JPM losses increase...

kabayiri

Generali wrote: »

....they've had to sell the 'organ' part of their name
...

Actually, it's the company trying to be seen as charitable and public spirited by becoming an 'organ' donor.


[I'll get mi coat]

IronWolf

Good time to buy JPM? P/E of 6 and 70% of book value.

Did pretty well even during the financial crisis.

DiggerUK

I read of bankruptcies and just follow the reports.
Neither happy or sad am I at the news.

But if JPM goes down, I will be so happy to see the end of all the silver nuts arguments.
So, just on this one ocasion, I do hope they will be just the right size to fail.

This story has along way to go, we don't know the half of it.
..._

IronWolf

JPM are far too big to fail, they're the biggest bank in the US by assets.

MacMickster

Generali wrote: »

....they've had to sell the 'organ' part of their name

Sounds like they now need a lifesaving organ donation.

chucky

Generali wrote: »

I think that this was a prop trade or perhaps a series of them that was disguised as a hedge.

What is clear is that it is not possible for all of the losses to have come from JPM's CDX position as is being claimed as the market simply isn't large enough for them to have lost that much money!

Will this bankrupt JPM? Probably not. It will put a nasty dent in this quarter's profits though.

It's going to be a number of different trades and can't see it being a hedge unless the they got the hedge completely wrong in the opposite way and it went wrong. That would be virtually impossible though.

Also, as it's a CDX they would have had a position through the CME, Markit or ICE clearing house which meant their margin would need to be managed and they would cover it somehow otherwise they would have had to stop trading. Again very unlikely this has happened.

I think the reported loss amount is the exposure rather than the actual loss. Until it all comes out we just don't know and are assuming.

Generali

chucky wrote: »

It's going to be a number of different trades and can't see it being a hedge unless the they got the hedge completely wrong in the opposite way and it went wrong. That would be virtually impossible though.

Also, as it's a CDX they would have had a position through the CME, Markit or ICE clearing house which meant their margin would need to be managed and they would cover it somehow otherwise they would have had to stop trading. Again very unlikely this has happened.

I think the reported loss amount is the exposure rather than the actual loss. Until it all comes out we just don't know and are assuming.

The reported loss size comes from JPM themselves from the conference call.

chucky

Generali wrote: »

The reported loss size comes from JPM themselves from the conference call.

That's one of hell of a messed up trade then!!

Generali

chucky wrote: »

That's one of hell of a messed up trade then!!

And some!

Now of course people are trying to work out what the trade was. It is harder than you'd think to lose that sort of money in a single trade.

For a start you need to find people with deep enough pockets for you to trade against.

Generali

Morgan Stanley (and goodness knows why they think they know) reckon losses could end up as big as $5,000,000,000.

JPM still aren't saying what the losses are in. Can't say I blame them.

Rumour has it that it was a trade that started out as a hedge which then started making money. As Proctor & Gamble (the soap people) found out, that can be a very seductive and dangerous thing.

Again as the rumour goes, the trading desk started trying to make a little money by taking positions that were larger than strictly necessary.

Whatever the truth, it's all good clean fun. Gotta love a big loss by your rivals.