In a special conference call this evening Jamie Dimon, CEO of JPMorgan disclosed a "trading loss" of at least $2 billion from a failed hedging strategy.

The strategy "morphed over time" and it was "ineffective, poorly monitored, poorly constructed and all of that," said Dimon.

Last month, he denied there were any problems, most likely hoping they would go away or he could cover them up. Instead, Dimon went to the confessional.

Bloomberg has additional details in JPMorgan has trading loss of at least $2 billion, reputation hit.

The April Wall Street Journal report said a trader in JPMorgan's Chief Investment Office, nicknamed the 'London Whale' had amassed an outsized position that had caused hedge funds to bet against his position. In the bank's earnings conference call in April, Dimon called the concern "a complete tempest in a teapot."

Regulators and lawmakers are now likely to push Dimon for more details about the trades. Those details will guide how regulators now view the issue and its impact on the Volcker rule, said Karen Petrou, managing partner of Washington-based Federal Financial Analytics.

Reflections on the Volcker Rule

Interestingly, Dimon says this should not be an excuse to implement the Volcker Rule (a ban on proprietary trading). The problem, he said, was with the execution of the hedging strategy.

That's his opinion. Here's mine.

I believe banks should be banks and not hedge funds. I believe "too big to fail" means too big period. And finally I believe this should cost Dimon and the entire board their jobs.

That said, if we would just end fractional reserve lending and the mammoth leverage it allows (and end FDIC insurance right along with it), we would not be discussing this kind of monumental greed coupled with monumental stupidity in the first place.