1 first

2

if someone lost, someone else  won. 

 

3 Mmmmm... whale.

4 Hey, it's only money. If we need some more Barky will print up some for us....

5 Banks, car companies, what have you -- let them fail. We're not going to make any changes with the current cast of characters.

6 Too big to fail baby............

7 Easy solution to greatly reduce this type of thing from happening.  Let them fail.  Funny how failure, with the potential to loose everything you have keeps you from making these kinds of poor decisions.

8 re 4: that's what a lot of people felt for the past 15 years or so: if there's a screw up, the Fed will bail us out. We know where that leads: people take risks that they wouldn't take if they thought they'd get screwed.

9 QE 3, 4, 5? I forget which one we are on now

10
Jamie Dimon looks a lot like Chuck Hagel.

11 Bruno Iksil was also known as "Voldemort"

12 Nice blokes don't boast about walking on water.


I beg to differ.

13

If you are too big to fail..
.... sounds like you need a little bustin up..... like AT&T.



But..... Barky and the Progressives (sounds like a punk band eh??).... would rather have 3 or 4 humongous firms than 500 little ones....   Much easier to keep four or five under your thumb that it is four or five hundred.

Fascists.

<<spit>>

14 >> If financial institutions are so big they can single-handedly warp the market, maybe they shouldn't be betting truckloads of their own money like that.

Simple prudence dictates this. No law needed.

Part of the problem JPM has is that their position is so concentrated that they can't liquidate it without moving the market. This happens all the time with thinly traded stocks (it's why the "pump and dump" penny stock fraud exists).

They got themselves into a real pickle here.

15 Sounds like JP Morgan is baleen out of this particular broker.

16 going after the big fish.

17 2nd problem is that a lot of people don't know what hedging means: buying 10000 shares of stock and buying options to sell 10000 at a somewhat lower price mean you have decent protection against a bad loss in return for giving up a piece of the profits. Going long in one stock and selling another stock short because you expect them to move opposite direction (loss in one will be outweighed by gain in the other) is more gambling than hedging. Doing the same on small margin in commodities (eg buying oil futures and selling short silver futures because you think they'll move in opposite directions) is an invitation to disaster. And if you use all your funds for margin trading and you're wrong... yoicks.

18 This is a blip on JPMorgan's balance sheet. Who cares that they lost some money in one division. They are still in the black for the quarter and nobody was injured by this except for the stockholders.

This is called capitalism. Sometimes you win and sometimes you lose.

Every business in America makes bets every day. some are quantifiable like in banking, and some are more subtly, like what should the daily special be at the corner diner. But its the market that ultimately decides who wins and who loses, and regulation simply adds barriers and disincentives that distort the free exchange of capital.

19 So we lost a couple of billion dollars.
It was just a fluke.

20 Oh... and... Shep???


Go fondle yerself.

21

If financial institutions are so big they can single-handedly warp the market, maybe they shouldn't be betting truckloads of their own money like that

 

I know I'm getting the details wrong on this, but wasn't there a French trader who pretty much single handedly lost a few billion dollars (or Euros I guess) a few years ago and caused a huge market swing?

This is one of those areas where I have to admit that I don't know enough to have an informed opinion. I do agree, though, that failure is part of the business cycle as well. Every position will not win and risks do materialize. Hell, my itty bitty portfolio has a growth portion and a portion that's in the safest investments possible just in case the growth part goes to hell. There is something very troubling about the idea that a few people in a few institutions can cause utter disruption of the entire global market. I'm not sure what the solution is, if there even is one.

 

Also, isn't part of the problem that the institution isn't actually betting it's own money, it's betting the investors' money?  I'm probably drawing a fine distinction but there is a difference in kind with betting my own money and betting a pool of other people's money.  Then there's the whole domino effect of one area impacting another.  

 

All of that is a long winded way of saying I don't know what to do.  I am, however, arrogant enough to think that if I don't know what to do, I am utterly positive that Our Betters in Congress such as hell don't know what to do.

22
Anyone remember Long-Term Capital Management from the late '90's?

It served as a harbinger for "too big too fail," but of course we didn't take heed.

23

Kevin Williamson seems to be missing the point.

First, the only reason JPM has the wherewithal and willingness to make these bets was due to taxpayer largesse.  The unconditional support offered by the Fed to JPM created moral hazard which removes the disincentive from making bad bets, as losses were socialized and profits were privatized.

