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HomeJP Morgan: 9B Loss? Is That It? A Hedge? Really?
Posted by Larry Doyle on June 28th, 2012 7:34 AM |
On May 10th, JP Morgan CEO announced that the bank faced a $2 billion loss on a hedge that had gone awry in its Chief Investment Office.
Many analysts and commentators discounted the fact that for an institution of JP Morgan’s size a surprising $2 billion loss, while significant, was not overly significant.
Perhaps they were right. If a $2 billion loss is insignificant, then what about an $8-9 billion loss. Significant yet? (more…)
JP Morgan’s Five P’s and Bernie Madoff
Posted by Larry Doyle on June 27th, 2012 7:59 AM |
Have you ever had an experience while reading something when you stop and think, “They didn’t just say that, did they?” I had just such an experience yesterday while reading a Bloomberg commentary on JP Morgan.
Under the heading of “You cannot make this stuff up,” I virtually gagged when I read of why JP Morgan had chosen not to allocate credit to Chesapeake Energy. Given current issues with Chesapeake, it would appear that JP Morgan’s decision not to engage Chesapeake was prudent. Then why the gag? (more…)
Bloomberg Bombshells re: JP Morgan $2B Loss
Posted by Larry Doyle on May 14th, 2012 7:54 AM |
Bloomberg just reported a couple of bombshells which, when digested, strike right at the integrity and veracity of JP Morgan CEO Jamie Dimon’s comments a month ago.
What did Bloomberg report?
The JPM traders managing the risk within this portfolio were known to execute trades over the course of the last few days of the month. Why is that so interesting and important?
If the firm had such large and unwieldy positions, this end of month trading activity would likely be seen as an indication that JP Morgan was trying to influence the month end pricing valuations of the indices in question. Those pricing valuations would obviously directly correlate with reported profits and losses. (more…)
Who/What is Driving European Sovereign Spreads?
Posted by Larry Doyle on April 27th, 2012 9:11 AM |
The center of our global financial crisis squarely rests upon the Euro-zone in general and a number of peripheral sovereign states specifically. The movement in spreads within this market are often vicious.
The European Central Bank has thrown the kitchen sink in the form of its 3-year LTRO (long term refinancing operation) at the massive debt problem. The LTRO aside, do you get the sense that there is a far greater force at work behind the scenes driving these markets? I do. Who and what are really driving spreads within the Euro-zone?
Let’s navigate as the Journal of International Money and Finance addresses this critically important topic in its April 2012 issue. (more…)
Is JP Morgan Fronting for the Fed?
Posted by Larry Doyle on April 13th, 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… (more…)
Wall Street’s Meaningless ‘Mea Culpas’
Posted by Larry Doyle on May 18th, 2011 8:56 AM |
“I’m sorry. No, really I am. I did not mean to do it….er, I mean we did not mean to do it. I hope nobody got too badly hurt. Oh, sorry if you did. Really, I mean it and we mean it. I think we were well intentioned but things just got a little out of control. We will definitely try to make sure this stuff NEVER happens again…no, really. This time we definitely mean it. Will you still trust us? Please?”
Are you kidding me? Is “sorry” the best America gets for the ineptitude, incompetence, reckless and abusive behaviors of those on Wall Street and their regulatory overseers in Washington after driving our markets and economy over the cliff?
Who is issuing these meaningless mea culpas? (more…)
Did JP Morgan Aid and Abet Bernie Madoff? Time for Jamie Dimon ‘To Put Up or Shut Up’
Posted by Larry Doyle on February 4th, 2011 8:33 AM |
Just the facts.
