JPMorgan Chase & Co.’s chief executive officer, Jamie Dimon, initially called the bank’s “London whale” trading debacle a “tempest in a teapot.” Some teapot. Today the bank agreed to pay $100 million to settle an action brought by the Commodity Futures Trading Commission. But more important than that relatively modest sum is the bank’s admission that its traders were “recklessly aggressive.”
Bill Gross, manager of the world’s biggest mutual fund, sought to reassure clients that he hasn’t lost his touch after he misjudged the extent of the economic slowdown, causing his Pimco Total Return Fund to trail rivals this year.
Morgan Stanley, the most bearish among the 18 primary dealers that trade government securities with the Federal Reserve, acknowledged that its forecast that Treasury yields would rise this year was misguided.
Since the 2008 financial crisis, governments have experimented with just about every possible combination of fiscal and monetary policy. Some have pursued expansionary programs by borrowing heavily, cutting taxes and increasing spending. Others have gone the sackcloth-and-ashes route -- or were forced to -- by slashing spending and raising taxes. And some, the U.S. and the euro area included, have lurched from one strategy to another.