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Started By
Message
JPMorgan Chase...uh oh!
Posted on 5/10/12 at 6:08 pm
Posted on 5/10/12 at 6:08 pm
4
Posted on 5/10/12 at 6:26 pm to CamdenTiger
I'm interested to see what kind of a retarded beta drag this causes to the rest of banking.
Posted on 5/10/12 at 6:37 pm to CamdenTiger
eta: Now I see another article talking about the London whale. So apparently when you take outsized positions in a relatively illiquid market, you might not be able to hedge as well as you thought. Mind blown.
This post was edited on 5/10/12 at 7:03 pm
Posted on 5/10/12 at 7:07 pm to TheHiddenFlask
I'm more curious to learn how a single trader was able to take such large positions without a stop loss control in effect. In addition to the trader, some internal control type has to be fired over this.
Posted on 5/10/12 at 7:10 pm to TheHiddenFlask
FAZ? Wish I would bought it today
Posted on 5/10/12 at 7:16 pm to LSURussian
We're talking about giant CDS contracts, I'm not sure a stop-loss control is going to be very effective there. eta: See here, possibly "tens of billions of dollars." LINK ][LINK] In the CDS market no less, its not like the bid-ask spread is .001 cents there.
This post was edited on 5/10/12 at 7:22 pm
Posted on 5/10/12 at 7:23 pm to kfizzle85
Definitely interesting.
Thanks for that article.
quote:
kfizzle85
Thanks for that article.
Posted on 5/10/12 at 7:59 pm to kfizzle85
Surely somebody at JPM did a VAR analysis before the volume of contracts swelled to an unmanageable size.
Or, maybe the risk people believed a $2 billion potential loss was within acceptable risk limits.
I tend to doubt that and have to believe the volume of contracts got away from them and then the fit hit the shan.
I'm not familiar with the corp debt index they are referencing but I suppose the recent slower US economic and employment numbers must have dropped it.
I hope more details about the CDS contract particulars emerge when the smoke clears.
Or, maybe the risk people believed a $2 billion potential loss was within acceptable risk limits.
I tend to doubt that and have to believe the volume of contracts got away from them and then the fit hit the shan.
I'm not familiar with the corp debt index they are referencing but I suppose the recent slower US economic and employment numbers must have dropped it.
I hope more details about the CDS contract particulars emerge when the smoke clears.
Posted on 5/10/12 at 8:00 pm to GoCrazyAuburn
Zerohedge from April 13, 2012
Why JPM's "Chief Investment Office" Is The World's Largest Prop Trading Desk: Fact And Fiction
0Hedge
Why JPM's "Chief Investment Office" Is The World's Largest Prop Trading Desk: Fact And Fiction
0Hedge
Posted on 5/10/12 at 8:06 pm to LSURussian
Yeah, that's why I initially said "not really enough information in that article." I think I'm geared now that when I read an article if I see "exotic financial investments" mentioned I just immediately disregard the article altogether.
Posted on 5/10/12 at 8:12 pm to kfizzle85
In any case, Dimon's image has suffered.
Posted on 5/10/12 at 8:13 pm to LSURussian
So Ruskie, looking into you crystal ball, do you think we are looking at a huge sell off like in 2008?
Or do you this is just a bump in the road?
Or do you this is just a bump in the road?
Posted on 5/10/12 at 8:24 pm to Reubaltaich
If you're referring to the stock market as a whole, my best guess is a pullback is due of maybe 5-10%.
if you're referring to JPM only, it will take a hit for a while until everyone is sure everything is out in the open. If the losses continue drip-drip-drip style, I can see JPM falling quite a bit, maybe 25%.
if you're referring to JPM only, it will take a hit for a while until everyone is sure everything is out in the open. If the losses continue drip-drip-drip style, I can see JPM falling quite a bit, maybe 25%.
This post was edited on 5/10/12 at 8:29 pm
Posted on 5/10/12 at 8:37 pm to LSURussian
I will be very surprised if this has any affect on the market outside of financials. IMO it is a pretty clear cut isolated event.
Posted on 5/10/12 at 8:42 pm to LSURussian
I was referring to the market as a whole.
I beleive my 401k has a small holding in JPM though.
I beleive my 401k has a small holding in JPM though.
Posted on 5/10/12 at 8:45 pm to kfizzle85
My guess about the market pulling back is not because of JPM. I just think a summer pullback is due.
Posted on 5/10/12 at 8:46 pm to Reubaltaich
quote:
I beleive my 401k has a small holding in JPM though.
Right this minute I wish I only had a small holding of JPM.
Posted on 5/10/12 at 9:02 pm to LSURussian
I have alot of Wells Fargo stock. Is this good news or bad news for me?
Posted on 5/10/12 at 9:05 pm to cjared036
WFC is down 2% in after hours trading.
Posted on 5/10/12 at 10:32 pm to CamdenTiger
quote:
the complex financial instruments known as derivatives
A good indication that the article is useless.
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