This page has been archived and commenting is disabled.
JPMorgan... Or Long-Term Capital Management?
This, too, is why Jamie Dimon is richer than you:
Compare and contrst to the performance of LTCM just before it had to be bailed out, ushering in the modern era of of Too Big To Fail.
»
- 30171 reads
- Printer-friendly version
- Send to friend
- advertisements -
Greenspan should have let market forces operate in 1998, BernanQE will have no choice this time.
No choice?
What makes you think that a man, whose ONLY trick appears to be easing liquidity in one way or another, will attempt to solve this in any other way this time around?
Bernanke will print till the cows come home, and then some.
@EscapeKey
The Law of Diminishing Returns is harsh and unforgiving. The marginal utility of BernanQE's printing is dropping each day. It's a Sissyphian task that will end badly....
LTCM goes under and over 50 hedge funds spring up to take their place. Lemmings squared.
"The year-to-date losses reported by the
CIO climbed from $719 million in March, to $2.1 billion in April, to $4 billion in May, to $4.4
billion in June, and then to $6.2 billion in December.566 Since JPMorgan Chase transferred
many SCP index positions to its Investment Bank on July 2, 2012, the total amount of losses
associated with the Synthetic Credit Portfolio will likely never be known."
From page 87 of the Senate Subcommittee Report
http://www.hsgac.senate.gov/download/report-jpmorgan-chase-whale-trades-...
JPM already got bailed out for this. Those "offsetting trades" Jamie expained as why they didn't take big losses on the quarter were JPM selling overpriced garbage to the Fed. QE3 and QE4 were in part a response to the havoc that Jamie Dimon wreaked on the system in this trade. ANd the havoc is not getting better. It is festering.
On a LONG enough TIMELINE... CAPITAL MANAGEMENT drops to zero...
... and JPM will KEEP GETTING BAILED OUT.... until the first trash can comes through your (and my) front window. At that point, the 10 seconds to call 911 would be better spent loading double-ought.
just 'POINT & CLICK'...
I am enjoying watching Jamie do the "roper doper"...
I'm betting JPM finishes up on the day at a new multi year high... just because
When does Blankfein's Jewish bank get to buy up JP Morgan for pennies on the dollar?
Not gonna happen. JPM is the opposite face of the FED in the Janus sandwich. JPM is the commercial trash collecter/recycler for the FED. If Goldman Fags were to buy out JPM they could no longer be a rogue dealer. Try to remember, Goldman is akin to Madoff without the concern of being carted off to prison.
Sometimes trading incurrs losses. That's the nature of the game. Companies like JP Morgan generate most of their profits from providing world class services to investment professionals and governments. Their trading desks are reserved for the brightest Ivy League graduates, and losses are more than compensated for by the stellar trading performance of other desks.
Thanks MBD. You owe me a keyboard. My coffee sprayed all over the place.
If he changed his name to BillionDollarBonus he might be believable.
"world class investment services" include the website being unavailable for hours at a time due to hacking incidents
http://www.zerohedge.com/news/2013-03-12/chasecom-hacked
Luckily the idiot is only being snarky, otherwise we'd have to go after him with torches and pitchforks.
Makes you wish for the good ole days of Vlad the Impaler.
Or 100trillionZimbabweDollarBonus_
Their 'MILLION DOLLAR BONUSES' are earned by their relentless capacity to shill...
MDB - you are either a master of sarcasm or a day trading ad writer.
Wry humor to gut-busting giggles.
Oh MDB, you never fail to provide the smiles.
Man, I have missed you!
Zero Hedge! ALL YOU NEED TO LOOK AT
No one focuses on what prices are being paid by the gov't for the assets from the banks. The real joke behind the scenes!
Don't forget the JP Morgan Chase aka the Chase part = The Rockefellers agents for you know who in Amerika plus owners of big oil.
What's sad is when you think of all the areas on the planet that need real capital investment, these guys throw tens of billions of dollars at this synthetic, made-up, bullshit, hypothetical, derivative paper, instruments.
Diminishing returns? How do you judge that?
If those numbers started shrinking, one could always modify the model.
Sort of like the investment banks calculate risk.
and Capital
Banks make money screweing taxpayers. Banks are like Carnival Cruise lines. You sign your life away & waive any rights, get on a rusting hulk of a ship, get lousy food that the pigs on the ship love, get plastic bags to shit in.