Second, JPM's CIO desk was characterized as a hedging desk, but its trading volume and revenue was so huge that Tyler at Zerohedge surmises it was simply a facade for the bank's proprietary trading operations, which JPM has stated is closed under the Volcker rule.  Riddle me this.  If the desk only engaged in legitimate hedges of its client's underlying positions, then how could there have been a $2 billion loss.  Hedges reduce, they don't exacerbate risk.

Third, Williamson doesn't know what he thinks and is either a hypocrite or an idiot.  He originally opposed TARP then, when brought under NRO's banner he reconsidered and concludes TARP was a good thing (See Blame Milton Friedman article).  Is the standard he espouses that Banks should be required to take their losses without taxpayer support until that bank amasses risks big enough to risk the system?  That's the definition of moral hazard/Too Big To Fail.

24
PBS' Frontline did a story on LTCM back in 2000 called The Trillion Dollar Bet.

It's pretty good and you can find it on yootoob. Narrated by Charles Emerson Winchester III.

25 This is all way over my head, but I am sure obama will blame President Bush

26 I don't care if these effers lose money so long as they don't come crying to Uncle Sugar to make it up. I would EXPECT some guy who lost $2B dollars trading to be not allowed to trade anymore. Even in Obama days that's a lot of money. I am thinking of a new business model where I offer JP Morgan the opportunity to save a BILLION DOLLARS by just paying me a billion dollars not to lose two billion.

27

Some guy named Andrew Sorkin coined a new phrase: Too Big To Manage.

28

I lose Billions of dollars all the time.

Shit happens.

29 I am having a delightful time yanking some chains over at Kos.

Apparently I am a racist and a bigot for my opinions.

30 Some guy named Andrew Sorkin coined a new phrase: Too Big To Manage.>>

I coined that phrase the first time Al Gore had an appointment. Oh sorry you said Manage not Massage.

31
Shit, I pissed away over 5 trillion big fucking deal.

32 The real story here is a compare / contrast between what this guy did and what Corzine did.

33
Algore and John Travolta walk into a massage parlor...

34

The financial market   companies   aren't able to lose billions of   (taxpayers')  dollars  AND kill off hundred of jobs simultaneously.

It take a green energy company to do that.

35 The Nebraska GOP Senate primary just hit the "Whoa!" threshold.

NRO Online LINK:  tinyurl.com/8yzwow3

Late-Charging Fischer Has Nebraska Senate Primary Too-Close-to-Call

Excerpt:

In its final hours, the Omaha World-Herald reports the race is “Down to the wire,” while a Nebraska political blog, Leavenworth Street has a lead item with the headline “Holy crap! Fischer LEADS Bruning by 5 pts in new poll.” The poll is automated, but sure as heck shows a big trending.

36 Remember the BFF of the SCOAMF who tried to get the Pentagon to lie about bandwidth and GPS systems?

Another one bites the dust;

Phil Falcone's Downfall Is Complete: LightSquared Files For Bankruptcy

http://tinyurl.com/c2uxrey

37

Going long in one stock and selling another stock short because you expect them to move opposite direction (loss in one will be outweighed by gain in the other) is more gambling than hedging.

 

You know, I've been saying since the end of the 90's that the stock market is no longer a market but a gambling center. It was interesting, when I moved some retirement money around about two years ago, I had a pretty long meeting with my new financial guys which I really appreciated because, seriously, I am not a big client.  We were discussing how investment strategy has changed from looking at the underlying strengths and weaknesses of a company and then trying to extrapolate future performance to looking at what the stock is doing and then betting on that.  There seems to be a major disconnnect between what a stock is doing and the financials and stability of the company.  At some point, there is going to be a huge correction.  Reality and math always, always, always win.  The financial guys think a large part of it has to do with executive compensation being tied to making the quarterly stock price goals.  Who gives a shit about the long term when you have to hit that next quarterly mark.

 

I should say there's nothing wrong with playing the market so long as you know that you are not buying shares in a company, you are placing markers on the crap line. 

38 I don't care if these effers lose money so long as they don't come crying to Uncle Sugar to make it up.

I would EXPECT some guy who lost $2B dollars trading to be not allowed to trade anymore. Even in Obama days that's a lot of money. Posted by: blaster

Yep, and a big part of the reason for these companies to make these outsized bets is that they knew they would be bailed out. Why would you as investor limit your leverage if you knew someone else would be on the hook?

No amount of regulation, nor the wisest of regulators is going to overcome the moral hazard bailing out companies when their trades blow up. It guarantees more profligate stupidity.

