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(Original story by Peter Coy at Bloomberg BusinessWeek...)

"JPMorgan Chase’s $2 billion loss on a derivatives bet gone bad says one thing clearly: Paul Volcker isn’t so dumb after all.

JPMorgan (JPM) Chief Executive Officer Jamie Dimon went out on a limb in saying that he knew more about financial markets than Volcker, the former Federal Reserve chairman who championed the rule restricting banks’ trading risks.

“Paul Volcker by his own admission has said he doesn’t understand capital markets,” Dimon told Fox Business earlier this year. “He has proven that to me.”

Now it’s Dimon who looks like he doesn’t understand capital markets. Bloomberg News is reporting today that the loss occurred after traders in the London-based chief investment office changed a key betting strategy. Dimon wasn’t immediately told about their shift in strategy and didn’t know the magnitude of the losses until after the company reported earnings April 13, an executive told Bloomberg..."


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