JP Morgan Has Zero Trading Losses In The First Quarter

Tyler Durden's picture


Earlier it was Bank of America reporting a perfect trading quarter, with profitability on 60 out of 60 trading days, and now it is JPMorgan's turn. Moments ago, Jamie Dimon's firm filed a 10-Q in which, among other things, it announced than in the quarter ended March 31, it was profitable on 63 out of 63 trading days and had one day in which it gained more than $200 million, or said simply another case of trading perfection unmatched anywhere in the known universe except perhaps by sellers of newsletters on Twitter. It was not immediately clear why JPM got a freebie of three extra profitable trading days in the quarter compared to BofA, although we suspect Jamie Dimon's presidential cufflinks may have something to do with it. What is clear is that the probability of one firm trading without error for an entire quarter, let alone two (and soon more as other banks file their 10-Qs) is slim to quite slim. Although not nearly as slim as whoever the hot chick is on Dancing with the Stars this season, which we are confident is the only thing the bulk of the population cares about. For everyone else, there's E(rror free)-trade.

Going further back in time, we find that JPM had a winning trading accuracy of:

  • 84.3% in 2012
  • 89.6% in 2011
  • 95.0% in 2010
  • 83.9% in 2009

This compares to Bank of America's:

  • 97.6% in 2012
  • 85.6% in 2011
  • 90.0% in 2010
  • 88.0% in 2009

Or, since 2009, BAC's winning trade hit rate is somehow even better than that of JPM, at 90.8% compared to 88.9% for the firm that is in charge of Tri-Party repo. The chances of this occurring, considering the traders at Bank of America (including those from Merrill) are the butt of every joke on Wall Street and certainly far inferior to the traders from a firm which until the London Whale assumed it had an unlimited balance sheet, are also slim to quite slim.

Perhaps related to all of the above, and for those curious if the recent reports of regulatory action against Blythe Masters will lead to anything, this is what the firm had to say about its ongoing legal entanglement with FERC:

FERC Matters. The Federal Energy Regulatory Commission (the “FERC”) is investigating the Firm’s bidding practices in certain organized power markets. In March 2013, the Firm received a Wells-type notice that the FERC staff intends to recommend that the Commission bring a possible enforcement action against J.P. Morgan Ventures Energy Corp. (“JPMVEC”), JPMorgan Chase & Co. and certain Firm personnel relating to alleged violations of FERC rules and the rules of certain independent system operators. Additionally, in November 2012, the FERC issued an Order suspending JPMVEC’s market-based rate authority for six months commencing on April 1, 2013, based on its finding that statements concerning discovery obligations made in submissions related to the FERC investigation violated FERC rules regarding misleading information.

The first to figure out what a "Wells-type" notice is (a Wells notice that is not really a Wells notice if one has presidential cufflinks perhaps?) gets a tour of the JPMorgan gold vault. As for anyone harboring any hope that Blythe Masters may spend even a minute in prison, your chance of seeing the JPM gold vault first hand is equally high.

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Wed, 05/08/2013 - 17:37 | 3542646 W T F II
W T F II's picture

They are excellent at what they do.

Wed, 05/08/2013 - 17:43 | 3542673 uno
uno's picture

Enron used to be good like this, whatever happened to them, did they change name to JPM

Wed, 05/08/2013 - 17:45 | 3542685 Stackers
Stackers's picture

wow, these guys are almost as good as DC politicians are at investing and trading.

Wed, 05/08/2013 - 17:47 | 3542697 FL_Conservative
FL_Conservative's picture

Like shooting fish in a fucking barrel.

Wed, 05/08/2013 - 17:55 | 3542729 Rainman
Rainman's picture

Got a hunch they are skinning one hell of a lot of muppets, pension funds...alive.

Wed, 05/08/2013 - 18:29 | 3542815 Ness.
Ness.'s picture

That's why Jamie has more money than you.  He even told you so.

This shit needs to end.



Wed, 05/08/2013 - 18:47 | 3542872 NewThor
NewThor's picture


I made a video for ZEROHEDGE

Dow 15000 Now. Dow 20000 Soon. Who can fight the beast?




Wed, 05/08/2013 - 19:17 | 3542927 Pure Evil
Pure Evil's picture

How long before we see ads in the wee hours of the morning imploring us to buy JP Morgan's six CD set, "Learn to trade the Jamie Dimon way".

If not that, maybe we'll get links in ZH posts redirecting us to work from home processing JPM's successful trades. We'll read how someone's mother's sisters cousin made X dollars by using the Jamie Dimon trading system.

Wed, 05/08/2013 - 19:22 | 3542940 Herd Redirectio...
Herd Redirection Committee's picture

'A Wells-type notice' doesn't disrupt the algorithms, I guess.