39 Remember the BFF of the SCOAMF who tried to get the Pentagon to lie about bandwidth and GPS systems? Another one bites the dust; Phil Falcone's Downfall Is Complete: LightSquared Files For Bankruptcy http://tinyurl.com/c2uxrey Posted by: kbdabear at May 14, 2012 02:32 PM (Y+DPZ) Ya know I forgot where I knew lightsquared from. Thanks for reminding me

40
Aglore, John Travolta, and Dominique Strauss-Kahn walk into a massage parlor...

41 Panic 1907. Payback is a bitch.

42 The one industry that government should heavily regulate, it doesn't.

43 Aglore, John Travolta, and Dominique Strauss-Kahn walk into a massage parlor...

Posted by: Soothsayer

 

Is there a happy ending?

44

Warren is beating her faux 1/32nd Cherokee “war drums” …

Democratic Massachusetts Senate candidate Elizabeth Warren called for JPMorgan Chase CEO Jamie Dimon to resign his position as a director at the Federal Reserve Bank of New York.

I call for Warren, an "evil white-eye", to step down from the Harvard faculty.

45 Goodwill gesture to Abbas: The government has instructed the security establishment to prepare for the transfer of 100 bodies of Palestinian terrorists who are buried in Israel to the Palestinian Authority, Ynet reported Monday. ??? Shit if giving them dead bodies is good will, have I got a plan for them!

46
Also in today's financial SOS message, major Obama backer Phil Falcone's  LightSquared wireless.GPS jamming company has filed for bankruptcy.

Hopefully The O cashed that last donation check before they turned turtle.

47

I watched that 60 Minutes interview with the guy from JP Morgan yesterday evening, and I told my wife that there was no way that guy went on national television and admitted that "mistakes were made" and "we were stupid" without some assurances from someone that no one would be prosecuted for this.

 

The SEC can investigate all it wants, but (just like the mortgage frauds of a few years ago) no one will suffer anything beyond a bruised ego and a golden parachute.

48
Is there a happy ending?

ahh, so you've heard it, before?

The ending was happy..for almost everyone.

49 And here I though the London Whale was referring to Mycroft Holmes.  Imagine my shame.

50 Get those men back in here!  Turn those machines back on!

51

 (boNGU)

 

I did my undergraduate studies at Bong U.!

52
Aglore, John Travolta, Dominique Strauss-Kahn... AND Roman Polanski... walk into a massage parlor...

53 Pull my finger

54 >>I should say there's nothing wrong with playing the market so long as you know that you are not buying shares in a company, you are placing markers on the crap line.

Worse. With the high-frequency trading algorithms in use these days, it's a lot like going up against SkyNet.

55 Fuck  this "let's have more regulations"  bullshit.  We have too many of them already.  Just let Chase take the hit.  It's called the market.  They bet, they lost.  It's the way things should be.

56 Oakland PD evicting occupoopers who took over a Cal Berkeley research plot

http://tinyurl.com/dxjflsm

57 Posted by: Soona at May 14, 2012 02:39 PM (9bMev)

+100

58 There seems to be a major disconnnect between what a stock is doing and the financials and stability of the company

Yep.  Some things have morphed into pure trading vehicles where traders just try to fuck each other out of their money -- ex. GM stock as it swirled down the toilet and it became clear than common stock holders would get nothing.  It kept trading and moving up and down, when it should have been $0.00 and stayed there.

59 Unfortunately, this is NOT capitalism. This is something other, plain and simple. True capitalism requires the free flow and exchange of information as well as the merciless prosecution of fraud. Neither is present in this case.

60

#38 So true.  There is some talk that compensation was at play at JPM too. 

 

But one thing that hasn't been said is that it is perfectly reasonable to expect the big banks to be doing more of this complex derivatives trading, rather than less. After the idiots in Congress stripped the banks' ability to charge what the market would bear for debit interchange and overdrafts, the banks were going to have to make that up somewhere.  The pro-more-regulations crowd seems to want banks to essentially become public utilities or even worse, non-profit organizations. 

61

The real story here is a compare / contrast between what this guy did and what Corzine did.

 

 

I still want someone to explain to me, with puppets if necessary, how it is that I can use my debit card to buy a pack of gum at CVS and it shows up in my online bank listing within a minute but MF Global can somehow lose a billion dollars and say "we have no idea where it went!" I presume it has to do with comingling but, dude, at some point there have to be some sort of records.

