JPMorgan CEO Dimon testifying before Congress this week

Wall Street shrugs off firm's big losses

Losses Happen

“There is no law that says you can’t lose money,” said H. Frederick Krimendahl II, chairman of New York-based real estate investor Petrus Partners Ltd. and a former Goldman Sachs management-committee member. “The reason that I shrug is that I don’t think anybody got badly hurt in this” except JPMorgan.

Schwarzman, the Blackstone chief, said losses can’t be prevented “by legislation, regulation, supervision or other forms of planning.”

Dismissiveness is dangerous, according to Simon Johnson, a former International Monetary Fund chief economist who teaches at the Massachusetts Institute of Technology.

“Complacency was at the heart of the problems that almost brought down the system,” he said. “No one considered that there was a serious problem.”

Analysts who’ve expressed concern include Chris Wheeler at Mediobanca SpA, the Milan-based investment bank, which downgraded JPMorgan to neutral on June 6. Bank analysts tend to be positive about the industry because they work in it, said Wheeler, who co-wrote the Mediobanca report.

“I’m not screaming from the hilltops that Jamie Dimon has major problems,” he said. “But, in this particular case, something went very badly wrong.”

Bloomberg News

--Editors: Rick Green, Robert Friedman, Peter Eichenbaum

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