Value Buy
Senior Associate
Joined: Dec 20, 2010 17:57:07 GMT -5
Posts: 18,680
Today's Mood: Getting better by the day!
Location: In the middle of enjoying retirement!
Favorite Drink: Zombie Dust from Three Floyd's brewery
Mini-Profile Name Color: e61975
Mini-Profile Text Color: 196ce6
|
Post by Value Buy on May 22, 2012 20:51:18 GMT -5
Ever wonder if the Fed is holding the other side of JPM'S trade? Since Jamie has gone off the reservation with this President, AND not following procedures laid out by the White House, Obama sent the Fed after them.
|
|
|
Post by jarhead1976 on May 22, 2012 20:54:12 GMT -5
With a $600 trillion derivatives market , credit default swaps , I can see where a few bIllion is a drop in the bucket. But if the fan gets turned on high it will resemble something like this.
Source: How Things Work
Jimmy to you "Pay up!" Imagine that you could purchase your friend Jimmy's health insurance policy from the company that issued it. Everything's going smoothly; you're raking in the dough as Jimmy makes his monthly payments. But things take a sudden turn for the worse after Jimmy's legs are crushed in a car wreck. Jimmy can't afford the healthcare costs, but luckily he's insured -- by you. You find nothing but cobwebs in your savings account and realize that you can't pay for Jimmy's health care. Jimmy's still insured (he's faithfully made his premium payments), so who pays the hospital bills? The insurance company sold the policy to you, and you owned it when Jimmy's accident happened. You were caught with the hot potato. Jimmy's hospital realizes his insurer won't cover his costs and releases him, but he still requires care. So Jimmy sues you to pay up, but you just blew all of your money completing your collection of Pat Boone albums, which suddenly doesn't seem like such a good investment. Even worse, a trove of Boone's albums was discovered in the estates of some recently deceased collectors, and the market value of your collection plummets. You sell the collection for half of what you paid for it and put it toward Jimmy's health care costs, but it's a drop in the bucket. Ultimately, you're forced to declare bankruptcy. Clearly, the sympathetic character here is poor Jimmy, who'd innocently taken out an insurance policy and is guilty only of suffering a car accident. But would he be as sympathetic if it turned out that Jimmy had purchased a couple of other people's insurance policies? And -- in a stunning turn of misfortune -- both of those people suffered a catastrophic accident as well. Jimmy's injured and out of work; he's got his own problems and can't pay out on the claims any more than you can. Jimmy declares bankruptcy, and the chain reaction continues ad infinitum. Now imagine this scenario played out on a global scale, with the health of multinational banks and corporations -- and the portfolios of untold individuals -- at stake.
|
|
skweet
Well-Known Member
Joined: Dec 23, 2010 13:49:27 GMT -5
Posts: 1,061
|
Post by skweet on May 22, 2012 21:04:23 GMT -5
"woulda shoulda coulda.....didn't."
You sound pretty certain of the coulda... I have my doubts. The government was pretty authoratarian in the crisis, and we sat by and let them be. They all but forced TARP (OK actually forced it on the big guys) on institutions, whether they needed it or not. They stole GM from a proper Bankruptcy order, and turned order of payments on it's head. When it hits the fan, they own everything, because we are a socialist nation, and our voting constituancy is happy being there.
|
|
djAdvocate
Member Emeritus
only posting when the mood strikes me.
Joined: Jun 21, 2011 12:33:54 GMT -5
Posts: 75,233
Mini-Profile Background: {"image":"","color":"000307"}
|
Post by djAdvocate on May 22, 2012 21:19:37 GMT -5
"woulda shoulda coulda.....didn't." You sound pretty certain of the coulda... I have my doubts. The government was pretty authoratarian in the crisis, and we sat by and let them be. They all but forced TARP (OK actually forced it on the big guys) on institutions, whether they needed it or not. They stole GM from a proper Bankruptcy order, and turned order of payments on it's head. When it hits the fan, they own everything, because we are a socialist nation, and our voting constituancy is happy being there. if you say so. i don't really remember it that way.
|
|
skweet
Well-Known Member
Joined: Dec 23, 2010 13:49:27 GMT -5
Posts: 1,061
|
Post by skweet on May 22, 2012 21:38:01 GMT -5
|
|
Deleted
Joined: May 18, 2024 2:17:09 GMT -5
Posts: 0
|
Post by Deleted on May 22, 2012 21:45:25 GMT -5
"Ever wonder if the Fed is holding the other side of JPM'S trade?"
