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Submitted by Muhammad Refeeq
hat tip Tony
This is absolutely awesome work Muhammad. And thanks Tony.
caught, evidently by one of the best.
148Bn missing, the wolves will be on that one in a hurry.
I posted earlier about the money trail from Galleon founder. Here we go:
It turns out arrested hedge fund manager Raj Rajaratnam -- charged in a $20 million insider trading case -- has given big to the party in power.
Here are his largest cumulative contributions this decade, according to data from OpenSecrets:
$26,700 to the Democratic Senatorial Campaign Committee
$26,200 to the Democratic National Committee Services Corp.
$11,100 to Hillary Clinton
$10,000 to the New Jersey Democratic State Committee
$4,600 to Barack Obama
$2,000 to Charles Schumer
We'll see who decides to give it back or donate the funds to charity.
However, these contributions are insignificant for the 236th richest person in America. Even Rupert Murdoch has made donations to the Democrats (going so far as to hold a fundraiser for Hillary Clinton); so maybe the key phrase is "to the party in power."
Rajaratnam comes from a violently extreme minority group in Sri Lanka called the Tamils, and he appears to have funneled money to their cause over the years through "charities." His apparent financial corruption may come from a sense of loyalty to his Tamil brethren -- trying to raise money for "the cause."
On the other hand, this may be a CIA operation to help stabilize Sri Lanka by taking out a major Tamil benefactor.
Layers within layers my friend.
Well it certainly seems unlikey that the authorities discovered this scheme on their own. Someone probably dropped a dime.
How about a different format for us slobs who can't view this one when we are at work?
+1. Scrib blocked for me too.
It's only 2 pages. Here's the key part:
1) The deposits, the lifeblood of any bank are down by US$102bn (969bn – 867bn) from Q3 2008 to Q3 2009, representing a drop of 10%. Without deposits the bank simply can’t lend or buy securities.
2) We can also see that the bank has had a drastic drop in the amount of available (non-tied up) cash, losing US$33bn or just over 60% of it. This is an important figure since cash is the primary form of Tier 1 capital for bank solvency. Where has the cash gone?
To understand the next part we need to look at the financial transactions called Repos and Reverse Repos. These are re-purchase contracts between two parties, one of whom is the owner of a security and the other is a temporary holder who “rents” the security from the owner for an agreed period and who collects the income from the security over the holding period. The owner receives the cash back equal to the value of the security and this temporarily improves the liquidity of the owner. For instance, if you had $1000 and invested it all in US treasury certificates that mature after 10 years, your money is locked up for the whole 10 years. But if someone agreed to buy them off you for one year, as long as you made a contract guaranteeing the re-purchase, you could free your money up for other purposes, until the re-purchase date.
3) From the section of the report above the “securities purchased under resale agreements” has decreased by approximate US$62bn between 2008 Q3 and 2009 Q3. What does this mean? Simply that JP Morgan are paying out US$62bn less than before to other parties, in order receive the income streams from their assets. Put in another way, JP Morgan is providing $US62bn less liquidity to the money market. These numbers contrast with “securities loaned under repurchase agreements” in the Liabilities section of the report. Here we see that JP Morgan has actually increased the number of Reverse Repo agreements, from US$224bn in 2008 Q3 to US$310bn in 2009 Q3, an increase of US$86bn.
What we see is that in total JP Morgan has tried to increase the amount of cash funds at its disposal by US$ (62 + 86) 148bn. Yet in spite of raising all this extra cash on the money markets by decreasing repos and increasing reverse repos, the bank has actually got 60% less cash on hand.
Where has all that extra money gone? And a profit of less than US$3.6bn for the last quarter 2009 is being celebrated by the financial media. A drop of more than US$100bn in deposits is being ignored, a reduction in Tier 1 cash by 60% is being ignored and US$148bn of missing repo market funding is being ignored.
At least this handsome profit (US$3.6bn) should take our minds of the huge amount of money being handed out as bonuses at JP Morgan right now.
+2..... PDF format please.....
gee ... I like what he says but his web site ... dang ... that's bit ... something.
Too bad ...
I agree about the website content. However, his findings either are valid or not. Its hard to believe that JPM would let anything this obvious out the door. However, I see nothing wrong with his analysis. So, let's see what develops.
Nothing develops. The website disqualifies this person from being taken seriously on any matter. It is disappointing that Zero Hedge published this.
Facts are facts regardless of who presents them. What are your established standards for propriety to be able to present facts and if you ever did anything to jeopardize those standards could you be manipulated by it?
Your question is utterly incoherent, Miles Kendig. Is that a picture of Eddie Vedder?
