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.