With such strong language from Dimon -- which is, of course, a large part of his appeal to investors -- some turmoil seems likely, including some high-profile management changes, but this event could be a blessing in disguise, as the company works even harder on its hedging strategies and risk management. 7 Dividend Stocks You Can't Ignore Right Now >> Friday was a volatile day for the banking sector, with the KBW Bank Index ( I:BKX) recovering from its earlier decline of more than 2%, to close at 46.40, for a decline of just over 1%, with all but seven of the 24 index components showing declines. The political reaction to the disclosure is also likely to continue, possibly with additional legislation introduced in Congress. Senator Carl Levin (D-Mich.) wasted no time in reacting to JPMorgan's announcement, saying in a statement late Thursday that "the enormous loss JP Morgan announced today is just the latest evidence that what banks call 'hedges' are often risky bets that so-called 'too big to fail' banks have no business making," and that "today's announcement is a stark reminder of the need for regulators to establish tough, effective standards to implement the Merkley-Levin language to protect taxpayers from having to cover such high-risk bets." Somehow, it seems quite unlikely that taxpayers will be covering any of JPMorgan Chase's hedging "bets," and the good senator may have forgotten that JPMorgan Chase repaid the $15 billion in government bailout funds received through the Troubled Assets Relief Program in June 2009, having paid the government (and U.S. taxpayers) over $795 million in dividends. Similar to the Volcker Rule, the Merkley-Levin Amendment would ban "bank holding companies, and their affiliates and subsidiaries from engaging in high risk speculation involving any stock, bond, option, commodity, derivative, or other security or financial instrument," according to the website of Senator Jeff Merkley (D-Ore.). Like the Volker Rule, implementation of the Merkley-Levin language would be difficult for the Federal Reserve and other bank regulators, because of the challenge to differentiate between "trading," hedging activities and market-making activities on behalf of clients. Friday's volatility of course presents many opportunities for day traders, but also a golden opportunity for long-term investors. Guggenheim Securities analyst Marty Mosby left his "Buy" rating for JPMorgan Chase unchanged, saying in a report on Friday morning that since his firm estimates "JPM should earn around $5 billion each quarter this year, we believe this event could create earnings volatility, but it is not large enough to be a capital event," adding that Guggenheim does "not expect capital positions to erode from current levels, rather, this event would only slow the improvement." Mosby also said that "one of the characteristics of a money center bank is volatility, which is why JPM has the lowest P/E to our 2013 estimate at 6.9x while the median for our large cap banks is 9.3x." Guggenheim estimates that JPMorgan Chase will earn $4.96 a share this year, followed by 2013 EPS of $5.68. Mosby's price target for the shares is $53.00. Sterne Agee analyst Todd Hagerman on Friday reiterated his neutral rating on JPMorgan Chase, with a price target of $50, saying that "the timing and magnitude of the announcement are certainly poor, given the intensity of the current regulatory debate surrounding proprietary trading (Volker) and the negative optics surrounding the outsized use of synthetic derivatives to hedge credit risk across the organization." But the analyst also said that "the company's $12B share repurchase authorization gives JPM significant flexibility to deploy capital and buy back shares in the event of outsized price weakness - providing an implicit floor for the stock," of $34.19, or Hagerman's estimated tangible book value for the shares. JPMorgan's board of directors in March authorized $12 billion in share repurchases for 2012, with another $3 billion in buybacks authorized for the first quarter of 2013. -- Written by Philip van Doorn in Jupiter, Fla. To contact the writer, click here: Philip van Doorn. To follow the writer on Twitter, go to http://twitter.com/PhilipvanDoorn.