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kfizzle85 
LSU Fan
Houston
Member since Dec 2005
19845 posts
| re: Should Jamie Dimon Resign? (Posted on 5/11/12 at 2:43 pm to MStant1)
Word I hear you man, just thinking out loud in reading your post.
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LSURussian
LSU Fan
Baton Rouge
Member since Feb 2005
63208 posts
| re: Should Jamie Dimon Resign? (Posted on 5/11/12 at 3:29 pm to MStant1)
Congress overspends the federal budget by 5,000 billion dollars in 3 1/2 years. No worries.
A bank loses 2 billion dollars on an investment position (but will still make a couple billion dollars profit for the quarter) and we need congressional hearings on it.
Go figure.....
This post was edited on 5/11 at 3:31 pm
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TheHiddenFlask 
Clemson Fan
The Welsh red light district
Member since Jul 2008
16383 posts
| re: Should Jamie Dimon Resign? (Posted on 5/11/12 at 3:35 pm to LSURussian)
quote:
Congress overspends the federal budget by 5,000 billion dollars in 3 1/2 years. No worries.
A bank loses 2 billion dollars on an investment position (but will still make a couple billion dollars profit for the quarter) and we need congressional hearings on it.
Go figure.....
Sig worthy.
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LSU0358
LSU Fan
Member since Jan 2005
4584 posts
| re: Should Jamie Dimon Resign? (Posted on 5/11/12 at 4:10 pm to LSURussian)
quote:
I think the big banks may be too big to manage.
I agree with this. I think the bigger a financial institution is, the smaller the amount of leverage they can reasonably handle/keep track of.
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kfizzle85
LSU Fan
Houston
Member since Dec 2005
19845 posts
| re: Should Jamie Dimon Resign? (Posted on 5/11/12 at 4:16 pm to LSU0358)
I don't think its quite that linear, but there's some point where the curve kinks and it gets unwieldy IMO. I don't run a bank so I can't tell you where it is, but I would be willing to go out on a limb and say that its on the lower side of the 2T in assets mark.
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LSU0358
LSU Fan
Member since Jan 2005
4584 posts
| re: Should Jamie Dimon Resign? (Posted on 5/11/12 at 6:23 pm to kfizzle85)
I wouldn't say linear either. I wouldnt even put a money amount on it. The money amount will vary market to market. The trader was simply over leveraged in the particular market he was in and got caught with his pants down. The deal with the too big to fail guys is they have more individual departments than the management team can keep track of. I think this was the case with Chase.
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GumboPot
LSU Fan
Saints Fan
Member since Mar 2009
17383 posts
| re: Should Jamie Dimon Resign? (Posted on 5/11/12 at 9:44 pm to LSURussian)
quote:
A bank loses 2 billion dollars on an investment position
Since JPM lost 2 billion on this trade can we assume that someone profited on the other side of the trade? And as much bashing as JPM is getting from the politicians, shouldn't the politicians be praising the winners? The point is, this should be little if any of congress's business. 
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NC_Tigah
LSU Fan
Member since Sep 2003
40137 posts
| re: Should Jamie Dimon Resign? (Posted on 5/12/12 at 6:11 am to MStant1)
quote:
Should Jamie Dimon Resign?
No.
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kfizzle85
LSU Fan
Houston
Member since Dec 2005
19845 posts
| re: Should Jamie Dimon Resign? (Posted on 5/12/12 at 10:38 am to LSU0358)
I think we are talking about different things.
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MStant1
LSU Fan
New York, NY
Member since Sep 2010
4056 posts
| re: Should Jamie Dimon Resign? (Posted on 5/12/12 at 10:42 am to NC_Tigah)
quote:
NC_Tigah
I was kinda waiting to see if there was anyone out there who though he should. I guess their only reason could be if they truly thought it was prop trading and would have violated the Volker Rule.
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LSURussian
LSU Fan
Baton Rouge
Member since Feb 2005
63208 posts
| re: Should Jamie Dimon Resign? (Posted on 5/12/12 at 11:22 am to MStant1)
As I understand it, the Volcker Rule does not go into effect until 2014 (maybe 2015?).
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NC_Tigah
LSU Fan
Member since Sep 2003
40137 posts
| re: Should Jamie Dimon Resign? (Posted on 5/12/12 at 11:29 am to MStant1)
quote:
I was kinda waiting to see if there was anyone out there who though he should. I guess their only reason could be if they truly thought it was prop trading and would have violated the Volker Rule.
