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Show Entire ArticleGartman: ‘Rogue’ Trader Scenario Unlikely in JPMorgan LossCNBC.com | May 11, 2012 | 06:52 AM EDT
The $2 billion trading loss announced by JPMorgan Chase on Thursday as a result of a failed hedging strategy does not bear the earmarks of coming from only a “rogue” trader, and developments that follow are more likely to get worse for the Wall Street bank rather than better, Dennis Gartman, founder of The Gartman Letter, told CNBC on Friday.
"I operate under the old rule that there is never just one cockroach, when ill news comes out there is usually more ill news to follow,” the famed investor and former floor trader said.
“This clearly isn’t a rogue. This is not the same thing that happened at SocGen, by any stretch of the imagination,” said Gartman, making reference to the 2008 trading losses suffered by French Bank Societe Generale [ GLE-FR 17.21
-0.295 (-1.69%) ] at the hands of a single trader, Jerome Kerviel.
A JPMorgan [ JPM 36.985
While stressing that not all the facts are yet available, Gartman said he believed the failed hedging mechanism appeared more akin to “a proprietary trading operation,” whereby a bank uses its own money rather than its customers’ money to trade stocks, bonds, currencies, and other financial instruments.
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5/11/2012
Gartman: ‘Rogue’ Trader Scenario Unlikely in JPMorgan Loss
via cnbc.com
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