JPMorgan's writedowns this week were modest compared to Merrill Lynch's, and to Citigroup's expected toxic bundle. Why is the bank trying to raise another $6bn then?
JPMorgan's $5.1bn of writedowns look positively pretty by comparison.
But if JP is sitting so sweetly, why did the bank wait until after its results release, and after the conference call, to announce plans to raise another $6bn in what Bloomberg describes as its "biggest offering of perpetual preferred stock" at a punitive fixed rate of 7.9% for 10 years?
Alphaville thinks it might just be Jamie trying to bolster his tier-one capital ratio in case of a hard landing.
But the naked capitalist points out that JPMorgan is a leading CDS dealer and therefore exposed to huge OTC derivatives positions which may yet turn horribly sour - "Think of it this way: JPM is essentially an uncapitalised, $76 trillion OTC derivatives exchange, with a $1.3 trillion asset bank appendage."
Under this rationale, Dimon had to take on Bear Stearns simply to head off huge losses from its OTC business if Bear went under.
And it might yet face an even bigger headache if the ever expanding CDS market is hit by mass hedge fund liquidations as the crunch continues.
Is Dimon's smile about to turn into a grimace? Or he just looking for a little something for a rainy day? Let us know what you know below.