Wed, 05/08/2013 - 20:34 | 3543148 HelluvaEngineer
HelluvaEngineer's picture

I watched it and liked it.  I'm pleased to see you are from TX.

Wed, 05/08/2013 - 22:43 | 3543446 Next to Arch Stanton
Next to Arch Stanton's picture

Enjoyed the video - perhaps on your next one, you could slow down the pace of the images.  I wanted to read the captions on each one.   Had trouble listening and looking at same time, but that could be my special issue.

Thu, 05/09/2013 - 03:37 | 3543783 TheFourthStooge-ing
TheFourthStooge-ing's picture

NewThor said:

I made a video for ZEROHEDGE

Dow 15000 Now. Dow 20000 Soon. Who can fight the beast?


Good job.

I was sort of expecting it to end with a musical outro using this song:

Wed, 05/08/2013 - 18:02 | 3542758 johnnymustardseed
johnnymustardseed's picture

When you get free money from the FED. How could you not make money?

Wed, 05/08/2013 - 18:19 | 3542786 tdag
tdag's picture

That's about as surprising as a hooker with crabs.

Wed, 05/08/2013 - 18:29 | 3542825 Tijuana Donkey Show
Tijuana Donkey Show's picture

That's why they all shave the kitty these days, it keeps the crabs in the ocean. 

Wed, 05/08/2013 - 18:12 | 3542782 Oldwood
Oldwood's picture

And don't forget Madoff! He had an unmatched winning streak. We jsut need to follow around uncle Warren and everything should be good.

Wed, 05/08/2013 - 19:24 | 3542945 DaveyJones
DaveyJones's picture

they also used to create subsidiaries, loan them money, then list that as assets on their books. I wish I coud be that successful. I think the only thing Enron and JP have not done is kidnap girls and lead them around the backyard in dog collars, but I can't be sure

Wed, 05/08/2013 - 17:48 | 3542702 HelluvaEngineer
HelluvaEngineer's picture

At this point, they are all just rubbing our noses in it.

Wed, 05/08/2013 - 19:38 | 3542993 max2205
max2205's picture

The sec would be at your door if you hit 100%. But not the ultimate insiders. This shit is fucked up man

Wed, 05/08/2013 - 22:58 | 3543479 philipat
philipat's picture

And here was I believing that Prop Trading had been banned. Perhaps they meant "Hedging client positions". According to Blythe "We don't take diectional positions. It would be wrong and we don't do it".

Thu, 05/09/2013 - 02:02 | 3543742 Wile-E-Coyote
Wile-E-Coyote's picture

Spooky, its as if all trading is now done by computer, human error removed................... that's ridiculas!!

Wed, 05/08/2013 - 17:37 | 3542647 Lost Wages
Lost Wages's picture

Insider trading makes you a genius.

Wed, 05/08/2013 - 18:20 | 3542800 TheFourthStooge-ing
TheFourthStooge-ing's picture

Well, when you're the one who's running the Three-card Monte game, you damned well better know which card is the queen.

Wed, 05/08/2013 - 18:36 | 3542841 SpeakerFTD
SpeakerFTD's picture

Is this clean P&L, Tyler?  If not and it includes market making P&L, you would expect to be profitable well over 90% of the time, especially for a diversified IB.

Wed, 05/08/2013 - 19:02 | 3542904 ZeroPower
ZeroPower's picture

Of course this relates (mostly) to their market-making activities, discretionary plays a very small role (a la CIO office...). Not hard to be constantly profitable when youre buying on the bid and selling on the offer, especially in which case for illiquid assets YOU dictate what they are exactly. A shame that readers outside the industry won't understand this.

Wed, 05/08/2013 - 19:15 | 3542924 Cacete de Ouro
Cacete de Ouro's picture

Moregaine: Guaranteed to prevent trading loss on 63 out of 60 days..

Wed, 05/08/2013 - 19:26 | 3542955 Herd Redirectio...
Herd Redirection Committee's picture

Buying the bid means:  I name the price, then I pay it. 

Selling at ask: I sell for the asking price.  I do not sell at the price you are bidding = aka market value.

What you are saying is they fill the orders, they manipulate the market, and they take the best 'deals' for themself, right?

Wed, 05/08/2013 - 19:21 | 3542937 SpeakerFTD
SpeakerFTD's picture

Yeah that was my interpretation.   Which makes this the whole article seem shrill.

The irony is that the more you force IBs to shed prop risk (ala Volcker), the more you would expect to see daily revenues approach 100% positive.

Wed, 05/08/2013 - 19:26 | 3542958 DaveyJones
DaveyJones's picture

That's weird cause Jamie told me that being a genuis is what makes you an insider trader

Wed, 05/08/2013 - 19:55 | 3543045 HeavyShadow
HeavyShadow's picture

They know how to eat the face off a muppett, no doubt...