Unlikely. Does the Fed even do speculative futures trading? Would seem doubtful.
-------------------------------------------------------------------------- "With a $600 trillion derivatives market , credit default swaps , I can see where a few bIllion is a drop in the bucket."
$600T is the underlying asset values of all positions being held at a given time. This number is essentially irrelevant in terms of calculating any true value. An entity could hold billions in contracts with a cash value of zero. Or less than zero.
|
|
djAdvocate
Member Emeritus
only posting when the mood strikes me.
Joined: Jun 21, 2011 12:33:54 GMT -5
Posts: 75,233
Mini-Profile Background: {"image":"","color":"000307"}
|
Post by djAdvocate on May 22, 2012 23:58:33 GMT -5
fair enough. thanks for posting.
|
|
|
Post by jarhead1976 on May 23, 2012 4:12:43 GMT -5
-------------------------------------------------------------------------- "With a $600 trillion derivatives market , credit default swaps , I can see where a few billion is a drop in the bucket."
Investerbob "$600T is the underlying asset values of all positions being held at a given time. This number is essentially irrelevant in terms of calculating any true value. An entity could hold billions in contracts with a cash value of zero. " Or less than zero.[/quote]
600 trillion irrelevant to whom? Then what's all the fuss about JP Morgan and a few billion?
From seeking Alpha.
We never learned one of the basic lessons that we should have learned from the financial crisis of 2008. Wall Street bankers take huge risks because the risk/reward ratio is all messed up. If the bankers make huge bets and they win, then they win big. If the bankers make huge bets and they lose, then the federal government uses taxpayer money to clean up the mess. Under those kind of conditions, why not bet the farm?
Sadly, most Americans do not even know what derivatives are. Most Americans have no idea that we are rapidly approaching a horrific derivatives crisis that is going to make 2008 look like a Sunday picnic. According to the Comptroller of the Currency, the "too big to fail" banks have exposure to derivatives that is absolutely mind blowing. Just check out the following numbers from an official U.S. government report....
JPMorgan Chase - $70.1 Trillion
Citibank - $52.1 Trillion
Bank of America - $50.1 Trillion
Goldman Sachs - $44.2 Trillion
Nothing like privatizing Gains And socializing the losses.
|
|
deziloooooo
Senior Associate
Joined: Dec 20, 2010 16:22:04 GMT -5
Posts: 10,723
|
Post by deziloooooo on May 23, 2012 6:04:18 GMT -5
"no it isn't. it is public money. Shittybank is a public corporation." It's a publically traded corporation. The money is all private. Public money is gov't money. ------------------------------------------------------------------------------------------ "Wile I do not disagree with the "saving the system" rally about the big bank bailout...." Very little of what is in that last paragraph is accurate, and that's what I was talking about when I said I think decisions should be based on facts. For example, with the exception of AIG, the gov't made a profit on the "bailouts" (which were not bailouts but rather high interest rate loans). AIG is even on track to pay off it's loans. The cost to the tax payers (if any) will wind up being no more than a few billion. The cost to taxpayers of not bailing them out might have been in the trillions. That seems like a damn good investment to me. Agree and remember , all of the guru's [both sides] say that this period in our History was unique and was on the brink of disaster , as never ever before..so what the Government did, which was something, even the stimulus which might have been improved on, was important and I for one am glad we had someone who took the bull by the horns , even with the known criticism and did something and that was Obama and his people..not the other side for the most part and for the few who did break away from their party's no's , kudo's for you ..most have probably paid the penalty or may be doing so this November but your sacrifice was appreciated by me.
|
|
|
Post by jarhead1976 on May 23, 2012 7:00:54 GMT -5
We have a government? Not since December 23rd, 1913. The Mayans were close.
|
|
floridayankee
Junior Associate
If You Don't Stand Behind Our Troops, Feel Free to Stand in Front of Them.