A week ago at The World Economic Forum in Davos, Switzerland, Jamie Dimon, chief of JP Morgan, railed on the widespread vilification of bankers by the general public. The Wall Street Journal highlighted Dimon’s comment in writing, A Banker’s Plaintive Wail:
“A plaintive cry from one of the world’s top bankers on behalf of his industry pierced through an otherwise tame Thursday morning panel discussion here in Davos:
“I don’t lump all media together,” said Jamie Dimon, chief executive of J.P. Morgan Chase & Co. “There’s good and there’s bad. There’s irresponsible and ignorant and there’s really smart media. Well, not all bankers are the same. And I just think this constant refrain ‘bankers, bankers, bankers,’ — it’s just a really unproductive and unfair way of treating people. And I just think people should just stop doing that.”
Mr. Dimon argued that J.P. Morgan was one of the good banks..
On one hand, I agree with him. I have worked with many fabulous bankers throughout my career and count many of them as close personal friends. None of them actually run a major banking organization.
If Mr. Dimon wants to be distinguished as ‘one of the good guys’ and JP Morgan as ‘one of the good banks,’ he now has his opportunity to ‘put up or shut up.’ How so? Let’s reenter the world of Bernie Madoff. (more…)
How Did FINRA Know the ARS Market Was Failing Well Before 2007?
Posted by Larry Doyle on December 1st, 2010 10:24 PM |
If you knew a market were starting to fail, would you step in and purchase that asset?
If that market were failing, but simultaneously being propped up by underwriters, do you believe regulators should protect you?
If that market were failing and a regulator charged with protecting you actually dumped some of those failing assets from its own portfolio, how would you feel?
If you owned some of these securities, do you think you might be protected by the regulator? The government?
Let’s reenter the world of auction rate securities and continue to bang the drum for those investors in America who have been so badly mistreated by the financial industry, the regulators charged with protecting them, and our government.
Although I have written voluminously on the auction-rate securities market, I was never fully aware of when auctions started to fail. Until now. (more…)
The Real Issues Behind the Foreclosure Crisis
Posted by Larry Doyle on October 13th, 2010 12:32 PM |
What is really going on in regard to the moratorium on mortgage foreclosures? A lot. Not all of it would qualify as the best of “sense on cents.” My thoughts include the following:
1. Can we now declare the HAMP (Making Home Affordable) program to be totally futile? How is it that everybody on Wall Street and in Washington is now promoting that the economy will be harmed if we forestall the mortgage foreclosure process? What the hell have the wizards in Washington been doing via HAMP and through Freddie and Fannie for the last 18 months? The simple fact is our policy makers have done everything in their power to inhibit the markets from working. Now, all of a sudden, they become proponents of free market principles? Were we born yesterday? Not here at Sense on Cents.
I have continually harangued our Washington politicos for not allowing the housing market to clear, and highlighted how forestalling that process would only prolong our economic pain. We’re feeling that pain now and will be for the foreseeable future.
2. Where are we going with this moratorium? (more…)
JP Morgan Shuts Proprietary Trading
Posted by Larry Doyle on September 1st, 2010 5:11 AM |
Two weeks ago on an afternoon visit to New York City, I was struck by the changed tone, atmosphere, and demeanor during the meetings I had with a number of Wall Street professionals. The fact that the tone has changed does not necessarily mean that the industry as a whole is entirely chastened by the failings—if not worse—both going into and coming out of the crisis. Without deeply meaningful efforts and accompanying results to promote real transparency and increased disclosures, the industry will continue to fight to maintain ‘business as usual.’ It is an uphill battle.
Further evidence of this reality is provided today with the news that JP Morgan is shutting down its proprietary trading operations. Bloomberg reports, JP Morgan Said to End Proprietary Trading to Meet Volcker Rule:
JPMorgan Chase & Co. told traders who bet on commodities for the firm’s account that their unit will be closed as the company, the second-biggest U.S. bank by assets, starts to shut down all proprietary trading, according to a person briefed on the matter.
The bank eventually will close all in-house trading to comply with new U.S. curbs on investment banks, said the person, who asked not to be identified because New York-based JPMorgan’s decision hasn’t been made public. (more…)