62 So Ace, what you're saying is that you'll defend Morgan no matter what stupid thing they do and no matter how much money they lose, even though you don't understand a single word of it.

We just need to trust those smart Wall Streeters with our money and go back to thumb-sucking because our monetary overlords are simply intent on doing what's best for us poor slobs who get stuck for the billions to clean up their messes, so all you idiots criticizing them shut the hell up even though I don't understand what you're criticizing them for.

Well, that's an intelligent position.

63

@47


Looks like we all checked our RSS feeds at the exact same time....

64 The best solution?  Government prevents fraud and stays out of buisness all together.

65 Just let Chase take the hit. It's called the market. They bet, they lost.It's the way things should be.

For about 5 billion years now on this planet, the penalty for stupidity has ALWAYS been extinction. 

What govt regulation has done is remove the "extinction level" pain of failure and stupidity, which warps the risk/pain cost variables that get set in various trading models towards the risk rather than safety end of the spectrum.

66 So Ace

FAIL.

67 BTW, in other DOOM-y news, Ally Financial (formerly known as GMAC) put its ResCap mortgage subsidiary into Chapter 11 bankruptcy this morning.  Ally still has about $12 billion in TARP loans to repay, and it was unable to do an IPO with the losses at ResCap mounting.  It appears that the assets of ResCap will be sold to Nationstar, a company set up by the private equity fund Fortress.  Nationstar is buying up a lot of castoff mortgage assets as the banks get tired of the ongoing losses.  There must be some smart guys there who see a pony in the room full of crap.

68
True capitalism requires the free flow and exchange of information as well as the merciless prosecution of fraud.

I concur. And that's why I am done defending these pigs against regulation. These people need to be regulated.

But the government is just as bad and needs regulation, too!

69 So Ace, what you're saying is that you'll defend Morgan no matter what stupid thing they do and no matter how much money they lose, even though you don't understand a single word of it.

Psst... Ace didn't write the post.

70 >>So Ace, what you're saying
>>Well, that's an intelligent position.


I lol'd.

71

Big trading firms have highly paid Risk Managers....to advise them. ...But they sometimes don't pay any attention to what they're saying, until it is too late.

 

I watched the movie 'Margin Call' a few days ago.... [on EPIX] ....with Kevin Spacey, Jeremy Irons, Demi Moore, Simon Baker, Zachary Quinto....

 

It's about the crash in Mortgage derivatives.....and how a big trading firm took the lead in dumping their holdings in them, which started the downward cascade, which was inevitable anyway.

 

Demi Moore played the head 'risk analyst' at that big firm. ....And she had been quietly advising of the 'risks' in investing so heavily in those derivatives...bundles of mortgages. ....But no one had payed much attention to her. ....She became the fall-guy, because she "wasn't vocal enough" about the impending doom.

72 Sounds like JP Morgan is baleen out of this particular broker.
Posted by: pep at May 14, 2012 02:20 PM
-----------------------
*slow clap*
Well played.

73 Well, the left thinks they got a big winner with the attack on Romney and the steel mill.
Imma gonna sit back and watch. But let me tell ya': It's not a winner. Attacking greed worked exactly once in America--during the Depression. And even then, I'm not so sure. What with all the lying and revisions the left has done to try and polish that turd FDR.
See, the left likes to pretend that people get angry over movies like "Wall Street." But, they're stupid.
Seriously, you're going to go with that? The guy who bankrupted a company vs. the guy who bankrupted the COUNTRY? 

Also, the gay marriage thing. They're still beating their chest over that. Lots of "deep thoughts" from various lefties on the Facebook. You know, multiple sentences that start with "I feel" which of course signals logic and reason ahead. Best part about it is the blue-on-blue fire building up as I'm seeing some blacks attacking black ministers for not bowing down to the pronouncement of the black Jesus.

74  The pro-more-regulations crowd seems to want banks to essentially become public utilities or even worse, non-profit organizations.

Posted by: rockmom at May 14, 2012 02:43 PM (NYnoe)

 

-------------------------------------

 

If I were in the Romney campaign, I'd try to come up with a direct connection to the Dodd-Frank Finance Law.  I would almost bet money that this was done to counteract that travesty.......plus a bit of fraud.

 

But, this is what happens when government over-regulates businesses.

75 Posted by: JEA

Your reading ability is a testament to the weight of your opinion.