Maybe Carnival is on to a new fad. Think how much water can be saved by taking a shit in plastic bags. Climate control with a twist.
are you sayign we should throw Barnanke's dead nakid body into the town square? Or this that his wife's job?
He will have plenty of time to write with his syphilitic brain capacity.
Or, maybe not.
An Exponential Bitch. Whether at 3% or 30%, just a matter of time. Sooner or later the Junkie hits the wall.
Really, it's probably already happened, the facade is all that is left.
"There is no means of avoiding a final collapse of a boom..." L von M.
The fact is, none of this was a 'mistake' that people are now trying to figure out how to repair....it was a planned takedown from the beginning and now they're in the 'monetize the debt' phase, and that's always the last phase.
The money supply (M0) will continue to increase. What may change is the reason given for the need to continue. Death by hyperinflation is the only way a fiat currency ever dies.
Correction: hyperinflation is the only way a fiat currency ever lives
Too big to fail started earlier than 1998..The congress critters should have let market forces work back in 1979 when they bailed out Chrysler. Market forces are great until they become an inconvenience to TPTB.
Not to mention the dead Kennedy's.
Jello Biafra for President! He hates Nancy Pelosi too...
With this kind of financial news DK is the only appropriate music (California Uber Alles, Holiday in Cambodia, etc). Maybe we can get Jello to update lyrics, like "Viva las HFTs".
Too big to fail started earlier than 1998..The congress critters should have let market forces work back in 1979 when they bailed out Chrysler. Market forces are great until they become an inconvenience to TPTB.
TBTF started much earlier than 1979...
http://en.wikipedia.org/wiki/Reconstruction_Finance_Corporation
The RFC was bogged down in bureaucracy and failed to disburse much of its funds. It failed to reverse the growth of mass unemployment before 1933. Butkiewicz (1995) shows that the RFC initially succeeded in reducing bank failures, but the publication of the names of the recipients of loans beginning in August 1932 (at the demand of Congress) significantly reduced the effectiveness of its loans to banks because it appeared that political considerations had motivated certain loans.
+1
& All one needs to know about LCTM is that its principle shareholders were NOBEL PRIZE WINNING ECONOMISTS, Myron Scholes and Robert Merton.
If I were a statistician, I would posit a correlation between Nobel Prize Winners and Moronic con artists.
Monetary policy has nothing to do with how poorly a bank performed - it concerns the overall economy; if it turns out that JP Morgan isn't managing themselves as we'll as thought, and if that affects the overall economy, then Bernanke will need to do more to help the recovery.
The best way for bernake to help the US economy would be to kill himself.
LOL Hari Kari with a letter opener?
Taking bids to be Bernanke's second.
True poetry would be Ben diving headfirst into a fully-powered-up printing press.
Do more to help the recovery? What has he done to help at all? All he has done is print money which makes the spectre of deflation breathe that much harder down our necks. Inflating bubbles was the problem in the first place. Equilibrium will be had whether by consent or conquest, er, I mean, free market forces.
True poetry would be Ben diving headfirst into a fully-powered-up printing press.
The resulting FRNs would truly be BernankeBux.
I vote for immolation on a pryamid of $100's
We could make it a pay per view event. We could havle the national debt just on that...
Didn't you take any English composition classes when you were chasing your PHD in Economics?
I am a fine writer.
a wine frighter
If you are going to troll, at least annoy the Randian fucktards. But something tells me that you ain't up to the task....
I am not here to annoy anyone - I am here to educate.
Thank You ~ based on your teachings, I have come to fully understand the definition of the word 'ANNOY'...
Paul,
You here to educate yourself. I understand.
let me guess, crank up USD printing press, Break some windows. Did i get it all?
You forgot about the extraterrestrial invasion.
You forgot to mention that JPM needs to be held to more rigorous accounting standards.
The financial industry is the mst regulated industry in the U.S.A. - it is more highly regulated than the medical industry - the S.E.C. and FINRA make sure of that.
Yes, the SEC sure has a way of regulating porn sites.
Oh I suppose we should also congratulate the SEC on the fine job they did with the MF Global affair. That Corzine walks a free man speaks volumes of their competence.
Congress found nothing wrong with Jon Corzine's actions.