It is the dearly departed Layne Staley, lead vocalist for AIC (one of the best voices from that glorious era).
"It was real wasn't it?"
Maybe the money went to some off balance sheet entity.
"We didn't lose it. It is resting peacefully at an undisclosed location."
Website does his credit worthiness justice. S&P 1110 before we see a pullback.
Bernanke successfully reinflating oil
if only housing prices were so easy
Gold - check
Equities - check
Oil - check
Food - to do
Housing - to do
A drop of $100 Billion in deposits is being ignored..??
yes that website ranks among the most disgusting
filth on the internet....you can always count
on neo-nazi jew hating scum to come out of the
wood work during a financial crisis....
mohommad - go fuck yourself bitch
It's My Web Site, Tell Me One Thing That Is Not True On It. One! Just One! If You Do You're A Liar.
Daryl Bradford Smith
The link to the website in the beginning of the article kind of hurts its credibility.
Cash is NOT Tier 1 Capital. It is a Zero Risk Weighted Asset. Get your terms right.
Furthermore, on the question of deposits, a closer look at the details shows the drop was entirely in the Treasury & Securities Services SBU where "deposits" naturally fall as AUM falls (which happens when the market falls out of bed and fails to recover, as it has over the past 12mos).
I'm not necessarily a JPM fan, but this is yellow jounalism masquerading as financial analysis.
Absolutely. It is complete crap. You can't pull a handful of balance sheet items without looking at the entire balance sheet. It is not unusual to see big fluctuations in cash balances; the difference could be in investment securities, excess cash could have been used to pay down debt, etc. That's why companies issue statements of cash flow along with income statements and balance sheets.
With regard to deposits, it is not surprising to see JPM's deposits down year over year. JPM is not primarily a retail bank. It acquired Washington Mutual prior to the 9/30/08 balance sheet and WaMu came with a lot of deposits, including CDs at higher than market rates. WaMu had liquidity problems and was paying above market rates to attract deposits. JPM is probably not offering above market rates and I'm sure a lot of CD money is flowing out of JPM as CDs mature.
Does ZH vet these kind of pieces at all? It will ultimately kill the credibility of the website if they are willing to post anything that is bearish regardless of whether it's valid or not. And I say that as somebody who is extremely bearish.
'a closer look at the details shows the drop was entirely in the Treasury & Securities Services SBU where "deposits" naturally fall as AUM falls'
If you look at the balance sheet for the JPM/Chase Retail Financial Services division, for the last three quarters, EOP deposits are down 10 billion per quarter - no small bleed.
I almost always find phenomenal analysis here... but the piece above is a glaring exception. Since when is "cash" the primary form of tier 1 capital? That statement impuned the authors credibility off the bat. And of course deposits have run-off. JP Morgan bough Washington Mutual just before 9/30/08. I a desperate effort to attract liquidity Wamu had been paying up for high cost, wholesale deposits. JP Morgan is letting this inferior form of funding roll off. Poor effort Muhammed.
Anon, I didn't see your post previously as I replied to the one above it. I agree completely and made basically the same points you did. ZH will fade into irrelevance if it keeps putting up content like this.
Part of ZH's creed is to be suspicious of what you read and hear, yet we have people here who clearly don't know how to read financial statements or know much about banks who immediately assumed this was a great piece of analysis.
I am concerned that ZH is rapidly becoming an echo chamber largely devoted to rants instead of legitimately critical analysis.
I think ZH is getting better every day. Semantics? but I always thought that cash was tier 1 capital - capital, banks can have an influence on. What other form of capital is above cash? Please educate me.
No cash isn't Tier 1 capital. If you Google "Tier 1 capital", the first search result is to Wikipedia which has a basic definition of it.
If on the last day of the quarter a company uses cash to pay a supplier or to buy a one year treasury bill, did it reduce its net worth? No.
Green. I think yes. They in fact paid over the base value of that inventory. If you buy a diamond ring and then sell it 1 minute later - you lose 50%. Treasuries are Interest rate notes - same kind of pain, no? (Over time based on market)
We're talking Accounting 101 stuff here. With all due respect, you don't even understand the basics. The "analysis" by the contributor is garbage.
I've always liked ZH but I agree that posting what is essentially a rant aimed at JPM without checking the facts is bogus. I hope ZH can clarify this.
I don't see the point of the article as June 09 numbers are similar to Sept. 09 numbers. Deposits could have dropped for a number of reasons like going back to mutual funds (money market, bonds, stocks) following the panic in September 08. I wish the author posted cash deposits for quarters before Sept. 08.
