Jamie Dimon, the head of JPMorgan Chase, was proclaimed "America's least-hated banker" on the cover of The New York Times Magazine in December 2010. Today that title looks like a bad joke.
The reason is that Dimon's bank, America's largest, announced last week a loss of $2.3 billion on a complex derivatives trade. Dimon has been an outspoken critic of the Volcker Rule, a proposed new regulation that would forbid banks that are federally insured from making such trades that put at risk depositors' money. JPMorgan's loss guts Dimon's argument.
The bank claims that its trade was a hedge to protect it from possible losses on other investments. If that were the case, it might not come under the proposed rule. If, on the other hand, the loss were simply the result of a bad bet on some complex financial product, and was not a hedge, then it would come under the rule.