Well, I guess it's all kosher then.
Corzine makes "segregated account" money "vaporize", and the Obama administration - who find "nothing wrong" with "Mr Campaign Contributor" Corzine's actions - wants to patrol citizen bank accounts.
Dr. Krugman, how can you carry the water for that corzine? you frineds with him too?
Actually, I think you're amazing. I almost believe you really are Krugman! Do you do stand-up?
Have you seen the posts from MillionDollarBonus?
You're right, Kruggy. The Finance industry is the most highly regulated criminal enterprise on the planet. Of course, enforcement of those regulations is a bit wanting.
Their enforcement is fine too--enforcement of us. Imagine if you started your own company and began flogging shares. You would see how strong their enforcement is.
Thank you for educating us on the theory.
How is the Fed going to "help the recovery" if the banks, which are the transmission mechanism for that monetary policy, blow up, as very neary happened in 2008? The Fed NEEDS them or they have no way to effectively implement their monetary policy. Ergo, monetary policy must ALWAYS have as a core component keeping their own transmission mechanisms (the banks) properly maintained and cared for. Only after that priority comes 'helping the economy.'
Best part of your comment:
"if it turns out that JP Morgan isn't managing themselves as we'll as thought, and if that affects the overall economy, then Bernanke will need to do more to help the recovery."
Thank you for your honesty in confirming that banks will get bailouts to infinity if there is ever trouble again in the future. Name one TBTF bank which would NOT affect the "real economy" if it managed itself poorly and got into financial trouble. Was the lesson of '08 not convincing enough that the entire system can not support the failure of a SINGLE larger institution (Lehman)? Was there also not ample proof that the shockwaves such an event sends out through counterparty obligations is more than large enough to freeze the entire world credit market as solid as a Minnesota lake in January?
NAME ONE TBTF BANK FAILURE THAT WOULDN'T INSTANTLY RISE TO THE LEVEL OF REQUIREMENT THAT YOU YOURSELF SPECIFIED. NAME ONE.
The banks can do whatever they want USING YOUR OWN LOGIC. Take wild risks and succeed- they keep the money. Take wild risks and fail- the Fed will pull your cookies out of the fire. So congrats, you just DEFINED PERFECTLY WHAT MORAL HAZARD IS, HOW IT MANIFESTS ITSELF AND THE RISKS IT ENTAILS.
Douchebag fake Doc Paul.
We must make sure the banks are liquid so they can continue to lend, but it is only half of the solution. I have advocated for further stimulus programs that would help create jobs - infrastructure projects and whatnot - to help the economy recover.
...and what happens then, when the banks stop lending because their portfolios are crippled by bad loans (but this is obviously masqueraded by suspension of various mark-to-market rules)?
Ben can help out then, too.
With the magic printing press, no problem is insoluble!
That is the reason for the Fed's current MBS purchase program - we want to make sure the lenders can continue their operations and finance the economy.
And you think the MBS bonds the Fed has bought have been bought at market prices, or do you think it's worked out as an effective subsidy for the big banks?
The prices reflect the market, and are thus fair.
Now THAT'S what I call fine trolling!
Your avatar's smug smirk is perfect, too. Keep it up!
But that's what happened (and is still happening) turned out to be the source of the problem. Because of perpetual 'free money' deliveries, loans are often misallocated or are directed to subprime garbage without fear, without taking appropriate risk and consequent accountability. In addition, easily obtained money is invested into leveraged derivatives producing artificial bubbles at sole discretion of speculators. Such bubbles thus don't characterize the actual condition of underlying assets, services, goods at all as they were inherently created within the derivative realm in a casino style.
This all inevitably happens when there is no any responsibility whatsoever. If banks know that nothing can happen to them by further proceeding with malinvestment and gambling being saved by getting additional cash ‘on demand’ and thus in fact rewarded for failures, no wonder we've ended up in this mess. What is worse, the whole financial system is set to intentionally encourage banks in such behavior.
The problem we are facing has nothing to do with liquidity but with accepting of unacceptable and outright unaccountable behavior. Guess who is taking profit from it.
Frankly, I don't think I wrote a single line Paul Krugman wouldn't be already aware of long ago.
I'm with you Dr. Krugman.
