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Putting It Into Perspective: Bruno Iksil's $100 Billion Position Makes Him The Seventh Largest Bank Holding Company By CDS Exposure

Tyler Durden's picture




 

With the story of Bruno Iksil refusing to be swept under the rug (for now), we had the urge to show just how his position stacks up in comparison to the CDS holdings for all the bank holding companies tracked by the Office of the Currency Comptroller. Recall: "Iksil may have built a position totaling as much as $100 billion in contracts in one index, according to the market participants, who said they based their estimates on the trades and price movements they witnessed as well as their understanding of the size and structure of the markets." We used a log scale index although even in simple linear terms the story is quite straightforward: we are not sure what is worse - that one trader may have amassed a CDS position (with an associated VaR that is in the billions) which is greater than the combined holdings of all except for 6 banks (and is greater than the combined CDS exposure of a Wells Fargo among others), or that the top 5 banks together account for 96.5% of all CDS holdings? One thing we are certain of, is that JPMorgan's $71 trillion in assorted derivatives is all purely for hedging purposes. After all Dick Bove just said so.

Source: OCC

 

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Mon, 04/09/2012 - 16:56 | 2329316 Seize Mars
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When Blythe said, "no" or "none," she meant, well, a lot.

Mon, 04/09/2012 - 17:04 | 2329339 spiral_eyes
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New preview from Nassim Taleb (on this meta-topic, the problem of taking the upside without risking the downside):

http://www.fooledbyrandomness.com/prologue.pdf

Mon, 04/09/2012 - 17:09 | 2329356 Xibalba
Xibalba's picture

I'm sure the regulators are on it.  

 

 

:?  sarc

 

 

 

 

Mon, 04/09/2012 - 21:38 | 2330053 LongSoupLine
LongSoupLine's picture

 

 

 

"What the ever loving hell is a "CDS""?!? - The SEC

Mon, 04/09/2012 - 17:11 | 2329371 LawsofPhysics
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Someone needs to let her know that we "are not" constructing a guillotine, or several of them.

Mon, 04/09/2012 - 17:31 | 2329409 Zero Govt
Zero Govt's picture

...indeedy, we are not amused 

we want the truth, the whole truth and nothing but the full multi-$Trillion Dollar balls-up that JP Morgan is in ...ha

Mon, 04/09/2012 - 17:37 | 2329429 slewie the pi-rat
slewie the pi-rat's picture

@seiZe_m_r_s:  When Blythe said, "no" or "none," she meant, well, a lot.

apparently, she pulls this on everybody!

i think she's hot b/c she's a nympho, a sizeQueen, and a switch-hitter

plus, she has a grrreat little ass!

Mon, 04/09/2012 - 17:58 | 2329472 francis_sawyer
francis_sawyer's picture

She was a dude... The aforementioned guillotine chopped the dick off (but it grew back)...

Mon, 04/09/2012 - 18:32 | 2329554 slewie the pi-rat
slewie the pi-rat's picture

weren't you here the night she showed up and got gang-banged?

she was a true sport, even as the asians gave her facials

and that grrreat equestian ass, too

if she gets too far into that goody-goody side, she may re-emerge here, just for psychological needs...

what a dreamer!

Mon, 04/09/2012 - 21:26 | 2330013 stocktivity
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Stock up on popcorn. When this thing blows, it will be interesting to watch.

Mon, 04/09/2012 - 16:58 | 2329319 Lost Wages
Lost Wages's picture

Sounds like JPM needs to invent the Bruno Iksil Mutual Fund so we can all get in on this action.

Mon, 04/09/2012 - 17:17 | 2329380 Manthong
Manthong's picture

They probably already have an under-the-counter Iskil CDS.

We need Iskil ETF's complete 3X Bull and Bear Iskils.

Then we need an Iskil Volatility synthetic.

Hell, since everything's all Vegas anymore make it just like craps with a 10X Iskil.

