JPMorgan Pretends To Shut Down All Prop Trading Desks, In Latest Smoke Screen Act Of Volcker Rule "Compliance"

Tyler Durden's picture

So JPMorgan fires 20 people in its commodity prop book. What about Sempra Energy, which Dimon purchased recently? Is that getting spun off too? Or are all the 20 whopping newly unemployed advised to seek employment at Sempra? One wonders why JP Morgan named a new global head of commodity strategy today. But yes, let's wave the white flag in the face of the dumb public and pretend we are complying with Volcker. But first, let's have the corpulent Frank in charge of the finreg abortion lisp something on TV about what a great success his capture by Wall Street is proving to be.

From Bloomberg:

JPMorgan Chase & Co., the second- largest U.S. lender by assets, told traders who bet on commodities for the firm’s account that their unit will be closed as the company begins to shut down all its proprietary trading, according to a person briefed on the matter.

The bank eventually will end all proprietary trading to comply with new curbs on investment banks, said the person, who asked not to be identified because JPMorgan’s decision isn’t public. The New York-based bank will shut proprietary trading in fixed-income and equities later, the person said.

Closing the prop trading desk for commodities affects fewer than 20 traders, including one in the U.S. and the rest in the U.K., the person said. The unit is based in London, where traders on Aug. 27 were given notice, as required by U.K. law, that their jobs may be in jeopardy, according to the person.

Congress passed curbs on financial firms this year designed to prevent a recurrence of the 2008 credit crisis, which almost caused the banking system to collapse. Proprietary trading involves transactions made on behalf of the bank rather than its customers. The curbs on proprietary trading are known as the Volcker rule, named after former Federal Reserve Chairman Paul Volcker, who campaigned for limits on risk-taking by lenders.

Traders will be given a chance to apply for jobs elsewhere in the company, according to the person. JPMorgan spokeswoman Kimberly Weinrick declined to comment.

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Sudden Debt's picture

The only things that happen naturally in an organization are friction, confusion and malperformance.
Everything else is leadership

knukles's picture


As in did the final form Volcker Rule retain the exemption of Banks to trade Gold and Silver for their own accounts under the pretext that such constitutes mainline business?

Betcha, betcha, betcha.....

In days of yore, t'was rumored Kings to be  stingy, not relinquishing the Kingdom's Purse Strings, Departments of Treasure or Mints (and not as in after dinner, little grasshopper).

LePetomane's picture

Oh no!  How will I go on?

Voodoo-economist's picture

uhm would that include their notorious PM intervention team?

Azannoth's picture

shit if they did that gold would be 2000 in a week :)

taraxias's picture

Don't get too excited, they are being transfered over to the FED

silvertrain's picture

 Going to have to ask the doj on that one, ive been wondering how that investigation is going..

Sudden Debt's picture

DON'T SAY THESE THINGS! You're scaring the kids!

Treeplanter's picture

It appears they were active today.  Fat chance they go away.  Smoke and mirrors.

carbonmutant's picture

"We’ve got too many banks chasing too little volume..." She said.

-1Delta's picture

Also look at the ES vol vs Index option volume... all humans are gone

Sudden Debt's picture

hmm... looks like pretty old news. 3/8/2010

Sudden Debt's picture

“No one’s going to get screwed. We’re not going to do crazy things on compensation at the end of the year.”






Whenever somebody tells me : don't worry, I WORRY!

mephisto's picture

“No one’s going to get screwed. We’re not going to do crazy things on compensation at the end of the year, because you won't be here to pay by then.”

Fixed it for you.

I am a Man I am Forty's picture

Blythe, such a lying ho, must have been difficult for JD to cut this money losing department.

DosZap's picture


It's shit like this, that makes me puke........

“Don’t panic,” she said in summing up the 35-minute call, a recording of which was obtained by Bloomberg News. “No one’s going to get screwed. We’re not going to do crazy things on compensation at the end of the year.”

Meanwhile, back at the Gruel bowls..........

Ragnarok's picture

I, as a casual poster on ZH and contributing nothing of substance to the process, demand more details! ;)

Sudden Debt's picture

and I demand more nudity on this site!

Robotrader where are you!

DosZap's picture


He Exfoliated............

schoolsout's picture

Gold is up today...probably won't see him come around until the next $2 cliff dive...

ginunn's picture

Will this - should this - have any impact on their massive short positions in the metals precious metals markets?

Tarheel's picture

i imagine it would be terrible for gold and silver, but would provide a great buying opp afterwards

midtowng's picture

Well it certainly helped precious metals today.

fuu's picture

Or the move in metals today helped with the decision to cease operations...

knukles's picture


They're probably trading those positions on behalf of some unknown client account......

barthezz's picture

Guess I need to start my phd now that the free money is gone or I apply at the FED... BPS is still hiring...

BlackBeard's picture

Sr. Ethics Specialist, fuck yeah!  Kick up the feet....

firstdivision's picture

Trader position open as well

koaj's picture

NYFRB Trader job description:

-normal hours are 8-4

-come in and set Atari to "BUY EVERYTHING"

-put your feet up and play Tetris for the rest of the day

-at 4p, turn off Atari

What_Me_Worry's picture

What, no porn?  Eff that, I'm going to the SEC then.

Sudden Debt's picture

If you want, I can mail you a PHD template where you can fill in whatever you want and print it.

For the gold seal, you can try to find something in the bonbon box that looks like a seal.

Kaiser Sousa's picture

Tyler -

if true what does this portend for the ownly (freudian slip) 2 forms of real money?


Shameful's picture

This could be really funny if true.  Would love to see the action of them closing out the commodity positions. Need more info.

Sudden Debt's picture

Funny thing is that CITI just started a commodity propping desk. Maybe they are playing tag team for the smoke and mirror act?

Voodoo-economist's picture

someone closed lots of positions during the last dip, OI plunged quite hard. Maybe related if true. 

plocequ1's picture

What's going to happen to all the Umpa Lumpas that operate these pump machines? I guess they have to beg Willy Wonka to hire them back

StychoKiller's picture

They're finding positions with their cousins, the Grunka-Lunkas, making Slurm.

silvertrain's picture

 They are probably just relocating it to Singapore, Isnt that where there new Gold Bullion outlet is supposed to be started in September?

What_Me_Worry's picture

What kind of world are we living in where an honest American company, like JPM/Chase's commodity trading unit, can't go on making an honest living in America?  Courtesy of us giving them interest-free, risk-free loans of course.  Yet, it is still a sad day.

I will buy more puts, in their honor.

Hansel's picture

They don't want in these markets.  They just want a % of whatever you plan on doing in these markets.

Paper CRUSHer's picture

 JPMORGUEN.....the legend lives on.

Pondmaster's picture

EST 11:55 silver prices took a noce slide shortly after lunch (in New Yorks finest cafes )

firstdivision's picture

Some great comedy on BBTV with Jeremy Siegel giving his usual stand up routine.

aldousd's picture

JPM appears, even through the crisis, to be good at anticipating future political fallout. Perhaps this is an indication that prop traders are about to get politically gang raped by the bully pulpit.  I'm not defending them, per se, but they have been politically savvy, and have remained just a few steps ahead of the rest of the pack for the past few years on that front.  This is not a commentary on what a sad state of affairs we're in when politics determines the course a gigantic corporation will take, but simply an observation.

No One's picture

I doubt JPM is anticipating anything. I am willing to bet that Obama's team lobbed a friendly call to President Dimon. You know, a little heads up...