Let's have Ben send $40 Billion per month to taxpayers (tax free) because then they can spend more on consumption, banks will have more deposits, States will get more revenue from sales taxes, and politicians will have support to encourage the FED to spend more - say $80 Billion per month to taxpayers - which will just get the economy really humming. Kind of a "trickle up" approach.
I hint sarcasm; but I am all for a new stimulus.
So, let us know - at which debt/GDP ratio would you be concerned about excessive debt?
Japan is above 200%, and they're fine, so we should not concern ourselves with our debt/GDP right now.
Japan's situation is very different to that of the US.
But you didn't answer the question. Saying "we should not concern ourselves" is not an answer. It's evasion.
So, come on. Give us a percentage.
All situations are different, but it is a good example of the length and breadth of the debt/GDP ratio.
Personally, I find debt/GDP bit of a ridiculous indicator to start with. Because one can't simply tax everything at 100% and *boom* that's your income. The debt/income ratio is much more revealing.
Japan's debt/income level is about 1800%. And you think this is the model the US should adopt.
http://www.zerohedge.com/news/japans-wtf-chart
As their economy recovers their income will rise, they will issue less debt, and they will pay back the debt as revenue increases.
And what happens then WHEN - not if, WHEN the interest rate increases?
Rates will increase when the Fed knows the recovery has taken hold.
we were speaking about Japan
what will the BoJ do, to ensure market rates do not cross the - event horizon - 100% debt interest/income ratio?
I wrote this above; maybe you missed it:
The average maturity on Japanese debt is about 6 years, which means their refinancing needs are about 35% of their GDP on an annual basis (and rapidly increasing). If market rates were to progressively increase to say, 5%, then it would be game over very quickly.
Ignoring very real risk is completely irresponsible. But then, so is advocating progression of debt/GDP ratios to historical heights and pushing even further as well.
And so the Bank of Japan will continue to use proper monetary policy to finance a recovery.
Print, essentially.
Print until rates are lower.
their whole rationale is print until real growth occurs ALL over first world. Vain dream.
It has one grave error : Debt ridden first world cannot grow based on big outsourcing model as this further feeds endemic import + energy fed debt.
Without a new energy frontier which is locally generated and cheaper than imported arab/third world oil/gas we have to cut back on debt as no growth is truly possible.
This to reestablish that other structural constraint which is runaway trade imbalances.
And if the rot continues and arab oil stays king for western imports the petrodollar gets dumped by China rising and satellites or BRIC think alikes.
DR K or his false avatar, cannot answer that question.
Speaking of Japan - interest rates will not be allowed to increase... at least, not in Yen-denominated debt.
I suspect the same applies to USD debt too.
Debt to GDP is a bit of a ridiculous indicator because it's a stock/flows comparison and furthermore takes no account of interest rates or the average maturity of the debt.
However, in attempting to make predictions it can still be useful if we compare levels throughout history a la Rogoff and Reinhart... not that I've got round to reading their book yet :-p
do you recall the highest debt to GDP Percentage ever to be "repaid?" without defalting?
England at 130%. I say thats the The Maginot Line
Again, Japan is higher, and that shows where we should concern ourselves with any line.
hows your waistline?
...if memory serves me right, that was ONCE in history, as the industrial revolution kicked off. British WW2 debts were mainly inflated away.
What is the statistical likelihood of another industrial revolution kicking off right about now?
your correct, its the one and only time.
Ask the Picts they hid behind Hadrian's wall. They never defaulted to Pax Romana. When Rome crumbled they danced in their kilts and ate haggis.
Maybe we should name the Qataris as heads of UK central bank and then by mergers and acquistion the problems of UK would be over; and we would have Boris going and saying his prayers at the Shard Mosque like a latter day convert to new religion of City; which would NEVER impose interest on its loans and bet their skins on every leveraged play like good moslems in accordance with Sharia.
The rest of the UK would be totally agnostic and celebrate the Beatles singing "we all live in a yellow submarine" as their national anthem while they watched football paid and financed by Oil barons...What more can the UK ask for except to make UK totally compatible with Syria and invite all those ex-oligarchs of Assad to come live in Park Lane once the war is over as Non DOM moneybags full of $$$$.
We could send Tony Blair to Afghan or Irak to clean out the latrines until hell froze over. Thats what Profumo allegedly did after he got shafted on account of Christine K.