Come on now, somebody step up to the plate! 

Mon, 04/09/2012 - 16:59 | 2329322 Dapper Dan
Dapper Dan's picture

JP Morgan is "winning"

They have the longest pole thingy.

Mon, 04/09/2012 - 17:08 | 2329353 HD
HD's picture

"They have the longest pole thingy"

 [Insert Santorum joke here]

Mon, 04/09/2012 - 16:59 | 2329324 Grin Bagel
Grin Bagel's picture

please define who this individual is in the world you and I inhabit, and what it means beyond the good comments of your overview.

Mon, 04/09/2012 - 17:21 | 2329390 12ToothAssassin
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and his residential address

Mon, 04/09/2012 - 17:02 | 2329327 francis_sawyer
francis_sawyer's picture

Where's my invite to his Liverpool nightclub "champagne room"?

Mon, 04/09/2012 - 22:54 | 2330255 GMadScientist
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Evidence impounding.

Mon, 04/09/2012 - 17:01 | 2329328 Cdad
Cdad's picture

Seriously, just sell the derivative  portfolio, and then with the cash proceeds, buy lots of plywood...and nail the front door of EVERY JP Morgue house shut.  And then the rest of us can finally get on with some real economic recovery. 

 

Mon, 04/09/2012 - 17:20 | 2329388 Koffieshop
Koffieshop's picture

JPM is part of the inner core of the circle jerk. The Fed will never allow them to fail. JPM will stay in business until the hyperinflation event.

Mon, 04/09/2012 - 18:59 | 2329641 LawsofPhysics
LawsofPhysics's picture

"JPM will stay in business until the hyperinflation event"

Precisely.  Remember, JPM is the Fed and has a play on all sides of this.  They even "deliver" foodstamps.  Be a shame if that entitlement suddenly got turned off now, wouldn't it?

Mon, 04/09/2012 - 20:28 | 2329841 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

JPM even delivers unemployment benefits in Texas. God bless the Man. (More like fuck him!)

Mon, 04/09/2012 - 17:02 | 2329330 Forgiven
Forgiven's picture

Bruno Iksil with such a high level of CDS exposure?!  Sounds like the setup for a rogue trader scandal at House of Morgan....

Mon, 04/09/2012 - 17:04 | 2329342 Lost Wages
Lost Wages's picture

He's got the name of a scapegoat.

Mon, 04/09/2012 - 18:00 | 2329476 francis_sawyer
francis_sawyer's picture

yeah but he makes Wells Fargo look like pikers...

Mon, 04/09/2012 - 19:05 | 2329659 brettd
brettd's picture

Takes the pressure off Corzine.

Mon, 04/09/2012 - 17:03 | 2329334 HD
HD's picture

Bove might as well put on a cheerleader outfit and grab some pom-poms and chant "We've got spirit yes we do, buy bank stocks and they'll screw you! Gooooooooooooooooooooo BANKS!"

Mon, 04/09/2012 - 17:03 | 2329335 knukles
knukles's picture

Dick Bove is a fucking idiot.

The propaganda machine is scraping the bottom of the barrel.
Seige of Staligrad, anyone?

Mon, 04/09/2012 - 17:34 | 2329418 Zero Govt
Zero Govt's picture

we're not scraping the bottom, Bove is always first crone up

...the bottom is when they wheel out Jim Cramer

Mon, 04/09/2012 - 19:02 | 2329650 LarryDavis
LarryDavis's picture

Wapner, Bartiromo, Kudlow and Liesman have as good a command of the financial world as does a dog's dried ejaculate.

Mon, 04/09/2012 - 19:48 | 2329756 HD
HD's picture

Disgustingly true...

Mon, 04/09/2012 - 21:17 | 2329979 stocktivity
stocktivity's picture

It's 4 o'clock on Wall St. Do you know where your doggy is?