Anyone who know anything about financial statements and bank balance sheets will tell you that this "analysis" has absolutely no logic to it whatsoever! Author obviously knows very little about finance/accounting outside of his ability to add/subtract numbers...
I usually love the ZH approach to the "truth telling" but posting this one is an absolute embarrassment to say the least and will certainly take away some credibility from other issues...
That guys website is horrific, I sincerely hope zerohedge stops posting articles with links back to that site.
Yes I agree it's visually loud, but you would not judge a book by it's cover - right?
Muhammed Refeeq, Zero's new Guest Post Financial Analyst and expert on all things Zion is affiliated with an interesting web site.
I didn't know that "the radical homosexual movement in the United States is a Jewish movement". Oyy vey. Who would have thought?
Slavery? Blame it on Colombus and the 5 Jews on board. Didn't know that.
The international criminal network known as The Synagogue of Satan has existed since 740. That's over 1,000 years. Damn they can keep a secret.
But my all time favorite article from Muhammed Refeeq, Zero's new financial analyst and JPMorgan expert: "Jewish Financing Of The Nazi Party".
I wouldn't think about clicking on the website of this vile scumbag. I don't need any computer viruses.
This is an embarrassment to ZH. All anybody who wants to discredit anything they say has to do is point to this.
Hopefully one of the ZH crew looks at this thread and has enough sense to pull it, issue an apology and start screening "contributor" posts more carefully.
thanks for helping to keep the site useful.
this piece doesn't hold water on its face, but now that I know it was written by a fundamentalist who would love to see half of my friends and investors die, it's wrong on a whole different level.
makes me wonder what TD's hopes and dreams are for society. who is to blame for our ills in TD's world?
this shit doesn't belong on any respectable website.
See the more recent thread on the Harvard endowment where TD says he doesn't care about this crackpot's website, that he posts links to Bloomberg, the WSJ and other MSM where objective people could find things that are more objectionable, believe it or not.
well skewered careless whisper. that is some fringe stuff. was that introduction to his exhaustive 2-page research report some kind of threat? i vote no more muhammed
In order to attain a fair treatment of the Palestenians, people such as Muhammed Refeeq must not be given credibility.
Dont be stupid we all knows who controls the money and the debt. MRK is spot on in fact. Have you never seen the debt clock in your life and the fact that every country in the east is bailing out of the dollar in hard commodities. When have you seen the fed ever buying back 60% of its bond auctions? One look at who this bailout money is going to and its obviously a racket. If your are going to level criticisms be precise please and specify which part of the document is wrong.
Many thanks for your comments.
I am the author of the piece, Muhammad Rafeeq. I have read the entire balance sheet and financial statements of this report. A close look at my piece shows that I am in fact quoting from the (6 page) notes to the said accounts.
As for discounting the work on the basis of the website that it appears on, this is so illogical that Dr. Spock would have a brain haemorrage.
How many articles could be discounted on the basis that they have appeared on UFO, Bigfoot and Evolutionary Theory websites (the last ones a bit of a choker but it's the all the same to me)? Don't tell me that the readers of ZeroHedge are the last people on planet earth to still subscribe to the outrageous conspiracy theory that Muslims were responsible for 9/11; this is supposed to be an informed and open minded readership.
As for my qualifications to make such an analysis, I am a professional financial risk manager, starting at front end instutions of the Bank of England in the mid 1980's, where for my sins I was a joint project manager of the "big bang" restructure, for all the markets and issuing the UK national debt.
I was also a contributor to the New Capital Accord and the UK's 2000 Financial Servies Act, as a representative of a US household name financial institution. Anyone who states that cash does not form part of Tier 1 Bank capital is totally clueless and they should look at the methodologies for calculating the solvency ratios under the New Capital Accord. As for me, I have the T-Shirt.
Furthermore I have been a consultant at the board level to other major global financial institutions, who pay very well for such types of analysis (known as the Interpretation of Financial Statements), of which subject I have university postgraduate studies with the ACCA. I have also published joint papers in a PhD thesis, Studies in Value at Risk.
Anyone else think I don't know what I'm talking about or that I am not qualified or experienced on the subject?
You should download some of the shows on the website where myself and Daryl Bradford Smith actually predicted the depth and severity of this crash in Q3 2006 and where I have fully explained the cause of the crash.
"In order to attain a fair treatment of the Palestenians, people such as Muhammed Refeeq must not be given credibility."
JP Morgan profits, let's blame the Palestinians and Rafeeg
Funny Very Funny if it wasn't so sad about the current situation
Sad that the ad hominem arguments started so early. Predictable, but disappointing nonetheless.
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JP morgan financial results
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