Oh I'd imagine 3 or 4 JPM upper levels will be facing a career redirection
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MStant1
LSU Fan
New York, NY
Member since Sep 2010
4056 posts
| re: Should Jamie Dimon Resign? (Posted on 5/12/12 at 11:45 am to LSURussian)
quote:
As I understand it, the Volcker Rule does not go into effect until 2014 (maybe 2015?).
The Volcker Rule takes effect this July, but banks have until July 2014 to fully wind down all the activities not allowed by the rule. However, the 2014 date will probably be pushed back a year or two.
I didn't make myself clear though. I meant more whether they would have been in violation of Volcker if it were already in effect.
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MStant1
LSU Fan
New York, NY
Member since Sep 2010
4056 posts
| re: Should Jamie Dimon Resign? (Posted on 5/12/12 at 11:47 am to NC_Tigah)
quote:
Oh I'd imagine 3 or 4 JPM upper levels will be facing a career redirection
Oh, I'm sure they will.
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Blakely Bimbo 
Alabama Fan
Member since Dec 2010
754 posts
| re: Should Jamie Dimon Resign? (Posted on 5/13/12 at 8:44 am to MStant1)
Should Jamie Dimon resign?
ABSOLUTELY NOT. This country needs him. I firmly believe that Dimon and others behind the scene help save this country in 2008.
The problem right now is ZIRP is forcing banks to reach for profit and they are taking on risk. There is speculation about the position that produced these losses. The only information (about the position) out there is from the hedge funds who took the other side.
Everyone writing about the loss is speculating, but this is interesting speculation. "Wolf" is a trader who I have been reading for several years.
quote:
However, there is another part to the story that may bring to light the real reason for this strange trade. JPM may have bought protection in 5yr series 9 (maturing Dec2012) and sold 10yr series 9 (maturingDec2017) to protect the bank against credit spread jump to default risk. It is effectively a flattener and the bank may have bought more short term protection vs selling long term protection to reduce the cost of the hedge. This is probably a legacy position from 2007/2008. However, as the hedge runs down to its maturity, the credit curve of IG9 steepens and it would have hurt. Furthermore, the delta between the short risk and long risk trade would have shifted dramatically as the short risk trade approached maturity. Add the illiquidity of the off-the-run indices and JPM would have faced an unwinding nightmare. (I know because I faced some of the said nightmare in 2009 on a tiny position in off-the-run indices). And in all likelihood, Mr Iskil probably tried to keep the 10yr IG9 spread suppressed by offering in the market to protect his p/l. At US$100b, it is a position that cannot be exited in the markets, especially when the index is trading at a discount to the underlying credits. And when every hedge fund smells blood in the water. This is one reason why I personally hate trading indices.
Wolf in the Wilds
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prplhze2000
LSU Fan
Parts Unknown
Member since Jan 2007
29250 posts
| re: Should Jamie Dimon Resign? (Posted on 5/13/12 at 2:32 pm to MStant1)
Net income after tax is $5 billion.
LINK
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kfizzle85
LSU Fan
Houston
Member since Dec 2005
19845 posts
| re: Should Jamie Dimon Resign? (Posted on 5/13/12 at 7:01 pm to prplhze2000)
You realize that was last quarter and this happened in the current quarter yeah? and that net income is by definition after tax? Theres no such thing as "net income before tax."
This post was edited on 5/13 at 7:04 pm
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LSURussian
LSU Fan
Baton Rouge
Member since Feb 2005
63208 posts
| re: Should Jamie Dimon Resign? (Posted on 5/13/12 at 7:06 pm to kfizzle85)
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NC_Tigah
LSU Fan
Member since Sep 2003
40137 posts
| re: Should Jamie Dimon Resign? (Posted on 5/13/12 at 7:20 pm to kfizzle85)
quote:
Theres no such thing as "net income before tax."
Except perhaps in the case of enacted retroactive tax policy?
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kfizzle85
LSU Fan
Houston
Member since Dec 2005
19845 posts
| re: Should Jamie Dimon Resign? (Posted on 5/13/12 at 7:53 pm to NC_Tigah)
Still no.
This post was edited on 5/13 at 7:56 pm
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