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Meet Wall Street's Gatekeeper To Hell: JPMorgan

Tyler Durden's picture





 

One name comes up again and again when we look back at critical tipping points in the financial system. Whether it is Lehman, WaMu, MFGlobal, or more recently Knight Capital's implosion, the house-of-Dimon is tied directly, in one way or another, to creating the crisis or offering 'help' to fix it. As the WSJ notes, the Knight CEO Thomas Joyce reached out "we're looking for help" and sure enough JPMorgan were more than happy to help (with just the right amount of vigorish of course) especially given their 'complicated' relationship with Knight (and MFGlobal) at the time of distress. Sure enough, after playing hardball for 2 days, they agree terms and Knight is saved (for now) but once again the bank-that-didn't-need-TARP fixes another tempest-in-a-teapot as the squid and the whale battle for global interconnected dominance.

WSJ: Knight Put Fate In Familiar Hands

For two days, J.P. Morgan remained on the sidelines while Knight turned to others for short-term financing to get through the week.

 

Knight and J.P. Morgan discussed the availability of a $200-million revolver, the term for a credit line that can be drawn and repaid so long as the borrower meets certain conditions. At the helm was J.P. Morgan, along with half a dozen other banks.

 

Knight's situation was precarious. It was relying on short-term funding, with circumstances changing too quickly to focus on accessing the facility before the weekend. On the morning of Aug. 3, Knight executives were still lining up funds until before the market opened.

 

"We needed to get through Friday in order to get to the weekend," Mr. Joyce told the Journal in an Aug. 6 interview.

 

In a stream of calls over several days to Mr. Hernandez and Michael Cavanagh, co-chief executive of J.P. Morgan's corporate and investment bank, other prospective lenders gained comfort, say people involved in the discussions. J.P. Morgan executives made it known they considered Knight's assets valuable enough to offset banks' losses even if the firm folded, the people say.

 

On that Friday at around 4:30 p.m., Knight officials contacted J.P. Morgan and said the brokerage intended to draw down the entire $200 million available through a revolving line of credit. On Monday morning, an exhausted Mr. Joyce called Mr. Hernandez to express his gratitude, say people familiar with the conversation. Knight was still alive.

 


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Thu, 08/16/2012 - 09:11 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

Oh damn.....the road to perdition is a six-lane superhighway.

 

Thu, 08/16/2012 - 09:16 | Link to Comment NotApplicable
NotApplicable's picture

Gatekeeper = Sentinel

Thu, 08/16/2012 - 10:18 | Link to Comment JPM Hater001
JPM Hater001's picture

Stunning.

Thu, 08/16/2012 - 10:30 | Link to Comment Daily Bail
Daily Bail's picture

Here's the Gatekeeper in Chief mouthing off a few days ago to JP Morgan Summer interns.

You would think with a reporter following him, he might be more careful with his words.

But not Jamie Dimon, Faux Capitalist.

Jamie Dimon Goes Ballistic: "This Is Not The Soviet Union. This Is The USA. It’s A Free. Fucking. Country."
Thu, 08/16/2012 - 12:11 | Link to Comment LMAOLORI
LMAOLORI's picture

 

 

Nice round up Daily Bail

Thu, 08/16/2012 - 09:05 | Link to Comment insanelysane
insanelysane's picture

La Cosa Banksta

Thu, 08/16/2012 - 09:33 | Link to Comment Metalredneck
Metalredneck's picture

"This Financial Institution of Ours?"

Thu, 08/16/2012 - 09:16 | Link to Comment LoneStarHog
LoneStarHog's picture

"At about 9 p.m. on Aug. 1, Knight Chief Executive Thomas Joyce called Carlos Hernandez to seek emergency funding from J.P. Morgan, the lead bank on a primary credit line, to plug losses from errant trades caused by a software upgrade..."

BULLSHIT!!!   BULLSHIT!!!   BULLSHIT!!!   BULLSHIT!!!   BULLSHIT!!!   BULLSHIT!!!   BULLSHIT!!!   BULLSHIT!!!   BULLSHIT!!!   BULLSHIT!!!   BULLSHIT!!!   BULLSHIT!!!   BULLSHIT!!!

Previous ZeroHedge Headline:  Knight Blames Trading Fiasco On "Dormant Program" Glitch

Software Upgrade ... Dormant Program ... or ... CRIMINAL ACTIVITY?????

Thu, 08/16/2012 - 09:06 | Link to Comment The Squid
Thu, 08/16/2012 - 09:07 | Link to Comment dannyboy
dannyboy's picture

It's one big club, and you ain't in it.

Thu, 08/16/2012 - 09:07 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Bet on the devil you know.

Thu, 08/16/2012 - 09:07 | Link to Comment Xibalba
Xibalba's picture

Next your gonna tell me that J. Dimon sits on the Board at the NYFRB.  yeha right....

