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Is JP Morgan Fronting for the Fed?

Posted by Larry Doyle on April 13, 2012 9:09 AM |

UPDATE: This commentary written in mid-April 2012 should be read in conjunction with the following:

May 14th Review: Bloomberg Bombshells re: JP Morgan $2B Loss

May 12th review: $2B Loss? What Went Wrong at JP Morgan? 

May 11th review: JP Morgan Whale: “Thar She Blows”


Reports are swirling around Wall Street and the global markets about massive credit bets on the books at JP Morgan.

A JP Morgan trader in London, Bruno Iksil, has been nicknamed ‘the whale’. Iksil reports ultimately to Achilles Macris, JPM’s chief investment officer in Europe and Asia. Bloomberg had an interesting discussion this morning about Iksil, Macris, JPM, and these positions. Let’s watch and learn…

What do people think about JPM’s explosive growth in these credit exposures? Merely taking advantage of a Fed which is clearly making sure markets remain propped? Taking advantage of the oligopoly that currently defines Wall Street?

Might people believe that the strongest bank in the world is actually working in concert with, if not actually fronting for, the Federal Reserve to keep credit spreads down in an attempt to spur growth in the economy?

Seems like a very logical assessment to me, and one fully consistent with markets that are heavily managed if not outright manipulated. From JP Morgan’s standpoint, I guess “It’s good to be the king!”

What do others think?

Larry Doyle

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I have no affiliation or business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

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