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How Much Further For JPM?
While no-one knows exactly what the 'whale' trade was (we suspect a senior tranche trade tail-risk hedge whose risk-management hedging went pear-shaped), how much was done ($150bn notional seems consensus), and what the losses are likely to be (approximately $4bn is easy to see given the moves in IG9 10Y alone; though $9bn seems a stretch - albeit the kitchen-sink nature and perhaps inclusion of the losses from the long-book that this was supposed to be hedging - and the other positions that were used to hedge - may push it up to $6bn plus); we prefer to fall back to what has been a tested and true arbiter of JPM's underlying value (ex equity exuberance) - the CDS market. Given the current moves in prices, CDS appear to be looking for another 5-10% downside here before JPM's equity price is back in line with the credit market (of course this could also mean CDS needs to tighten aggressively or both). In the meantime, this message was brought to you by the acronyms DVA, LLP, CDS, and DV01; the number '9'; and the word 'book-value'.
Today's lesson - know what you don't know - you don't have to trade every name!
Charts: Bloomberg
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Pretty girl, excellent economic insight on Europe...another Kendall on the Economy video: http://youtu.be/1nGlP3IwrRs
why u lie???
OT, but in-line with today's market moves:
If you are investing in PMs correctly (as a proportional defensive store of your wealth), then the daily fluctuations in prices become less stressful (the fact that they are manipulated should no longer surprise or alarm anyone here). Might I offer an alternative to an old rhyme we are all familiar with as consolation:
Little Miss Muppet
Sat on her tuffet,
Eating her curds and whey;
Down came the SPDR,
And sat down beside her
And frightened Ms. Muppet away.
Simply, when price is down, that is a good time to increase your defensive store of wealth, if that is what you need. Be delighted, not frightened. In other words, BTFD.
my guess is when the games are over the loss will be in the 16B range - using the worldcom game as a guide.
Zombie bank
http://en.wikipedia.org/wiki/Zombie_bank
JP Morgan saved the US government once. JPM will be fine, at least until the USD becomes worthless. By that time, though, the nuclear bombs and missiles will have done what they were designed to do, so it won't matter.
As goes JPM so goes USA
JPM Chase shares fall as NY Times says trading losses may reach as much as $9B -- Washpost
http://dealbook.nytimes.com/2012/06/28/jpmorgan-trading-loss-may-reach-9-billion/
it's no one not noone
Noonan
Miss it!!
"there's nothing more fun than gambling with opm." J.DIAMON
AS MENTIONED BEFORE FOLKS ACCORDING TO SIMPLE MATHS THE LOSS OF JPM IS AT LEAST 10 BILLION USD AND COUNTING...AND WITH THAT THE SHARE PRICE SHOULD BE WORTH NO MORE THAN 28 USD A PIECE....
Further like Ken Kesey.
Jim Willie says the losses will continue to grow, and it cannot be controlled. They are done.
Unlike JPM i trade honest and small using the Contract For Difference as instrument.
if they get in deep doo-doo they'll clean up on their bond losses L0L!!!
i forgot to remember to forget that so i didn't write this b/c it's all priced in for today, but tomorrow is friday and 2Q-end, too
fungicide will catch some traction tomorrow, imo; yes, that is a US horsey
a little bit0'sugar helps the medicine go down...
On the macro chart, JPM looks to be heading to the 2009 lows. Bearflagish, topping tails etc at which point it will be a swing trade bounce. Not a long term investment opportunity.
A better chart is JNPR, which is almost at the 2009 lows and is what JPM is going to end up looking like. Before potentially going even lower. JPM that is.
"How Much Further For JPM/Chase?"
The word "inestimable" as in further losses comes quickly to mind.
Raise your hand if you bank with Chase. AHH...quite a few hands. Their "stake" in this scheme consisted entirely of your deposits, and it appears that the ultimate loss amount is still open-ended. That fact. added to the 80 trillion or so of derivitives exposure that had already been transferred to the deposit side of Chase over the objections of FDIC, and is senior to deposit liabilities might induce a prudent depositor to get the hell out of that corrupt TBTS bank.
Its all going as planned. Obongo and the communist world movement have a 3 phase attack planned out.
1. Banking/dollar/treasuries collapse
2. Class warfare
3. Race warfare
#2 are the Occuterrorists and notice they are the second wave. Its a Class Cold War and now the troops are in place. Many regular folk who loose everything during #1 wil be scooped up into the Occupy movement.
#3 is already happening in slow motion. The military term is LOW INTENSITY CONFLICT. There was a racial cold war prior to 2009, but now it is a "hot" war with chimpouts, flash robs and bongo parties every day in areas that have "vibrant nieghborhoods" full of "teens" and newsmedia "youths".
sorry double tap