 

 

Thu, 08/16/2012 - 09:14 | Link to Comment Wakanda
Wakanda's picture

The Morg:

"Lasciate ogne speranza, voi ch'intrate", or "Abandon all hope, ye who enter here" - Dante

Thu, 08/16/2012 - 09:09 | Link to Comment Racer
Racer's picture

"J.P. Morgan executives made it known they considered Knight's assets valuable enough to offset banks' losses even if the firm folded"

 

Translation: client money was valuable and easy enough to grab WHEN the firm will be put through the bankruptcy process

Thu, 08/16/2012 - 10:30 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

Could "assets" also mean patents on the algo's themselves?  That would be ... interesting ...

Thu, 08/16/2012 - 09:09 | Link to Comment apberusdisvet
apberusdisvet's picture

 

 

Question of the day:

 

Should they be disemboweled before they are hung, or is there a more appropriate punishment for unimaginable theft fraud and corruption, and the assassination of all those who stand in their way?

Thu, 08/16/2012 - 09:17 | Link to Comment LoneStarHog
LoneStarHog's picture

NO! ... It would be like in the movie Jaws, the fear that the "child" will be spilled upon the dock ... In this case, it would be the bodies of all the small firms and people who will come spilling out.

Thu, 08/16/2012 - 09:11 | Link to Comment mrktwtch2
mrktwtch2's picture

there is an old saying if your going to deal with hte devil remember to bring sunscreen..lol

Thu, 08/16/2012 - 09:13 | Link to Comment booboo
booboo's picture

Well you know it's bad when the wolves at the Morgue were paying the jackals at Goldman to stay away from the wounded taxpayer funded cash cow that was Jefferson County Alabama.

We need a modern day Elliot Ness and his Untouchables to clean house.

Thu, 08/16/2012 - 09:19 | Link to Comment Coldfire
Coldfire's picture

Shite Capital.

Thu, 08/16/2012 - 09:23 | Link to Comment BrigstockBoy
BrigstockBoy's picture

JPMorgan also happy to jump in and help with the formation of that Federal Reserve Bank that isn't really federal.

Thu, 08/16/2012 - 09:30 | Link to Comment Downtoolong
Downtoolong's picture

It's a mutual hostage market structure. If certain major players were to fall, they all go down. Can't let that happen. It's just like OPEC or any other cartel. The only ones who go down and stay down are their customers and invstors.

Thu, 08/16/2012 - 09:32 | Link to Comment Seize Mars
Seize Mars's picture

"the squid and the whale battle for global interconnected dominance"

Bullshit.

They are both the tools of the Great Eye.

 

Thu, 08/16/2012 - 09:35 | Link to Comment Nobody For President
Nobody For President's picture

You forgot to mention LTCM and Bear Tyler - JPM has been at the head of the line a bunch when a big financial outfit goes down. Can you imagine how secretly joyful a bunch of wall street biggies will be when it is JPMs turn to get carved up?

Thu, 08/16/2012 - 11:55 | Link to Comment zrussell
zrussell's picture

JPM carved up? That's like saying the Global Banksters are switching to the ice cream truck business.

and... make your choice:

Prez candidate A (GB puppet)

Prez candidate B (GB puppet)

Thu, 08/16/2012 - 12:10 | Link to Comment Nobody For President
Nobody For President's picture

LTCM

Bear Stearns

Lehman

All once invincible. And Bear and Leman had been around many years.

Every dog has its day. The day will come when JPM, through some combination of events, will be a little short and the wolves will come through the door in a big wave and carve it up. Recommended reading: When Genius Failed and/or House of Cards. The London Whale was the first tweak/crack in JPMs armour. By itself, won't do it, but the 'invincible principle' has been shattered. Given the right (wrong) circumstances, JPM can and will go down in a shockingly short time frame, with the New York Fed presiding.

Or maybe I'm all wrong about this, and the other banksters just love Jamie D and will do everything in their power to help him out if he gets JPMs ass in a crack and needs their help.

Thu, 08/16/2012 - 12:15 | Link to Comment Lost Word
Lost Word's picture

Is it the Squid, or is it the Octopus ?

Thu, 08/16/2012 - 14:47 | Link to Comment merizobeach
merizobeach's picture

The Fed is the Octopus.

Thu, 08/16/2012 - 13:11 | Link to Comment mkhs
mkhs's picture

Captain Hery Morgan would be proud of the honor they do his name.

Thu, 08/16/2012 - 19:26 | Link to Comment tip e. canoe
tip e. canoe's picture

maybe more like Cede & Co as the gatekeeper behind the gatekeeper?

but hey who's watching when there's a frontman with such charisma like JamieD.

"Look in this hand while i pull a piece of silver out my ass!"

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