Would the Volcker Rule Have Prevented this?

JP Morgan is reporting a loss of $2 billion from its trading desk in the last six weeks and there is a likelihood of another billion going down the drain.  A month ago, the Wall Street Journal raised some questions about the types of trades that have led to this problem.  Dimon's response? "a complete tempest in a teapot."

Again, credit-default swaps gone wrong were the primary cause of the loss. Morgan's strategy of managing the risk attendant on these swaps in Morgan's words "has proven to be riskier, more volatile and less effective as an economic hedge than the firm previously believed."