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From full global headquarters, this is Motley Fool Money.

Welcome to Motley Fool Money. Thanks for being here. I'm your host, Chris Hill, and joining me in studio this week from Motley Fool Inside Value,

Joe Mager from Motley Fool Income Investor, James Early, and from Million Dollar Portfolio, Ron Gross, gentlemen, good to see you.

Hello, Chris. We have got a big deal brewing in the cosmetics industry. We've got big earnings from Disney, but we begin this week with a big loss from a big bank.

JP Morgan Chase announced it lost two billion on a massive trading bet that went south.

In a conference call on Thursday evening, CEO Jamie Diamond said the bank strategy was, quote,

flawed, complex, poorly reviewed, poorly executed, and poorly monitored. Other than that, James Early, it sounds like everything just went fine.

I'm searching for analogy. Maybe it's something like somebody who just got his license back after a DWI getting caught with an open bottle in the car.

It was only last year that Jamie Diamond was criticizing the Volcker rule, saying it would impinge on bank's ability to trade derivatives.

And we certainly wish it would have impinged on JP Morgan's ability here, because this was a huge loss for a single trade.

For a big bank, it's not a massively financially significant number, and I'll say this is a marked market loss. In other words, it's not a cash loss, but it also means that it could still get worse. The position is still on.

Yeah, I'd like to know a little bit more as we get more information. Was this about proprietary trading, or is it as what they say it is?

It was really about a hedging strategy to help offset other aspects of their business, which is a perfectly rational thing to do.

However, was it not monitored as you said correctly? Was it ill devised the strategy? Where are the parents here watching what the children are doing?

Joe Mager, the Wall Street Journal called this the rare black eye for Jamie Diamond. You actually listened in on the conference call.

What did you think?

I did. He sounded furious. He was absolutely upset that the company had made the mistake. He was upset with his employees.

He sounded upset and disappointed with himself for not having better controls around that. But I do think that this is a one-time incident, and the market definitely isn't responding that way.

The stock is off like 8%. You know, where there's smoke, there's fire, and that's something that we've had pounded into our heads with financial stocks over the last few years.

But at the same time, these guys do have great track record, and I think it's important to remember that Jamie Diamond and JP Morgan have done an excellent job of managing themselves through the financial crisis, and do deserve some benefit of the doubt.

James, I'll just add two things for perspective here. If you're listening wondering, this sounds kind of complicated. First of all, JP Morgan is sort of like the godfather of derivatives, of all the big banks.

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