JPM debacle washes across markets and digital world

The Dow couldn’t rally its way out from under the weight of JP Morgan’s $2 billion trading loss disclosure Friday and dropped 34 points to 12,820 while the S&P 500 was off 5 points to 1,353. The Nasdaq gained a point. JPM was down more than 9 percent to $36.96 Friday even before Fitch downgraded its long and short-term debt issuer ratings.

JP Morgan’s disclosure on Thursday continued to command attention on Friday and reports came in that regulators on both sides of the Atlantic were investigating the blunder that involved the bank’s attempts to hedge its credit risk. While details are emerging on the problem there could be implications for Connecticut’s financial industry as regulatory reform backers catch a new wave of ire over Wall Street banks’ behavior.

It’s particularly important here, as it’s been surmised that on the other end of those JPM trades were hedge funds. Whether that sets off more calls to regulate the hedge fund industry has yet to be seen, but expect a fight in this political season.

Rob Varnon