Aside from this article in Reuters, which pieced together part of the mystery, as far as I can tell, with all that’s been reported about JPMorgan’s trading loss of more than $2 billion, there’s one part of the story that’s not been fully covered: If one party loses billions in a trade, another party - or, as seems to be the case here, many parties have to have made those billions.
So far, the most public reference to that side of the story I’ve seen is an offhand comment made by a politician who’s always looking at things from a business angle. According to the Wall Street Journal, when he was asked last week about the JPMorgan fiasco, Mitt Romney told a radio interviewer: “That’s the way America works. Some people experienced a loss in this case because of a bad decision. By the way, there was someone who made a gain ” To be sure, if the Reuters piece is correct, this seems to be the way the world, not America, works: Those on the other side of the trade so far seem to include London-based hedge funds.
So who are the lucky winners? Does JPMorgan even know? What about the fact that the Reuters piece notes that at least two of the winners used to be traders at JPMorgan? And what more can we find out about the drama unfolding right now as these traders decide whether to push for more winnings against JPMorgan or take their money off the table? How does this poker game work?