JPMorgan Chase this past week exhibited perfect timing; not for itself but for regulators trying to slip the noose of tighter regulation around its neck. The $2billion loss reported may be a loss that stemmed from exactly the kind of thing that the Fed has been trying to limit by constricting banks’ trading activities. But with new revelations the plot thickens, or thins depending on what you believe… JPMorgan’s huge loss is now rumored to be in the process of leading to three top-level departures. Interestingly ‘The Whale’ is not among them. This loss is being portrayed as the result of hedging activities gone-bad in responses to risk-management stemming from the European debt crisis. And that might be the way it happened. Jaime Dimon is furious with his people for this mistake. Heads are rolling. This big public black eye will set him back as the mouth-piece for banks against heavier regulation. But the real question is whether this loss was from actual hedging and was the result of an attempt to mitigate risk or whether it was from an attempt to profit from the debt crisis itself. By not firing The Whale up front the PR angle is that it was not a big trading loss, but something else. But, of course, JP is aware that it is being watched. While The Whale is not being dispatched immediately he is rumored to on his way out too. But this time it is very much to JP’s advantage to portray this as a hedge gone wrong than as a bet gone wrong. But how do we know which it was and will anyone ever really find out? When you are too big to fail you can take all kinds of risks because the sun always comes up in the morning for you. Was JP gaming its TBTF status or was it really a hedge gone wrong? Was this a sub-zero hedge or an outright loss? Inquiring minds want to know.