Now They're F*d (JPM And Probably Others) in [Market-Ticker]

Posted 2012-05-10 17:09
by Karl Denninger
in Banking System

Now They're F*d (JPM And Probably Others)

Oops...

JP Morgan is blaming "hedging" for a monstrous mark-to-market loss, presumably with their "whale" (the big credit trader that was blamed for actually moving markets a few weeks ago.)

By definition if something is a hedge then it's balanced by a gain somewhere else.

So this was not hedging -- it was speculation and there's only one thing worse than speculating -- that's unintentionally speculating!

"Fortress balance sheet" my ass.

JP Morgan getting trashed after hours, the S&P futures are off 11 points and the Dow is off almost 100.

Discussion below (registration required to post)

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User Info	Now They're F*d (JPM And Probably Others) in forum [Market-Ticker]
Widgeon Posts: 13481 Incept: 2007-08-30 Region formerly known as the United States	Just a Rogue Trader. Nothing Some Owebamibucks Won't Patch Up. I imagine Max is doing cartwheels. 2012-05-10 17:18:09 Permalink
Twainfan Posts: 148 Incept: 2010-12-01 Minnesota	The only nicer bunch it could happen to is Blankfein and co. Might have to make some popcorn and watch the show. 2012-05-10 17:20:47 Permalink
Gamma Posts: 5592 Incept: 2008-01-20 Northern CA	I suggest this could be a triggering event. Yes, we've seen so many of them, all up to now ignored. But the mark-to-fantasy is utterly critical to the current delusion. Triggering event. ---------- This stuff we're going through, this is nothing compared to the Middle Ages. They told me if I voted for John McCain, an idiot would be a heartbeat away from the presidency. Sure enough... 2012-05-10 17:21:33 Permalink
Dashingdwl Posts: 9764 Incept: 2007-06-26 los angeles	Good thing it's after hours. Should be all cleaned up by the morning. ---------- When you are hard and disciplined, you can be principled. People fear you because they have no leverage against you. It's the truest form of Liberty. 2012-05-10 17:24:25 Permalink
Genesis Posts: 130799 Incept: 2007-06-26	Indeed we have trouble now. ---------- I don't care* if it makes sense -- only if it makes money. -- Me* Bank (n): See scam, fraud and theft. *Eat a bankster -- they're low-carb.* *What part of "shall not be infringed" was unclear?* 2012-05-10 17:24:41 Permalink
Ghopper Posts: 2317 Incept: 2011-06-11 Staten Island, NY	There's more than enough customer money to cover the losses...unless they lost THAT already. 2012-05-10 17:25:23 Permalink
Eaglewwit Posts: 6054 Incept: 2007-11-30 SoCal Banned	Quote: Good thing it's after hours. Should be all cleaned up by the morning. Sad but true, probably only get about 5 points of the SnP tomorrow. 2012-05-10 17:25:43 Permalink
Jstanley01 Posts: 8182 Incept: 2008-07-30 San Antonio, Texas	ook... ---------- You can't cheat an honest man. ~P.T. Barnum 2012-05-10 17:28:36 Permalink
Murf Posts: 4486 Incept: 2007-08-28 MurfCon Warning Level: Arrogance II	From what Fast Money is saying about the conference call, I think Dimon is trying to use this announcement to call out their competitors on mark to market. Also, the hedge of $2 bil. loss versus $1 bil. gain means someone else might be stressed. ??? ---------- The money has already been lost. Someone has to book it. 2012-05-10 17:34:21 Permalink
Lowbeyond Posts: 16938 Incept: 2008-02-11 CO aka West NJ/East CA	dow + 300 ! lol ---------- Maybe it was a birdy bread-bomber from the future?! 2012-05-10 17:38:48 Permalink
Gamma Posts: 5592 Incept: 2008-01-20 Northern CA	This could still, I say by way of reiteration, be a triggering event. NOBODY has taken nor admitted taking M2M losses yet! Nobody! ---------- This stuff we're going through, this is nothing compared to the Middle Ages. They told me if I voted for John McCain, an idiot would be a heartbeat away from the presidency. Sure enough... 2012-05-10 17:39:29 Permalink
