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Citigroup Inc. (NYSE:C) released a new report on JPMorgan Chase & Co. (NYSE:JPM) that said despite the firm’s recent $2 billion trading disaster, the stock is a buy as the company has lost $30 billion in market cap since the loss.  In addition, the sharp losses have given JPMorgan a 4% discount to its discount to tangible book which means that the company is very undervalued and could be a great long term investment.

Citigroup goes on to say that a lot of JP Morgan’s problems can be solved with more transparency.  For instance, no one knows the actual trade that JP Morgan made when they lost the $2 billion and the investment bank’s balance sheet has been said to be too opaque as well.

Ultimately, Citigroup believes that investors have been too hard on JPMorgan Chase & Co. (NYSE:JPM) to the point that the stock has taken a bigger beating than it deserves.  That is why Citi has given JP Morgan a $45 price target over the next year.

On the other hand, I don’t think it is that simple to just move past the trade and buy the stock.  There are a few things that I need to see happen before I consider JP Morgan.  Firstly, Dimon needs to be clearer with shareholders about this trade: What are the true losses looking like? What is the actual trade? How come is slipped through the cracks?

Next, what will be the government response to the JPMorgan Chase & Co. (NYSE:JPM) loss? We need to wait and see if the US government will be slapping on new regulations to the banking industry.  Speaker John Boehner recently said in an interview that US banking laws do not cover big, nontransparent trading.  This could be a sign that both parties may be behind more regulations on bank trades, as President Obama has already hinted at the need for new regulations.

That being said, I am a supporter of Jamie Dimon and I believe in his leadership abilities.  I also am a supporter of JP Morgan.  They are a solid investment bank that is fairly diversified and specializes in fixed income strategies.  Luckily, the multi-billion loss (although still growing) is only a fraction of its quarterly profits but it does show the company that there are some holes in their strategy that need to be worked out and patched up before they can move forward.

The best thing Jamie Dimon can do right now is be fully transparent with investors and the US government, then find out where their strategy failed and fix it.  There is still a good amount of questioned that need to be answered before investors can start to put this story away so until then, we will continue to see more and more on JPMorgan’s loss.