It's been just over a week since JPMorgan Chase disclosed that disastrous multi-billion trading loss in the bank's chief investment office in London related to derivatives trades. 

Today the Wall Street Journal's Monica Langley is out with an amazing report disclosing new details about the happenings in the upper echelons of JPMorgan before it was made public. 

During an April 30th meeting, the bank's chief executive Jamie Dimon first learned about the magnitude of the losses when he demanded to see the specific positions. 

When he saw the positions he couldn't breathe and it made him feel queasy, according to the WSJ report citing sources familiar with the matter.

What's more is Dimon, who had a reputation for being one of the best risk managers, couldn't sleep very well the nights following that meeting.

The report said would wake up very early and exercise in an effort to fight off anxiety and tried to maintain a business-as-usual appearance while at the office.  

Read the full report here >

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When Jamie Dimon First Saw The Horrible Trading Positions, He Couldn’t Breathe And Started Getting Sick

Details continue to emerge regarding JP Morgan's shocking multi-billion trading losses.

However, the biggest behind-the-scenes report so far was just published by The Wall Street Journal and written by Monica Langley.

Here's how Dimon first found out about the losses:

On April 30, associates who were gathered in a conference room handed Mr. Dimon summaries and analyses of the losses. But there were no details about the trades themselves. "I want to see the positions!" he barked, throwing down the papers, according to attendees. "Now! I want to see everything!"

When Mr. Dimon saw the numbers, these people say, he couldn't breathe.

Here's the loss estimate the Langley reports:

Those trading positions have produced losses that could total as much as $5 billion...

Langley's sources appear to be very close to Dimon.  Her story includes an exchange between Dimon and his wife and also references an evening fueled by vodka.

More on those trades:

Mr. Dimon personally approved the concept behind the disastrous trades, according to people familiar with the matter. But he didn't monitor how they were executed, triggering some resentment among other business chiefs who say the activities of their units are routinely and vigorously scrutinized.

Langley's report includes a play-by-play of the drama that ensued after Dimon found out about the losses.

Read the whole article at WSJ.com.

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BOMBSHELL REPORT: Jamie Dimon Personally Approved The Concept Of The Disastrous Trade, Losses Could Total $5 Billion

Eric Kelly at Church Street Boxing Gym has a special method to training his students—constant degradation.

In a video interview with Animal New York, Kelly walks through his gym cursing and mocking all this trainees—many of whom are Wall Streeters. [h/t Gawker]

"I'm training a bunch of f**king nerds, Wall Street guys, no coordination, they're just not athletic people," he says, calling the guys "pieces of sh*t [that] want to come in and feel like men at the end of the day."

Kelly, who is a 4-time amateur boxing champion and once almost made it to the Olympics, is relentless in ridiculing the Wall Street guys he trains, but says he does it to make them stronger.

"You look like all the nerds just had a convention on your body," he says to one guy wearing high socks and glasses.

Watch the hilarious video below, note that there is a ton of profanity, so please remember to plug in your headphones.

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Watch This Boxing Coach Talk About How Much The Wall Street Nerds At His Gym Suck

Bad news for all the steak lovers.

Ben Benson's Steak House, a restaurant frequented by Wall Streeters, will be closing its doors next month, the Wall Street Journal reported.

Ben Benson's has been a staple of the Midtown West area for nearly 30 years, and was also voted one of Clusterstock readers' favorite steakhouses to go for a simple, no-frills meal.

Ben Benson, the owner, said he is closing the restaurant because the landlord, Paramount Group, wouldn't renew his lease, according to the WSJ. Benson also said he could not afford an increase in the restaurant's rent with the economic downturn, coupled with the increase in beef prices. 

But there may be some hope for those who can't part from Benson's steak house—he said there is a 50% chance he may open the restaurant at a new location somewhere in Midtown. We have our fingers crossed!

The steakhouse will serve its last meal on Father's Day, June 17.

SEE ALSO: The Best Places To Get A Steak For Wall Street

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One Of Wall Street’s Favorite Steakhouses Is Closing Down Due Soaring Rent And Beef Prices

For years, Overstock.com has been in a legal battle with Goldman Sachs, Bank of America, Merrill Lynch and more. The online retailer accuses the banks of naked short-selling its stock.

Overstock.com lost that battle, but they're still trying to get the banks to unseal documents that would prove their case.

According to Rolling Stone's Matt Taibbi, who posted the Plaintiff's motion on his blog, his publication, as well as The Economist, Bloomberg, and the New York Times, have been fighting to see the documents too. 

Fighting the banks is not easy, we know, but then recently, something magic happened. The Defendants' law firm, Morgan Lewis, committed a colossal screw up. During the discovery period, they neglected to redact sensitive e-mails from their clients. Then they sent them off to Overstock.com's legal team.

Morgan Lewis could not be reached for comment.

Overstock.com put excerpts of these e-mails in its motion to oppose the banks' motion to seal documents from the case. The online retailer alleges that these documents prove that the banks were not only engaged in short selling, but also leaking short positions (including Overstock.com) to hedge fund clients.