Mon, 04/09/2012 - 17:04 | 2329341 max2205
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Click. Boom

Mon, 04/09/2012 - 17:06 | 2329346 PontifexMaximus
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Don't you think that there are more Bruno's around with GS, Citi, BoA, DB, CS, UBS et al. They all want to be masters of the universe and make the world going round, or better, polish up their pa. Did markets take that into consideration?

Mon, 04/09/2012 - 17:08 | 2329347 LawsofPhysics
LawsofPhysics's picture

Jubilee bitchez.  Tyler, could we see a chart with the very same players and their PM holdings?  Pretty please.

 

Basically the message I get from this chart is "JPM has the most nukes".  Whether or not they use them is another issue altogether, but predictable if history is any guide.

Mon, 04/09/2012 - 17:11 | 2329369 francis_sawyer
francis_sawyer's picture

PM holdings?

Here are the only PM's these ones are 'holding'...

http://www.hamovhotov.com/picturegallery/?id=155&level=picture

Mon, 04/09/2012 - 17:14 | 2329375 LawsofPhysics
LawsofPhysics's picture

Not true.  JPM has PMs, many of them have been recently "re-hypothicated" from MF-Global.  It was JP Morgan after all who said, "Gold is Money, everything else is credit".

Sometimes the answer hides in plain sight.

Mon, 04/09/2012 - 17:23 | 2329394 francis_sawyer
francis_sawyer's picture

I'm not talking about the private vaults of it's PREFERRED fellows... I'm talking about what it admits to the public...

But we're talking semantics here...

Mon, 04/09/2012 - 17:06 | 2329348 francis_sawyer
francis_sawyer's picture

 "One thing we are certain of, is that JPMorgan's $71 trillion in assorted derivatives is all purely for hedging purposes. After all Dick Bove just said so..."

I'm pretty sure that grandpa Dick & grandpa Bernank spend countless hours 'hedging' each others chin fur... Krugman & Gartman are their understudies on 'certain' holidays... 

Mon, 04/09/2012 - 17:08 | 2329352 michigan independant
michigan independant's picture

So is this another fool and his money part story of this decade? Who would ever pay paper for paper is beyond me. 

Mon, 04/09/2012 - 18:11 | 2329498 slewie the pi-rat
slewie the pi-rat's picture

in paperPonZee as it is now broadcast, at least 6Bil are completely hypno, imo

ergo, it is the promise of future paper which motivates them

noShitoli, m_i_boyardee

others play for future "assets" now backed by paper in the IOUskie "markets" [but possibly worth "sovereign" wealth at some future point in this is fiatsco?  how do you "mark" yer markerZ?]

and, since they all "agree"?: canoes are sinking faster than bonds...  in spite of how insane it is to buy PMs, the banksters will buy all you'd ever want to sell, all day, everyday...

so, just get ready to sell & go away, next month...

what could possibly go wrong? 

btw, once your conoe sinks, do you still care?  me neither

Mon, 04/09/2012 - 17:11 | 2329355 DormRoom
DormRoom's picture

So ONE guy can gamble with 100B while mom & pop small businesses can't get loans.

 

America is fundamentally broken when Industrial icons like Howard Hughes are replaced by financial boy wunderkinds.

Mon, 04/09/2012 - 17:36 | 2329430 Catullus
Catullus's picture

What's broken is that because one guy can gamble with $100bn, mom & pop have to take out loans to run the business.  Whether they get them or not is a different story.

Mon, 04/09/2012 - 18:44 | 2329538 slewie the pi-rat
slewie the pi-rat's picture

at least he wasn't drunk from golf like that brit who blew out the oil market a coupla years ago...   jeeeez! that was funny!

i usta play extremeToxicGolf and once came home, somehow, from aforemntioned idiocy, put a pizza in the oven @ 450F and went to bed

the next morning i had a little, dark, ceramic disc

if anybody has any money, we could patent the process and start a company to mummify poeple after the goobermint votes them out

or radiation victims~..~energy-saving, btw

if they had lottsa tats or ?, we could display them...

plus, think of the soap!

