeinds me of the CEOs involved in the Fall of '08 (AIG/Bear/Lehman) that came out right before their banks collapsed and said everything is fine.

Irish66's picture

Well if this story doesn't make you get your money out of too big too fail, you are an idiot.

holdbuysell's picture

Uhh...hold on...I'll be right back.


bpom's picture

Gap up on Tuesday.

f16hoser's picture

5 Billion - 1.2 Billion (stolen from MFG Customers @ gunpoint) = 3.8 Billion.

CMON Dimon, do the math right!

JPM Hater001's picture

Awe phishizel.  You wen der di'nt ya.

Pop a cap in the ass of that comment.  dead on baby.

cranky-old-geezer's picture



It was $6.2 billion before the MFG heist.

Now it's only $5 billion.

Doing God's work, ripping off the goyim.

slewie the pi-rat's picture

thxz for the dexia update and the "systemic" strategy of using zombies where CBs are not allowed to feed

anybody else wondering how much of this "exposure" = recently added re-hypothecated assets from, say, a failed PD...?  L0L!!!

i see where the morgue took in $3 Billion by selling its own IOUs last week, too...

Heroic Couplet's picture

IOW, Jamie Dimon, CEO, is a JPM FAILURE. The bigger they are, the harder they fall. He's the only one who benefited from the housing bubble. He should be the only one who has to answer to the private bank cartel families.

RobotTrader's picture

JPM is at the very top of the PigMen Food Chain.


That is why this news/announcement is extremely bullish.

Why is that?

Because JPM is the prime brokerage/banker for the Rothschilds, Bilderbergers, and virtually all the high-end "by invitation only" money manglers like Bessemer Trust.

Flat out, JPM will be bailed out, come hell or high water.

They have absolutely nothing to worry about regarding:

1) Being the number one "Derivatives Colossus" on the planet

2) Being a huge lender to the PIIGS countries

3) Being short billions of ounces of gold and silver

TPTB will do everything and anything to keep this monstrous entity afloat, and will steer financial markets accordingly to JPM's favor.

Dimon is sandbagging right now, eventually the PigMen will turn the credit markets around in JPM's favor and next time JPM reports it will be "less bad" or "beat 'da numbah" time and JPM's stock will skyrocket and drag the entire XLF up with it.

As Tim Wood would say "You Have Been Warned"!!!


Mr Lennon Hendrix's picture

They have been bailed out.  This is not just about bailing out the Nation-States, but their (private) banking sectors.  The House of John Pierport Morgan is directly caught in this shitshow (and it created said shitshow, by the way, like the man J.P. Morgan did one hundred years ago so to have cause to institute the Federal Reserve Bank) because if the CDS are triggered they lose on the debt.  Of course, they own the CDS too, but who cares what you own when a continent collapses.

Europe collapses, the US collapses, flase flag, probably all this year.  Can't wait for 2013....