Wed, 05/08/2013 - 17:38 | 3542652 Bay of Pigs
Bay of Pigs's picture

These guys are the biggest crooks to ever walk the Earth.

Wed, 05/08/2013 - 17:46 | 3542688 Cdad
Cdad's picture

Close.  That honor goes to none other than Ben Bernanke...with Abe/Koroda trying to move up and take that title from him.

As always, thank you Ben Bernanke for this wasteland you have made for us, for destroying return on our savings, and for helping DC and giant crony capitalistic companies break the back of the true employers in this country...small business.  Oh...and hell of a job there...destroying the purchasing power of your currency, too.  

Wed, 05/08/2013 - 17:59 | 3542746 TeamDepends
TeamDepends's picture

Let's indict/citizen arrest him and prosecute him in Jackson Hole, cowboy style.  Yee-haw!!!

Wed, 05/08/2013 - 18:12 | 3542780 JohnnyBriefcase
JohnnyBriefcase's picture

Do it and lets all see how quickly you get Dzhokhar-ed™

Wed, 05/08/2013 - 18:43 | 3542862 TeamDepends
TeamDepends's picture

So what?  Better to die on your feet than to live on your knees.

Wed, 05/08/2013 - 18:50 | 3542877 JohnnyBriefcase
JohnnyBriefcase's picture

I totally agree with you as long as you ensure that you actually die. Being tortured and eventually suicided by the feds isn't the way I want to go out.

Wed, 05/08/2013 - 17:49 | 3542708 W T F II
W T F II's picture

"biggest" is just a term inflated by the inordinate growth in M2

Wed, 05/08/2013 - 17:39 | 3542659 kaiserhoff
kaiserhoff's picture

The Squid for the Trifecta?

Wed, 05/08/2013 - 17:44 | 3542679 Major Major Major
Major Major Major's picture

You are kidding, right?  Goldman will be profitable on 65 out of 63 trading days.

Wed, 05/08/2013 - 20:00 | 3543053 HeavyShadow
HeavyShadow's picture

Huh? That's not right...there is two extra days in'd have to create th...oh wait...sorry...they're doing Gods work...laws of time and physics do not apply here...


My apologies.

Wed, 05/08/2013 - 17:41 | 3542668 Mojeaux18
Mojeaux18's picture

Well isn't it based on what you intended to do?

"I meant to lose money today." or "We lost money in that stock so we lowered our risk."

Wed, 05/08/2013 - 17:41 | 3542669 PontifexMaximus
PontifexMaximus's picture

May I ask the tinfoilhatquestion: why doesn't their advised clients have a result close to their's, close, such as +/- 5%?

Wed, 05/08/2013 - 17:43 | 3542675 bobnoxy
bobnoxy's picture

Who do you think is on the other side of their trades?

Wed, 05/08/2013 - 18:04 | 3542762 SAT 800
SAT 800's picture

Your retirement fund.

Sat, 05/11/2013 - 14:27 | 3551740 Raging Debate
Raging Debate's picture

B"H! Ghost from space! It is time Alan. Last we spoke I was first and you were last. Now I am the last of my kind of our species, we evolve en mass in 2052. 40 years, oh the dimensional parralels!

I have tools ready for quantum computing King of Israel. Since your first, the Son eagerly awaits meeting you. And dont be sad for not recognizing your Son at first. I chose to evolve and that choice requires pain.

I have the plan to show you and I need a board advisor/chairman for our company. But first we have some private matters to attend to such as restoring your honor and splendor. No servant of such caliber deserved the humiliation you suffered.

You await my coronation but my coronation will wait 9 months. This is your coronation good Sir. I'm on my way, see you VERY soon. . 603-953-3388 :/)
"To be or not to be , that question is irrelevant" some things just ARE

Wed, 05/08/2013 - 18:26 | 3542816 Lets_Eat_Ben
Lets_Eat_Ben's picture

I am

Sat, 05/11/2013 - 14:32 | 3551753 Raging Debate
Raging Debate's picture

I AM also. "to be or not to be" socratic logic 2*2 fractals + 1 (random variable set) = 5th dimension . Oh boy is the world going to be so happy!

Wed, 05/08/2013 - 20:12 | 3543089 yrbmegr
yrbmegr's picture

I take Muppets for 800, Alex.

Wed, 05/08/2013 - 17:58 | 3542742 SAT 800
SAT 800's picture

That reminds me of the old joke; a Wall Street worker takes his little boy to town to see the lower end of Manhattan Island; and he points out the NY Yacht Harbour, telling his son, and that's where the brokers keep their yachts, son"; and the little boy asks, where do the customers keep their yachts, Daddy?. This question has never been satisfactorily answered.

Sat, 05/11/2013 - 14:34 | 3551763 Raging Debate
Raging Debate's picture

I'll answer that SAT 80" . The client yachts are in the 4th dimension where infinite dreams are made.

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