Mon, 04/09/2012 - 23:03 | 2330272 GMadScientist
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No. One guy can buy contracts that amount to a notional value at risk (i.e. an imaginary valuation, at best) of $100B.

This pissant is still spit in the ocean (1/568th of the JP Morgan tower of derivative shit) until he gets past counter-party risk and actually collects a dime.

And Hughes ended up nuts pissing in bottles so he didn't have to leave the house; choose wisely.

 

Mon, 04/09/2012 - 17:22 | 2329392 mendigo
mendigo's picture

Thar she blows!
Very cool: set up one guy to take the fall for all of Europe.
Pure genious but I fear Tyler has spoiled the surprise.

Mon, 04/09/2012 - 18:53 | 2329626 slewie the pi-rat
slewie the pi-rat's picture

leave it to theMorgue to supply the dude to end the EU? 

ok...

Mon, 04/09/2012 - 17:31 | 2329404 tekhneek
tekhneek's picture

I have a hard time believing this is just one guy and not a handle for the big 6 to play see-saw on the market with and make $ off the top based on the swings.

I mean: It might look like 1 persons name, but it's probably a consortium under this guise.

Mon, 04/09/2012 - 17:37 | 2329421 Hansel
Hansel's picture

Also, I don't doubt JPM has a huge CDS prop position, but is this really the new standard of evidence?

... may have built... according to the market participants... who based their estimates on the trades they witnessed... as well as their understanding...

Mon, 04/09/2012 - 20:16 | 2329822 AccreditedEYE
AccreditedEYE's picture

Hansel, you've been keeping score on these pages longer than I have... I'm not really sure that any institution that has TBTF status deserves ANY benefit of the doubt...  

Mon, 04/09/2012 - 17:30 | 2329405 Catullus
Catullus's picture

At least the position is less than the annual GDP of Morocco.

That's the power of positive thinking!

Mon, 04/09/2012 - 17:32 | 2329415 SolidSnake961
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dont worry guys, it is a small position "net of hedges" haha

Mon, 04/09/2012 - 17:36 | 2329426 Obnoxio
Obnoxio's picture

This shows just how much of a rancid casino capital markets have become. A sickening show of JP Morgan's implied Federal reserve backing.

Mon, 04/09/2012 - 18:07 | 2329499 LawsofPhysics
LawsofPhysics's picture

JPM is the fucking Fed.  

Mon, 04/09/2012 - 17:43 | 2329440 The Axe
The Axe's picture

When you have 71 trillion in paper...you have no regulation...you are the man....no one well ever say shit...ever

Mon, 04/09/2012 - 23:04 | 2330279 GMadScientist
GMadScientist's picture

Hahahaha.

Punk.

Mon, 04/09/2012 - 17:46 | 2329447 Downtoolong
Downtoolong's picture

No doubt this qualifies him for a personal exemption from position limits by the CFTC and a personal exemption from the Fed for commercial bank risk management practices. They're probably working on the letters right now.  Next thing you  know Fannie Mae will be giving him a $10 billion mortgage loan commitment at the Fed overnight funds rate so he can buy Buckingham palace and convert it to his private residence. 

Mon, 04/09/2012 - 17:47 | 2329452 icanhasbailout
icanhasbailout's picture

Why do his competitors let him live?

Mon, 04/09/2012 - 18:02 | 2329486 MiguelitoRaton
MiguelitoRaton's picture

If Bruno is right, JPM scores big. If Bruno is wrong, JPM gets bailed out. If I were Bruno, I would take that bet too.

Mon, 04/09/2012 - 18:08 | 2329502 rawsienna
rawsienna's picture

Why does any bank have a need to sell protection as a "hedge".  Are they not long enough credit risk?  Do they need to get longer? Very fishy.

