Unwinding with an invisibility cloak

JPMorgan is continuing to be coy about the management of its Chief Investment Office’s doomed synthetic credit portfolio. The positions lost $4.4bn in the second quarter, bringing the year-to-date loss to $5.8bn. It’s understandable that they don’t want to share more granular details — doing so would put them at a disadvantage in trying to manage the whole thing down.

We know the financial instruments in the portfolio themselves were nothing special. It’s that the whole portfolio of them became too complex and illiquid, in part due to their enormous size.