76
And here's JEA, the dumbest cocksucker around, with yet another failed attempt to call us out on hypocrisy.

77 Back when the government was bailing ut these failing banks and companies all the smart money said then that the government should just let them fail because that is what it would take to fix the markets.

78 I know next to nothing about high finance, so I'm not in a position to try to identify a bad guy and point a finger like, say, Shepard Smith does all the time

Shep needs me so he can point his finger and say 'there is the bad guy'

Well, say hallo to the bad guy!

79 @ 67

Hehe.

The real story here is a compare / contrast between what this guy did and what Corzine did.

So far as I know SCOAMF isn't refusing Corzine's donations even now. Nor have I seen outrage over this in the MBM.

80 The one industry that government should heavily regulate, it doesn't.

It is heavily regulated.  Probably too much so.

Any regulatory scheme that prevents them from losing money would also hinder them from making money.

The problem isn't that they lost money- it happens.  It's the taxpayer funded bailouts that are/were the issue- take those off the table, and let the financial sector sink or swim.

81 Also here is some edu-ma-cation for you Morons who may be getting all your info on this from the MSM:  It is not true that the "Volcker rule" has been "delayed due to heavy lobbying by the big banks such as JPMorganChase."  It's been delayed because the original proposed rule was over 300 pages of gobbledygook that nobody understood, and because it exempted trades in U.S. sovereign debt but not in state or municipal debt or debt of foreign governments.  That was likely to blow up the markets for state and local bonds and also piss off most of the governments of the rest of the world.  It also would have been a nightmare for Canadian banks that have a presence in the U.S., and the Canada central bank as well as the E.U. finance minister have protested.  So there are a lot more than the big U.S. banks pushing for a rewrite of this rule.

82 Nationstar is betting on some sort of moderately timely turnaround in the real estate market.  I'm thinking they get burned.

A lot of the defaulting stuff is middle-high end with crazy taxes towns are resisting changing when a place sells at 1/3 what it was bought for.  Nationstar is getting those crazy tax bills, plus all the sundry code violation notices, etc. 

They're also going to get a big fucking surprise when a lot of this boarded up stuff is reopened -- they'll find that all these "sealed" "energy efficient" new homes, are very efficient at growing toxic black mold if they've been sitting around closed up for a year or more.  The remediation costs if its pervasive are about the same as bulldozing and starting from scratch.

83

There must be some smart guys there who see a pony in the room full of crap.

 

Just spit balling, but what I would do is buy up the paper, file for the foreclosures, take the properties back, bulldoze the houses, clean it up and then sell the land to one of the huge agribusiness companies to use for planting corn to make ethanol.

 

But, alex, you say, what about zoning and EPA and blah blah blah? Nothing a little walking around money won't fix IYKWIMAITTYD.

84
Do you know why our government (Republicans and especially Democrats) will never let these financial giants fail?

Because of pensions. To be more precise: pensions for municipality, state, and federal employees.

Do you really think that our elected politicians, keepers of the checkbook, will ever allow millions of pensions to evaporate under their watch?

85 Breaking - Ron Paul suspends campaign but will not release delegates.

86 will ever allow millions of pensions to evaporate under their watch?

Not that blatantly.  The govt will devalue the currency and attack those pensions that way. 

87 >>Do you really think that our elected politicians, keepers of the checkbook, will ever allow millions of pensions to evaporate under their watch?

We're back to "math and reality always win."

88 re 81: wasn't it London? Can the US gov't regulate what goes on there? I presume the Brits are too busy paying welfare to illegal immigrants and building windmills to notice.

89 A New York police officer seeking to rename a Harlem street for a cop gunned down inside a Manhattan mosque 40 years ago was told by local leaders to seek the blessing of area Muslims. NYPD Officer Philip Cardillo was shot dead in an infamous 1972 incident in which police responded to a fake “officer down” call from Muhammad Mosque No. 7, the New York headquarters for the Nation of Islam. The accused gunman was later acquitted, and the city's perceived unwillingness to back the police has long been seen as a low point in relations between city government and the police department. After four decades, NYPD Inspector and local Precinct Commander Rodney Harrison wants a section of 123rd St. named after Cardillo. "It's been 40 years," retired NYPD cop Randy Jurgensen, who was at the mosque when Cardillo was killed, told FoxNews.com. "It would be closure for the Cardillo family and the police officers there that day." "I think they have to give the Inspector some sort of answer." - Randy Jurgensen, former NYPD cop In New York, the City Council typically approves street namings on the recommendation of local Community Boards. But members of Community Board 10, which represents the Harlem neighborhood of Manhattan, have effectively blocked Harrison's plan by telling him to seek the approval of local Muslim leaders Sucking a little cock are we?

