Jamie Dimon just handed regulators and legislators one more reason to continue with the Volcker Rule. And it only cost him $2 billion.
The CEO of JPMorgan Chase had to call in a bet from one of his top traders - known as the London Whale - for a spectacular bet on credit default swap indexes that went terribly wrong. Not only is the current loss $2 billion but there could be further fallout of $1 billion if, as one commentator says, "the market does not cooperate."
This comes at a terrible time as Wall Street firms try to restore their image and make the case that they are responsible and trustworthy entities. After bringing the global market to near collapse in 2008, accepting taxpayer bailouts and rewarding themselves with bonuses for their brazen behavior, it's clear that very few lessons have been learned.
For every business and conservative commentator who calls the president an anti-capitalism socialist, it doesn't help your argument when you look like an out-of-control gambler betting the farm and the kids' college funds on a scheme that has everyone shaking their heads.
Read Heidi Moore's excellent primer on what went wrong at Dimon's gambling parlor.
JPMorgan and the rest of Wall Street had better hope that this bet doesn't trigger any blowback. And if they thought that their efforts to stop Dodd-Frank and the Volcker Rule were a no-brainer, think again. They clearly have a lot to learn.