WHITFIELD: JPMorgan Chase comes clean saying it lost $2 billion in risky trades. Now it's dealing with the aftershocks. Its credit rating is taking a hit. Hala Gorani breaks down what happened and the fallout.</s>HALA GORANI, CNN CORRESPONDENT (voice-over): How did JPMorgan, the largest U.S. bank by assets, lose $2 billion in six weeks? Bank officials aren't releasing details yet but it appears the loss is tied to a series of risky bets in the derivatives market specifically credit default swaps. The bank bet the market would go in one direction. Instead, it went in another.</s>KATY BURNE, REPORTER, DOW JONES: Now we're looking at, you know, $2 billion paper trading loss, actually slightly over $2 billion, more like $2.3 billion. Who knows what the rest of the year will hold. But so far it's a gravy train for hedge funds.</s>GORANI: Katy Burne first wrote about this in the "Wall Street Journal" last month. The Journal" says the JPMorgan trader, dubbed the London whale, had taken a large position in the credit default swap market this. Only this time the swaps were tied to corporate bonds instead of home mortgages that caused the 2008 crisis. Regulators say this is further proof that banks have no business making these kinds of risky, multi-billion dollar bets.</s>BURNE: Definitely brings back memories of the crisis. And this is the sort of thing that Jamie Dimond and all the</s>GORANI: Hala Gorani, CNN, Atlanta.
Risky Trades Cost JPMorgan Chase