90  Breaking - Ron Paul suspends campaign but will not release delegates.

Posted by: rockmom at May 14, 2012 02:57 PM (NYnoe)

 

---------------------------------------------

 

Luap Nor and his pissy little minions are on the same level as OWS as far as I'm concerned.  Might as well say they're working for the SCOAMT campaign.

91
JEA = Troll-type: Seagull

92

#84 Yeah, that always sounds like a good plan, but when you have properties scattered across the 50 states it gets very labor- and money-intensive to even foreclose and bulldoze.   

 

They made a ton of bad personnel and business decisions in that company.  My only surprise is that it took this long to acknowledge the obvious and put it into bankruptcy.

93

Chase/JPMorgan has been heavily into Commercial Real estate mortgages....for years. ....They aggressively went after commercial paper, thinking that it would be 'safe'.

 

The Commercial real estate market is in even worse shape than the Residential real estate market.....with occupancy rates down across the country, and buildings vacant and boarded up.

 

A lot of Banks have been covering up their non-performing Commercial mortgages. ....They don't want to foreclose...and then have to pay for the utilities, security, liability insurance, etc....that they would have to assume if they took over these vacant buildings.

 

So I'm thinking that this thing that has just happened with JPMorganChase....is just the tip of the iceberg. 

94
Whether you want to admit or not, Ron Paul's endorsement of Mitt Romney would be a huge help.

95

What Romney should point out is Obama's failure in this. The 5 major banks are bigger now than they were when they were too big to fail. Now they are too bigger to fail.

 

There are some regulations that banks should adhere to but you can't regulate profitability or failure. The only way you can cut the risk is to bring back glass segel which would force the big banks to sell their trading operations. Of course in doing that they would be forced to sell their most profitable business which would have the effect of making everyday banking more expensive for consumers.

 

Jamie Diamond said something on Sunday that everyone is overlooking. He said that most of Chase's downside risk is in loans, not trading. The hedge was intended to offset the risk of their outstanding loans. Without that hedge they would have to increase the cost of those loans to consumers.

 

So you can take a risk that they will manage their risk through trading or just pay more for loans. I don't really know what the answer is to that.

96 ...I am utterly positive that Our Betters in Congress such as hell don't know what to do. Posted by: alexthechick at May 14, 2012 02:23 PM

This, so very strongly.

Part of the problem with the whole Wall Street system as it is can be traced to interference/rulemaking/bailouts from the jerks in D.C., including Bark Obama.

Without the creeps and crooks in government sticking their fingers in, companies would take a hit from investors fleeing a $2 billion loss. Nowadays, they sacrifice a few staff (who are getting enough via bonuses and severance for the entire Moron Horde to live comfortably) who can later be rewarded with government jobs, cry a little, and the Dog-Eater-in-Chief sends 'em a pile of money so no one gets hurt.

But of course there will be hearings in which members of Congress can preen and posture. TARP money will be fed to Chase so no citizen loses a penny and no executive loses a bonus. If Jamie Dimon throws a few million at the SCoaMF, he'll skate.

I worry more about the corruption in Washington than I do Wall Street screwups. In an honest world, Chase and other high-fliers would suffer for their mistakes, and the government would be purged of about 600 key players.

97 Arrr, there be the White Whale what ate my portfolio!

98 We just need to trust those smart Wall Streeters with our money and go back to thumb-sucking because our monetary overlords

Well, that's an intelligent position.
Posted by: JEA at May 14, 2012 02:44 PM

Put all your faith in government, because with the super genius guidance of Barney Frank and Chris Dodd, cock-sucking beats thumb-sucking

Intelligent positions!

99
Well, the first thing Congress should do is...


ban bake sales.

100 Whether you want to admit or not, Ron Paul's endorsement of Mitt Romney would be a huge help.

Posted by: Soothsayer at May 14, 2012 03:02 PM (9Q7Nu)

 

-------------------------------------------

 

The  only thing about that......is THAT will never happen.

101
Second thing they should do is propose more casinos.

Third, more rights for homosexuals.

Fourth, draft a two-thousand page bill to regulate farting.

102 OT:  Anyone here watch Swamp People?  Mitchell Guist died this morning on his boat.  Appears to have had a seizure.

103 OT: Anyone here watch Swamp People? Mitchell Guist died this morning on his boat. Appears to have had a seizure.

Posted by: Tami at May 14, 2012 03:06 PM (X6akg)

 

I do which one was he?