Murf Posts: 4486 Incept: 2007-08-28 MurfCon Warning Level: Arrogance II	what Gamma said ---------- The money has already been lost. Someone has to book it. 2012-05-10 17:41:06 Permalink
Dashingdwl Posts: 9764 Incept: 2007-06-26 los angeles	JPM shorted ES at noon today in preparation. They are going to be fine. ---------- When you are hard and disciplined, you can be principled. People fear you because they have no leverage against you. It's the truest form of Liberty. 2012-05-10 17:42:02 Permalink
Lowbeyond Posts: 16938 Incept: 2008-02-11 CO aka West NJ/East CA	zerohedge wrote.. and just for some clarity on how this occurred. We know the poisitions that Iksil held were in IG9 (more likely to be tranches) but this $2bn loss comes from a tiny 12bps decompression in the index - which means the DV01 must be huge...(as we already knew given the massive rise in net notional that we warned about)... 12 bps? and 2 billion kaput?! whoa. ---------- Maybe it was a birdy bread-bomber from the future?! Last modified: 2012-05-10 17:45:36 by lowbeyond 2012-05-10 17:42:52 Permalink
Blairkiel Posts: 1344 Incept: 2009-08-25	Wait a second...just so we aren't missing something. Oil companies take "losses". When they hedge oil at 100 bbl and the price is actually 105. It certainly isn't a loss. Is this the case here? 2012-05-10 17:43:02 Permalink
Leicestersq Posts: 221 Incept: 2009-10-12 UK	Can someone help me and tell me what it was that they managed to lose some money on? $1 billion doesnt sound like a lot of JPM's capital, unless there is more or some sort of systemic problem. 2012-05-10 17:46:12 Permalink
Jstanley01 Posts: 8182 Incept: 2008-07-30 San Antonio, Texas	Blairkiel, it depends on how you look at their barrels, a quarter full or three quarters empty. ---------- You can't cheat an honest man. ~P.T. Barnum Last modified: 2012-05-10 17:48:09 by jstanley01 2012-05-10 17:47:35 Permalink
Rentier Posts: 195 Incept: 2010-06-19	"Timber!" Might be the event that pushes the market over the edge of the cliff. 2012-05-10 17:47:59 Permalink
Enapa Posts: 1165 Incept: 2008-01-25	Dow off 150+ at the open. Will close flat to up 10-15. 2012-05-10 17:51:29 From PDA Permalink
Ghopper Posts: 2317 Incept: 2011-06-11 Staten Island, NY	Somewhere, Max Keiser is laughing his ass off. 2012-05-10 17:51:58 Permalink
Vitchilo Posts: 4635 Incept: 2011-04-27	Please. If every bank did REAL mark-to-market, most of them would go under immediately. And at worst, the traitors at the FED will save Dimon... http://jhaines6.wordpress.com/2012/03/26.... Quote: Jamie Dimon CEO of JP Morgan Chase Threatens Life of Jon Corzine of MF Global This is from Keiser... Basically give us your money from segregated accounts or die... And from the MSM proving that Corzine ordered the money to JPM... http://www.bloomberg.com/news/2012-03-23.... Quote: MFs Corzine Ordered Funds Moved to JP Morgan, Memo Says Corzine either knew he wouldn't be prosecuted... OR he did it to save his own life. Don't screw with Dimon, he's a gangster. ---------- "Every normal man must be tempted at times to spit upon his hands, hoist the black flag, and begin slitting throats." -- H.L. Mencken Last modified: 2012-05-10 18:04:43 by vitchilo 2012-05-10 17:55:09 Permalink
Ponzi_unit Posts: 8121 Incept: 2007-09-05	I wonder if JMP went net short before the call? ---------- Taxpayers witnessed a crime and stayed around long enough to get charged with it. 2012-05-10 17:55:21 Permalink
Blurtman Posts: 563 Incept: 2009-01-24 Banned	Time to find another MF Global piggy bank to raid. "Get Corzine on the phone!" ---------- I have a reading comprehension problem and the owner banned me for repeatedly displaying it after being warned. 2012-05-10 18:10:17 Permalink
Spigot Posts: 253 Incept: 2009-03-02 North East	"Hull Breach!" ---------- Drip, drip, drip... 2012-05-10 18:13:06 Permalink

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