When Taibbi e-mailed Goldman about the allegation that the banks were leaking short positions, their response was as follows:

Among other services it provides, Securities Lending at Goldman provides market color information to clients regarding various activity in the securities lending marketplace on a security specific or sector specific basis. In accordance with the group's guidelines concerning the provision of market color, Mr. Masterson provided a client with certain aggregate information regarding short balances in certain securities. The information did not contain reference to any particular clients' short positions.

That shouldn't be very comforting to smaller clients.

And neither should these unredacted documents, because they're embarrassing. There's one e-mail a Merrill exec sent to his secretary that reads, "I have a meeting at 2 with Tom T, tell him I want an update on how we're going to fix fails and make 369 market makers fail."

Or there's the one where a Merrill President e-mailed "F*ck the compliance area, procedures schemcedures."

Overstock.com's motion says that, in many instances, bankers referred to the stock as the "enemy" and planned on "neutralizing" and "failing" the stock. They also explicitly told their clients they would allow them to do the same.

So what is failing the stock?

Briefly: Naked short selling (also known as 'failing' a stock) is super illegal. It's the practice of shorting a stock you've never actually borrowed. As you know, short-sellers pay to borrow stocks and then sell them back when the price drops. That's how they make a profit. If there's not enough supply to borrow a stock, or the borrowing is too expensive (like, 35% in some cases) the short won't work.

An expensive stock to borrow is called a negative rebate stock, and that is what Overstock.com allegedly was.

That's why it's especially bad that in Overstock.com's motion, one Merrill exec e-mails: "We are NOT borrowing negatives... I have made that clear from the beginning. Why would we want to borrow them? We want to fail them..."

Back to naked short-selling. When you don't actually locate a stock to borrow it, the short is "not a genuine expression of genuine market sentiment," says Overstock.com's motion. This act manipulates the market, creating false supply and depressing the value of the stock.

In Overstock.com's, case, they allege that fails created six times the supply of Overstock.com stock in 2005 and 2006.

One Goldman e-mail acknowledged that a lot of Overstock.com's increasing stocks were "trading at negative rebate with non-paying customers," according to Overstock.com's motion. The exact definition of a naked short.

We cannot wait to see what the Judge has to say in response to this tiff. Until then, check out  excerpts from Overstock.com's motion below.

"F*ck compliance", allowing clients to fail stocks, and recognition of illegality:

 Not borrowing stocks for shorts, fixing fails:

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INCREDIBLE: Lawyers For The Major Banks Accidentally Leaked E-mails About Their Clients Naked Short-Selling Overstock.com

David Shankbone is arguably one of the coolest guys working on Wall Street.

While he's not a high-flying financier—he actually works in the legal department of a financial firm—he's an adventurer whose life has been shaped by his own choices and made him an influential figure in the digital age.

In the past, Shankbone has motorbiked across Cuba and Portugal, gone camping in the Amazon and gotten lost in Morocco.

And since 2006, he has also been one of the most prominent contributors to Wikinews, an offshoot of the collaborative, online database Wikipedia.

His photo subjects vary and include political figures and starlets like Blake Lively and Lea Michele and iconic sports figures like LeBron James and Yu-Na Kim. But they also include burlesque dancers, transvestites and a series of photo sets on Israel.

Click here to see those photos >

With that contribution and generosity, Shankbone has become one of the most influential new media journalists because of the sheer spread of his work (which is free to use). His photos have appeared in over 5,000 Wikipedia articles and in publications like the New Yorker, Vanity Fair and the New York Times.

Shankbone is actually a pseudonym—his name real name is David Miller. He told the CJR that he chose Shankbone because of "its masculine, slightly pornographic ring," plus, it's excellent for search engine optimization!

How cool is that?

We've complied some of Shankbone's celebrity photos for your viewing pleasure.

His portfolio is full of celebrity photos like the Olsen sisters...

Blake Lively...

and Kim Kardashian.

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This Wall Street Guy Is One Of The Top Celebrity Photographers In The World

In case you missed the creative, cutesy invite to the Robin Hood Foundation Gala yesterday, it had an awesome New York subway theme. 

The foundation, which raises money to support New York City charities, used the subway motif of its symbolic meaning as a connection throughout the City.

So naturally, Bloomberg arts/culture reporter Amanda Gordon asked some of the attendees at the gala about their experiences with subways. Luckily for us, those attendees included Goldman Sachs CEO Lloyd Blankfein and hedge fund manager Bill Ackman.

“I rode the New Lots Avenue subway as a kid," Blankfein told Gordon.

Blankfein had a very modest upbringing, and grew up in Brooklyn, where he shared a bedroom with his grandmother. Nowadays, he resides at 15 Central Park West... so we're not sure how often he takes the subway.

On the other hand, we know that Bill Ackman is still an avid subway rider—thanks to a photo that was snapped of the activist investor on the train a month ago.