Mon, 04/09/2012 - 18:14 | 2329515 carbonmutant
carbonmutant's picture

CNBC is like the WWE. It's Financial entertainment TV.

"Our analysts are trained professionals. You should never try to emulate what they do in your own portfolio."

Mon, 04/09/2012 - 18:13 | 2329517 q99x2
q99x2's picture

What is wealth? When will Bruno have the time to enjoy a thorough analysis Joyce's Dubliners or Nietzsche's Zarathustra?

Ok. Maybe racing fighter jets or a trip to outer space has that beat.

Anyhow Bruno ain't going to get nothing but a freakin headache trying to collect on all those CDSes.

 

Mon, 04/09/2012 - 18:31 | 2329561 Sutton
Sutton's picture

Bruno Iksil, meet Joe Cassano.

 

Mon, 04/09/2012 - 23:04 | 2330281 GMadScientist
GMadScientist's picture

Joe, Bruno, meet Mr. Hollowpoint.

 

Mon, 04/09/2012 - 18:40 | 2329573 Racer
Racer's picture

the S will eventually HTF

as it always does...

dot com,

bubble house

tulips

nasdaq

and now they are buying apples or any..things in manic mode as if they were the best thing since... tulips or houses or   .......dots.....com

 

 

 

Mon, 04/09/2012 - 18:40 | 2329580 SillySalesmanQu...
SillySalesmanQuestion's picture

Jamie's Porking Masters

Mon, 04/09/2012 - 23:05 | 2330284 GMadScientist
GMadScientist's picture

Jerkoff's Pumping Manure

 

Mon, 04/09/2012 - 18:55 | 2329630 EmileLargo
EmileLargo's picture

We need more info. What side of the bet has he taken? Or are these the total gross position "netting out" to a much smaller amount in theory with JP taking a cut in the middle (we've seen before how that movie ends)? If he has underwritten CDSs for that notional, it may be time to short JP stock. The next five years will test the CDS market to DESTRUCTION. 

JPM may not survive the next five without an explicit bail-out if they have a $5.6 Trillion CDS exposure. Oh boy................this is going to get very interesting

Mon, 04/09/2012 - 18:57 | 2329634 Coldfire
Coldfire's picture

I feel a great disturbance in the Farce.

Mon, 04/09/2012 - 18:59 | 2329639 oogs66
oogs66's picture

Bove is an idiot but Bruno probably has a small fraction of the alleged risk

Mon, 04/09/2012 - 20:07 | 2329802 buzzsaw99
buzzsaw99's picture

As long as no counterparties cough, AIG, cough, default and allow cough, the squid, cough, to shake down the taxpayers then...

 

JPM execs will get bonuses no matter what happens, that's my prediction.

Mon, 04/09/2012 - 20:45 | 2329879 mark mchugh
mark mchugh's picture

"And I, Bruno, will drive 1000 feet into a block of cement....on my head even!"

http://www.youtube.com/watch?v=woH0Nhbc-fc

 

Mon, 04/09/2012 - 21:49 | 2330079 Bartanist
Bartanist's picture

To state the obvious: NONE OF THE F'N INTERNATIONAL CRIMINAL BRANK COULD EVER CLAIM A PROFIT IF THEY DID NOT ALSO CLAIM THAT THEIR RISK DID NOT EXIST ... due to hedging.

The global financial system is so far past rationality that no one dare acknowledge the emperor is bare naked and has a massive pustulent wart on his ass.

Mon, 04/09/2012 - 23:30 | 2330334 fcamargoe
fcamargoe's picture

The greatest trick the devil ever pulled was convincing the world he didnt exist.

Tue, 04/10/2012 - 00:56 | 2330441 Peter K
Peter K's picture

The thing that troubles me most is the fact that he's French. I hope he has at least one Rosbeef assistant:)

Mon, 05/14/2012 - 02:50 | 2422852 putaipan
putaipan's picture

and to think.... this was the post that started it all. popcorn indeed.

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