Past history is such a pointer to what needs to happen to those who lie and then cut and run like the Roadrunner.
N'est ce pas Jamie?... "I'm still standing!"
You are doing a good job playing the Krugman bit on this site. What do you think Krugman would answer if asked "how much more stimulus do you think the economy can withstand before you think it becomes detrimental?"
Another question that all of us ZHers want to also know is: "Do you jerk off wearing a Krugman mask while staring in the mirror or what? "
I was hoping you were posting to announce your imminent suicide
Answer Nodebt's simple question you dick.
They like stimulus at the SEC as well-hence all the visits to porn sites.
Hey everyone, if you go read some of (the real) Krugman's articles and imagine they are written by this sarcastic one, they have two levels of humor and become 4 times as funny!
Fake Krugman and MDB_ should get their own blog to write these Keynesian satire responses to ZH articles just to see how many CNBC anchors, journalists and real Krugmans steal and run with it.
Dr. Krugman what are you doing drinking scotch during business hours? Do you actually re-read what you write? I'm not defending banks in any way, but when you have some dikwad with a printer buying every F..king piece of paper known to man, to keep rates/ROI(excluding equity markets) low, it's safe to assume Monetary policy has an effect.
EG; The > DoW-SPX-DAX-ASX200-Shanghai ect... I think your cat needs a bath!
Indubitably it does, ie - it's safe to assume Monetary policy has an effect; the point is to maintain a functioning economy while a recovery takes hold. The Fed has demonstrated the need to keep the banks lending, and they do this by not only instilling confidence in the system, but by shoring up their balance sheets so they can continue to play a pivotal role in the financing of firms.
When the recovery is on track, the Fed will unwind their positions, and rates will rise. This will allow the Treasury to issue less debt, and the increased revunue will pay back the already issued debt.
There's a lot of lending going on at the corporate level. I don't see much at the 'main street' level. Bernanke is purchasing $85b per month of treasuries and MBS (supposedly). http://www.zerohedge.com/news/2013-03-09/fed-injects-record-100-billion-...
The only thing I'm confident about is the continued soaring prices of 'Food and Energy'. The fed will never unwind their positions as that would mean certain death to their equity market (weath effect) experiment. Interest rates will explode and far offset any increased revenue. The Chinese can't wait for the windfall on their treasury holdings.
Is there room for more than one troll on ZeroHedge? MDB has cornered the market so far, you're going to have to up your game to compete.
The problem with "monetary policy" is the second word there. Police human action as panacea? Bennynuts is really smarter than all the market players in the world? Why, the anointed sonumofagun!
If that boy was really that Omnipotent, he's have Buffet cleaning his toilet. Not the other way around.
Fcuk! He ain't gonna win any popularity contest! 49 drowners at last count.
Not any relation I wonder!
Is that all a lousy Nobel prize gives you.
No respect at all?
ALL THESE BAILOUTS ARE DESIGNED JUST TO ROB THE USA AND HER PEOPLE OF THEIR ASSETS AND TO ENSLAVE THEM AND THEIR CHILDREN FOR NOW AND FUTURE GENERATIONS.
ANybody want to bet silver will close today at 29.00 plus or minus a nickel?
Green yes....red no.....
Maximum close 28.99, minimum 29.80
Like this time?
http://jessescrossroadscafe.blogspot.com/2013/03/greenspan-no-irrational...
I wish that two-faced bag of bones would just spontaneously combust; preferably when he's next to Bernanke.
Clearly nobody involved had ever heard of "situational bias" at the time... (I'm rich therefore I'm smart — just like John D. Rockefeller comforting himself that God had made him rich due to his piety.)
There is NO FUCKING WAY the the Bernank will let any TBTF bank go down. Hence the "TBTF" unofficial label.
How anyone can think Ben won't print till the rollers fall off or the keyboard typists fingers bleed is insane.
You can add the DJIA or S & P to that mix as well.
End of story.
A'la Monty Python:
"I'm not quite dead yet." or "I think I'll go for a walk."
Jim Rickards would be proud
Mr Rickards was General Counsel for LTCM: http://www.zerohedge.com/article/ltcm-general-counsel-us-stared-near-cat...
Mr Ricktards has also advised DOD and CIA. I'm wondering what the hell to make of this. He calls da Bernank an even bigger threat than osama but works for the DOD.
