JP Moron - How to lose 2 billion bucks on a single trade

purch

I've heard that it was Bruno Iksil who was driving the SUV with blacked out windows :eek:

princeofpounds

For anyone interested in the actual dynamics underpinning this whole sequence of events, worth looking at this blog, and the websites it links to.

http://dealbreaker.com/2012/05/the-tale-of-a-whale-of-a-fail/

purch

Generali wrote: »

It's also worth noting that you can't just sell to nobody: if JP Morgan want to hold this short they need to have people that want the same total sized long position.

I tried explaining that last year, but it appears they can't get their heads around the concept.

It would have been easy money if you could buy and sell stuff without a counterparty....

Mine @ 50
Yours @ 75

.......money for old rope.

I knew I was going badly wrong somewhere :eek:

Thrugelmir

Most interesting fact I've seen is JPM have single handedly saved the UK mortgage market. As they've bought around 90% of securitised mortgage debt issued since 2008.

Seems they've the funds after pulling billions of $ from Europe.

The_J

Saved? Saved? Are JPM a charity or something?

UK debt is extremely attractive, house prices hold their value better here, defaults/repossessions are relatively rare but when they happen they are pretty straightforward with little media interference.

That's why Santander/Nationwide(cf Silverstone)/Lloyds etc. have used securitisation to recapitalise ever since the house prices levelled out. In the case of Nationwide specifically it gives them more capital to poach a greater market share.

Thrugelmir

The_J wrote: »

Saved? Saved? Are JPM a charity or something?

UK debt is extremely attractive,

90% to a single buyer?

Not globally attractive. The BOE has concerns over the wholesale money markets. Bearing this fact in mind understandably so. As more debt comes up for refinancing.

sabretoothtigger

Sounds like they were hedging the entire worth of the firm. I count JPM as canny operators usually
I think they also have hundreds of billions in cash so we're unlikely to see anything dramatic happen but with skeletons like this maybe they are not as healthy as they appeared

Hence the stock is a value trap, yields 3.3% :cool:


All these banks regularly take big risks, some might say this is their job to venture where many dare not. GS just loaned 3bn to a firm with negative cashflow of 12bn this year

Also JPM absorbed Bear Sterns didnt they? So maybe they picked up some bad habits. That was back when HBOS got shorted -20% in one day all the way down to 400p http://www.guardian.co.uk/business/2008/mar/20/hbosbusiness.businessqandas
Extreme risks are normal now, quit fretting :beer:



Shorting JPM

worldtraveller

How to lose 2 billion bucks on a single trade........

........The New York Times reckon it could reach $9 billion!

Hey! What's the odd few billion bucks nowadays anyway? :rotfl:

ChrisDuane

Some are saying it could be a lot more.

Why the big change now? It used to be the JPMorgan had a free ticked to do whatever they wanted. They took a load of account holders money from MFGlobal just before they went bankrupt and were allowed to keep it. Leaving account holders thinking never to hold funds anywhere where there is counterparty risk ever again.

Now why are JPMorgan no longer under the do whatever they want and get away with it umbrella?

sabretoothtigger

Ever watched RussiaToday on tv they said for years JPM was going broke, not from this but for short selling silver

I always watch them for the devils advocate point of view.

They took a load of account holders money from MFGlobal just before they went bankrupt and were allowed to keep it

Sounds normal, the biggest creditors get paid first. Taxman then biggest dealers with MF global then the scraps maybe get left to fight over by the little guys.

Most brokers here are covered for their money like savings I think. Robbie Burns had 100k or so with MF but withdrew some on the day, he was left waiting for the rest.

I myself am owed money from a bankrupt broker. The CEO left and they found out the company had spent client funds. The liquidator hasnt said what percent can be recovered


http://www.kpmg.com/UK/en/IssuesAndInsights/worldspreads-special-administration/Pages/Outcome-ofinitial-creditors-and-clients-meeting.aspx

http://www.kpmg.com/UK/en/IssuesAndInsights/ArticlesPublications/Pages/mfglobaluk.aspx