104
Then, to solve our looming financial meltdown, hold a vigil for Uprighttray Martin.

105

Dimon  is  an   asshole.  They  were  gambling,  not   hedging   and  your  first  clue  should  be  this  was  being  done  out  of  an  office  in   London,   the  financial  fraud   center  of  the  universe.

 

Dumbshit  Dimon  is   going  to  lose  at   least  another   billion  and  maybe  a  lot  more  before   JP   Morgan  can  unwind  this  mess  which  will  take  months.

 

 

106 Here robtr....   http://tinyurl.com/cb6nshl

107 There are otherwise normal people walking around in the real world who actually believe that risk can be legislated or regulated out of existence. These people are insane, but their star has been rising for a long time. I cannot see how this trend can reverse before the bottom falls out.

108 Thanks Tami, that's too bad I liked those old guys. They were weird though.

109

Breaking - Ron Paul suspends campaign but will not release delegates.

Is he really going to be able to pull down Convention Credability?  Seriously, If either Santorum or Newt allies with Romney in a meaningful way, Paul's delegates would already be unimportant.  And given that there are still delegates to be awarded that will become true even without an alliance (although I know there are fears that the Romney Bound Delegates will "defect" on platform issues draging us "Paul-ward" as it were, but the National Convention is not some local caucus the paulbots are going to be able to merely disrupt and gain control off.

110

106  .......this was being done out of an office in London, the financial fraud center of the universe.

 

And school teachers in England are forbidden from marking more than 3 words misspelled on a student's paper. .....Hmmm. ....Maybe spelling is important  in some  jobs  afterall. 

111 Thanks Tami, that's too bad I liked those old guys. They were weird though.

Posted by: robtr at May 14, 2012 03:13 PM (MtwBb)

I've never really watched it....just saw the news on Twitter and I thought I remembered some people here saying they watched it.

112 Thanks Tami, that's too bad I liked those old guys. They were weird though.

Posted by: robtr at May 14, 2012 03:13 PM (MtwBb)

Who on that show isn't a bit weird?  I mean, they live in a swamp.  By choice.

113 What govt regulation has done is remove the "extinction level" pain of failure and stupidity, which warps the risk/pain cost variables that get set in various trading models towards the risk rather than safety end of the spectrum.

No, it simply deferred it.  It also sucked in a totally new class of mental defectives, who will themselves suffer in the inevitable, enhanced event.

Along with the rest of us sadly, but if it puts some swelled heads on pikes pour encourager l'autres, I can deal with that.

114 Ace, JPM has combined deratives exposure of seventy trillion dollars.  That's more than the world's entire output.  The Whale's ouster is a symbolic gesture, as is the "regulation" of the whole sordid mess in intrnational money.

JPM is one firm.

The right needs to finally get its head around the fact that fiat money and central banking have lit the fuse on the single most catastrophic event about to befall classical liberalism and liberty itself.

115

Oprah,Orca,Michelle,etc.

116

"The right needs to finally get its head around the fact that fiat money and central banking have lit the fuse on the single most catastrophic event about to befall classical liberalism and liberty itself."

I have been studying these events for the last 10 years or so, strictly from a layman perspective. Everything I know about finances I have either learned on my own or from observing friends and acquaintances who in the field (of which I am blessed with more than a few). My own portfolio is modest, but very important to me.

Having said that, I completely agree with your statement.

117 See Zero Hedge article "JPMorgan Trader Accused Of "Breaking" CDS Index Market With Massive Prop Position"

118 Bruno Michel Iksil ***** Are we sure this guy exists? He supposedly earned tons and tons of money for JPM in 2010, but a Google search for 2010 returns absolutely no results. Is his name an anagram for something else?

119 In fact, it appears that all that has been written about this guy has occurred only in the past few months.

120 My own take on this situation is rather simple, it is a "Good news, bad news" scenario, and I don't think we can avoid.

The good news is that we will soon all be millionaires.

The bad news is that it won't make any difference, as most of us will be wiped out anyway, when a tank of gas costs a thousand dollars, a gallon of milk a hundred, and a loaf of bread two hundred.