Maybe he's trying to secure a spot for himself? I don't know. Maybe taking the same route as KB and avoiding the wrath of the U.S. elite? Anyone have any perspectives?
Imho, Currency Wars was published to tell the Chinese publicly that the US is aware of their actions in the financial sphere (derivatives positioning, gold hoarding etc.).
It also was a public signal by the military and intelligence complex (DOD, CIA et al.) to the US financial bureacracy (FED, Treasury) that they don't agree with their actions.
Interesting observation..............
Equally interesting is/was the twitter war btw Rickards and ZeroHedge..........mostly by Rickards.....Lauren Lyster even mentioned it on one of her shows....
I haven't seen this twitter war. Could you provide some links? Thanks!
https://twitter.com/JamesGRickards/status/273495952353030144
Both ZH and Rickards need to be read and discussed. Just finished Rickards book (third reading) and although all does not jive 100% with each and every ZH "manifest doctrine" there is clear agreement on the fragile state of things now. His relationship with the MIC simply gives me more insight. His book was a best seller in China and that's a sharp perception that the book was written to show "I know that you know that you know that I know".
There is disagreement over the elaborations or predictions of the future state between thinkers, but it is disagreement that benefits us all as readers and followers and fellow thinkers and I hope it lasts.
I agree with what you say................
I often wonder if Rickards book was in response to Song Hongbing book of the same/similar name which came out in 2007............
http://en.wikipedia.org/wiki/Currency_Wars
My bad for calling it a war............more of a tit-for-tat and again mostly by rickards.......I do not have links. I have not been on twitter all year. What I observed, happened in 2012.........too many tweets to go thru to provide links.
Ricktards is very ambivalent. He is obviously buddy-buddy with certain quarters of the Pentagon. He probably wants to be Treasury Secretary when the military take over. He is a knee-jerk miltarist certainly - was moaning about the effects of the "sequester" on defense spending. Among his predictions for 2012 were:
- war with Iran in May (later August)
- collapse of the British gilt market
- revaluation of the yen
And why has he not appeared on King World News for more than a a year when Eric King earlier referred to him as the KWN "resident expert"? Must have pissed off some influential KWN sponsors.
I noticed his absence from KWN as well. His strong military positions certainly don't line up with a lot of positions held by other guests. Celente clearly comes to mind. Schiff too.
He's been very quiet lately in general. He didn't just stop appearing on KWN.
His Iran prediction is owed to his military/intelligence connections. My impression is that these circles are ready for war, but are waiting for the White House / State Dep go.
The gilt issue was off on timing, but I guess he'll be proven right soon. The question is how long the BOE is able to keep rates low without totally crashing the GBP.
The YEN call was spot on.
I think this is pretty telling of his connections
https://www.youtube.com/watch?v=kdPkaCTdxBU
Here's the long version of this video:
https://www.youtube.com/watch?v=fW3fZzfHEX4
Rickards declares his relationship to MIC. He outright declares in his book his previous role with a primary bond dealer, his contribution to financial security wargames, and that if the Fed/Treasury complex doesn't back off, the mess in this country may be something that the Pentagon has to come in and clean up using Pentagon tools. We know what those are and they are not nice. He presents a path toward stability with the caveat that no one actually knows what will happen next. He values gold very highly in his scheme.
Is it misinformation?
History will prove that one way or another. We are still gathering facts.
No problem. Just have Ben print whatever was lost & all would be well.
Her we go again and again.............
looks the the ny fed is determined to ramp JPM stock today ... show CONgress who is in charge
There are a lot of rumors that LTCM was heavily short gold and got caught on the wrong side of the trade.
http://scribd.com/doc/16554654/8/Long-Term-Capital-Management%E2%80%99s-...
That could be another parallel between JPM and LTCM
LTCM....couldn't borrow unlimited money from Bennie!
jpm IS the fed
Those presidential seal cufflinks are a way of shoving it in all of our faces. You just know these fuckers are laughing their asses off at us behind closed doors.
Nooses are too merciful. We'll need to find something more creative.
Please see Akak for creative torture techniques McMolotov. :)
But LTCM had all those PhDs in economics with Nobel Prices sprinkled around.
Only up to May 15, 2012, eh ?
Was it completely closed out on May 15 or has it plunged further ?