Now that the smoke is clearing, we’re finally getting a sense of what was happening as JP Morgan scrambled to unwind the $2 billion trading lost discovered in its London Chief Investment Office.CNBC’s Kate Kelly just reported that Andrew Feldstein, the head of Blue Mountain Capital— the hedge fund that bet against, and then helped JP Morgan unwind their trade, has spoken out about what happened.
That means we finally have some numbers. Here’s the rundown:
- 25% of Blue Mountain Capital’s performance year-to-date was part of the Whale trade.
- The hedge fund is also up 10% year-to-date.
- This spring, Blue Mountain Capital as much as $50 billion worth of trades with JP Morgan. They helped unwind the trade by going long corporate risk.
Feldstein also had something to say about what the loss means in relation to the scandal of the moment — LIBOR manipulation (from CNBC):
“LIBOR is orders of magnitude more significant than some dumb trades that halved the quarterly profits of an otherwise robust bank. Unlike JPM’s error of judgement, LIBOR manipulation is an error in principle. Estimates of the contracts and obligations impacted range from $500 to $800 trillion.”
So there. Get over it.