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Stuff JP Morgan bankers say: "There’s no hope. … The book continues to grow, more and more monstrous."

The London Whale report, digested.

JP Morgan is being investigated. Photograph: Getty Images

The first major investigation into the London Whale scandal is underway - JP Morgan has been accused of "lying to investigators" as losses escalated last year. The losses came from a synthetic credit portfolio - a series of wagers on credit derivatives - which grew rapidly to $6bn. According to the report, the downward spiral was evident by March, but CEO Jamie Dimon pretented it wasn't, calling it a "tempest in a teapot" in early April.

The report is here, (warning, it's over 300 pages). It gathers together a juicy selection of emails, telephone conversations and instant messages, which amount to an interesting reminder that, whether discussing libor-rigging or a trading-loss cover-up, whether at Barclays or JP Morgan, banker communications are all cut from the same cloth.

It charts their last-minute attempts to forstall the multi-billion dollar loss - which get increasingly burlesque:

I can’t keep this going, we do a one-off at the end of the month to remain calm. I think what he’s [Mr. Martin-Artajo’s] expecting is a remarking at the end of the month, you can’t do it unless it’s month-end. … I don’t know where he wants to stop, but it’s getting idiotic. … [N]ow it’s worse than before … there’s nothing that can be done, absolutely nothing that can be done, there’s no hope. … The book continues to grow, more and more monstrous.

At one point, bank executives "yell at" OCC examiners and call them "stupid":

When asked if the CIO’s aggressive reaction to the 2010 examination of the CIO was unique, the OCC indicated that it was not. In fact, the OCC Examiner-In-Charge at JPMorgan Chase told the Subcommittee that it was “very common” for the bank to push back on examiner findings and recommendations. He recalled one instance in which bank executives even yelled at OCC examiners and called them “stupid.” In another example, in early 2012, according to the OCC, the most junior capital markets OCC examiner arrived at a meeting at the bank to discuss with his bank counterpart the results of a recent OCC stress examination. But instead of meeting with a single risk manager, he was, in his words, “ambushed” by all the heads of risk divisions from all the lines of business at the bank, including JPMorgan Chase’s Chief Risk Officer, John Hogan. Given the senior rank of the bank officials, the junior OCC examiner normally would not have led the meeting, but the bank officials pressed him to disclose the OCC’s preliminary conclusions. According to the OCC examiner, on every issue, the bank’s risk personnel criticized the OCC’s findings and recommendations, and the meeting assumed a loud and “combative” tone.

The report details an email sent by Bruno "the London Whale" Iksil to Javier Martin-Artajo on 30th January in 2012, worrying about increasing losses from the bet. He said that it had become "scary". A second email to Martin-Artajo came from Achilles Macris, equally worried. He says that "the book doesn’t behave as intended”.

Nothing was sorted out, and in the weeks that followed, things got worse. On March 22nd, traders were told to stop trading, able to mask the losses by presenting them in a favourable light. However, the differences between these favourable valuations of the derivatives and the actual midpoint prices had by this point "increased to 300" (that's £300m), and traders found they had become unsustainable.

By the time Jamie Dillon made his teapot remark, the report found that he was “already in possession of information about the . . . complex and sizeable portfolio, its sustained losses for three straight months, the exponential increase in those losses during March and the difficulty of exiting the . . . positions”.

The Senate panel said that “the written and verbal representations made by the bank were incomplete, contained numerous inaccuracies, and misinformed investors, regulators, and the public”. The investigation continues.