And sure enough, Ackman told Gordan he took the R train to the gala at the Javits Center on the West Side.

Read the full Bloomberg report here >

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Now We Know Which Subways Bill Ackman And Lloyd Blankfein Like To Ride

Societies become more complex as they age. Each challenge…or opportunity…is met with a new rig of some sort. A tax. A regulation. An organizational fix.

As time goes by, these fixes act like friction…they slow the machine. They make it hard to move…inflexible and unresponsive. And over time, more people gain access to a fix — each lobbying group and special interest, each with his own bailout or subsidy…and each desperate to hold onto it.

Output is thus shifted to unproductive activities. The real producers are punished — with taxes and regulations — while unproductive activities are rewarded, with bailouts, handouts and sweetheart deals.

The financial industry was 2.5% of the economy when WWII ended. Now, it is 8.5%. How did it get so big? What does it do for all the money?

The answer to the first question is that it grew as the economy became ‘financialized.’ More and more laws were passed granting more and more special favors and protections to the financial industry. Just read the tax code. Go ahead, we dare you! You will find special allowances and deals for the insurance industry on almost every page. And there are rules and regulations for pension funds. And pensions themselves. ERISA. 401k. 501C3. SEC. FDIC. Dodd-Frank. CFPB. Everything is regulated…controlled…protected…

And all of this happened on the back of the biggest expansion of financial instruments in world history. The feds transformed the economy from one that made things…at a profit…to one that just made money. The money supply in the US increased by 1,300% in the 40 years after Richard Nixon ‘shut the gold window’ at the Treasury. That ‘wealth’ did not take the form of new factories in New England or new tractors in the Old South. It went mostly into money instruments…funneled through the financial industry to the rich people who owned financial assets.

Every potential new competitor had to comply with such a mountain of rules and regulations that he quickly gave up. Even if approved, he could not hope to provide a new product. Instead, he could only provide the same approved services and products that the big, entrenched players already had in stock.

John Kay, writing in The Financial Times, explains what would have happened had the computer industry been tied in the same knots.

“If you needed a licence to enter the US computer business, you can imagine the Computer Regulation Agency interviewing Bill Gates and Steve Jobs in the 1970s. What dutiful regulator would allow someone who had not even completed his Harvard degree to sell software to the public?”

Protected. Coddled. The financial industry went rogue. It was supposed to match investors with worthy investments, helping to bring genuine growth and prosperity to the US. Instead, it matched up most of the new money with itself.

The typical American was impoverished. Forty years after America’s money went rogue, he has not a dime’s more earning power per hour. And 4.5 times more debt, adjusted for inflation.

Regards,

Bill Bonner,
for The Daily Reckoning

The Suspicious Growth of the Financial Industry originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas. Recently Agora Financial released a video titled "What Causes Gas Price to Increase?".

Read more posts on The Daily Reckoning »

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The Suspicious Growth Of The Financial Industry

President Barack Obama is chiming in on JP Morgan's shocking $2 billion trading loss.

Here are some released quotes from Obama's pre-taped appearance on ABC's The View.

“JPMorgan is one of the best-managed banks there is. Jamie Dimon, the head of it, is one of the smartest bankers we got and they still lost $2 billion and counting,” the president said. “We don’t know all the details. It’s going to be investigated, but this is why we passed Wall Street reform.”
...
“This is the best, or one of the best-managed banks. You could have a bank that isn’t as strong, isn’t as profitable making those same bets and we might have had to step in,” Obama said.  “That’s exactly why Wall Street reform’s so important.”

This episode of The View will air on Tuesday morning.

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OBAMA: JP Morgan Is One Of The Best-Managed Banks There Is And They STILL Lost $2 Billion

JPMorgan Chase's chief executive's spokesman just sold his gorgeous West Village townhouse for $6.7 million, Bloomberg News reports. 

Joseph Evangelisti, who is the head of global media relations, purchased the four-story, five-bedroom home on 18 Grove Street back in 2005 for $4.7 million, the report said. 

When he put it on the market in November 2008 with an asking price of $7.9 million that's when the recession began.  

And more than three years later it has finally sold.

Here's a description from Prudential Douglas Elliman Real Estate: 

Splendid 4 Story Townhouse on the corner of Grove & Bedford Streets in the West Village. This Lovely Townhouse is filled with Sunlight from 3 exposures & many windows. The Large Elegant Living Room has a very European feel & a working fireplace. The South facing Walled Garden Courtyard has views of large trees in famous Grove Court & the potential for private parking due to a rare curb-cut . There are 4 sunny bedrooms & 4 bathrooms presently & a new Kitchen. Fantastic Views from the roof where you can see the Empire State Bldg. There is a separate Garden Apartment that can be used for income or great for a Nanny

It definitely sounds like a dream home and now we're going to take photo tour. 

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Jamie Dimon’s Top Spokesman Just Sold His Gorgeous West Village Townhouse For $6.7 Million