121 This here is some ponderous bullshit.

122 Why did I think of Michael Moore on vacation when reading the title?

123 Mitt pulled a loose thread on the collar of my button-down shirt. That homophobic act scarred me for life!

124 Obama is a stuttering clusterf*ck of a miserable failure.

125 Bruno Michel Iksil is Keyser Söze.

126 So JPM is still going to turn a profit. Perhaps not the biggest one they have ever made. But nonetheless, a profit.

JPM still has more than adequate liquidity and capital.

No laws or regulation were broken.

No customers are without their funds. Or at least funds which  they knowingly existed given today's level of disclosure.

So in the end. whale-boy made a bad bet. It was bad for business and reputation. But that is the nature of capitalism.

Are JPM investors happy? No of course not. But are they begging for a better stranglehold from the government which further negatively affects future earnings more than all the current Dodd-Frank, Congressional intervention, anti-capitalist stuff Obama and Democrats have instituted?

No. Hell no.

127 JPM has $70T in petty cash then, Exile? 

Can you spell national security?

128 JPM has combined deratives exposure of seventy trillion dollars. How is that figure derived?

129 And of course this was a combo of derivatives and credit default swaps.

Has there ever been a derivative that didn't blow up in somebody's face? Why do they keep falling for this? The very name makes me leery.

Why are CDS taken out by uninvolved parties even legal in states that otherwise outlaw gambling? If I tried to take out a life insurance policy on a complete stranger I'd soon be hearing from the cops. But do the equivalent on a company or financial instrument and everything's cool.

130 126 Bruno Michel Iksil is Keyser Söze.

Posted by: toby928© at May 14, 2012 04:40 PM (NG097)

The perfect fall guy.

131

I haven't heard what they thought they were hedging against.  To the extent the hedge was unprofitable, did the other side of the bet produce a larger return buried in the P side of the P&L?

Are both sides of the position closed out or if open, how large are they? 

Was the strategy flawed in that the hedge didn't provide the intended result and the bank lost money on both sides of the transaction?  It might be nice to know a little more about what JPM was thinking here.  What is worrisome is if the hedge was unsucessful for a quick 2 billion, what monster exposure is still lurking on the books to blow up when the markets gyrate more wildly.

I'm sure that the SEC will get to the bottom of it, and arrest John Corzine to boot!

132 The only big thing about this story is how many people keep commenting "How can we stop this sort of disaster from happening?" As if it is some sort of national disaster. Some of them seem to be people who ought to know better.

133 A very complicated mess.  I have not seen any concise summary of what the trades and hedges were, or what was the fly in the ointment causing the failure.  What is known is that some 2 billion has been lost on one side.

I wonder who was on the other side of this transaction?

134

As someone earlier intimated, true capitalism can only happen if success and failure happen without government interference.

Failure is the most effective teacher in life. At the risk of going off on a tangent America learned much more from its failures at Pearl Harbor than Japan learned from its victory.

When the government, thru good intentions or not, tries to insulate businesses from failure, all they ensure is further failure.

135 *MY* take on the JPMorgan thing is that THIS WAS NO ACCIDENT.  If it ever all comes out, I'll bet that JPM had to pay some VERY BIG somebody off to the tune of about two billion-with-a-B dollars.  You can't exactly write a personal check for that amount, y'know what I mean?   

So JPM arranged this "Oooh, look, we're not paying attention to what Mr. London Whale is doing but, really, it'll be OK" thing; followed by the subsequent "Ooooh, big oopsie, but now we've learned our lesson and we're SO contrite; look- we're even going back to putting real controls on our traders!!!  Pundits are laughing at us in the newspapers, and the SEC porn-peeps will pretend to scrutinize our books, and geez we lost SEVERAL DAYS worth of profits - haven't we been punished enough?" 

But, of course, outside the glare of the sideshow JPM created, some mysterious payee is smiling happily at his massive new pile of US dollars.  Blackmail?  Political payoff?  George Soros raised his prices for services rendered?  We'll probably never know...

136 1) JP Morgan has like trillions in assets and management. It is simply too large and is forced to make bets so large they move the market, which is very dangerous to get out of a bad trade, as it gets worse the more you sell. 2) The Volcker rule will be skirted somehow - they always find a way. 3) We should return to the olden days where bankers were never bailed out and bank officers had to submit performance bonds worth several years of salary. Those bonds would be forfeit if the bank went bust. 4) Alternatively, simply limit the size of a bank relative to GDP. Then they can do whatever they want without being "too big to fail."

137 I wonder it there is or can be an idea of an "over-saturation point" within a given index where a single company's position relative to--or as a percentage of--the size of that particular index is too large.  Or whether a notion like that is even useful.