Bank Derivatives Back on Radar

With so much investor distrust in the air these days, it doesn't take much of a rumor to roil a stock.

When the stock is J.P. Morgan Chase(JPM Quote), the juiciest piece of meat you can throw around nowadays is any speculation concerning its massive derivatives trading and underwriting operation.

Just consider what happened last week to the nation's second-largest bank. Not only did it have to deal with the fallout from a high-profile congressional investigation into its business dealings with Enron, it also had to move forcefully to squelch persistent rumors on the Street that the bank was facing potentially huge losses on some of its derivatives transactions.

Quieted Down

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