Joined: Dec 20, 2010 14:56:05 GMT -5
Posts: 7,461
|
Post by floridayankee on May 23, 2012 7:46:45 GMT -5
using the same link as above for 2012, we see the following for Romney: Which highlights the point I made further down in my post....They win no matter which party they are bribing, I mean, backing.
|
|
floridayankee
Junior Associate
If You Don't Stand Behind Our Troops, Feel Free to Stand in Front of Them.
Joined: Dec 20, 2010 14:56:05 GMT -5
Posts: 7,461
|
Post by floridayankee on May 23, 2012 7:55:28 GMT -5
" thought when it came to campaign donations Wall Street generally "hedges" their bets and donates to both the R and D candidates." Big Wall Street firms didn't donate a dime to either Obama or McCain, because it is highly illegal. You are correct, but big corps can form a Super PAC and spend unlimited amount of money (well, limited by however much their shareholders allow them to squander) independent of the campaign of whichever pony they are backing.
|
|
jkapp
Junior Associate
Joined: Dec 23, 2010 12:05:08 GMT -5
Posts: 5,416
|
Post by jkapp on May 23, 2012 8:11:40 GMT -5
Nearly all the tarp loans were paid back. The Treasury reaped a windfall on those transactions. socialism at it's finest.Heck $500 million was blown on Solyndra. million begins with an "m". So I guess the question is how much does it take GOVERNMENT to waste for you to give a shit??
|
|
djAdvocate
Member Emeritus
only posting when the mood strikes me.
Joined: Jun 21, 2011 12:33:54 GMT -5
Posts: 75,233
Mini-Profile Background: {"image":"","color":"000307"}
|
Post by djAdvocate on May 23, 2012 11:55:48 GMT -5
-------------------------------------------------------------------------- "With a $600 trillion derivatives market , credit default swaps , I can see where a few billion is a drop in the bucket." Investerbob "$600T is the underlying asset values of all positions being held at a given time. This number is essentially irrelevant in terms of calculating any true value. An entity could hold billions in contracts with a cash value of zero. " Or less than zero. 600 trillion irrelevant to whom? Then what's all the fuss about JP Morgan and a few billion?
From seeking Alpha.
We never learned one of the basic lessons that we should have learned from the financial crisis of 2008. Wall Street bankers take huge risks because the risk/reward ratio is all messed up. If the bankers make huge bets and they win, then they win big. If the bankers make huge bets and they lose, then the federal government uses taxpayer money to clean up the mess. Under those kind of conditions, why not bet the farm?
Sadly, most Americans do not even know what derivatives are. Most Americans have no idea that we are rapidly approaching a horrific derivatives crisis that is going to make 2008 look like a Sunday picnic. According to the Comptroller of the Currency, the "too big to fail" banks have exposure to derivatives that is absolutely mind blowing. Just check out the following numbers from an official U.S. government report....
JPMorgan Chase - $70.1 Trillion
Citibank - $52.1 Trillion
Bank of America - $50.1 Trillion
Goldman Sachs - $44.2 Trillion
Nothing like privatizing Gains And socializing the losses.
[/quote]][/b] yeah. this episode has taught me in the plainest language possible how dangerously stupid it is to have private parties managing public funds. that is something that we should never, ever, under any circumstances do.
|
|
djAdvocate
Member Emeritus
only posting when the mood strikes me.
Joined: Jun 21, 2011 12:33:54 GMT -5
Posts: 75,233
Mini-Profile Background: {"image":"","color":"000307"}
|
Post by djAdvocate on May 23, 2012 11:57:05 GMT -5
million begins with an "m". So I guess the question is how much does it take GOVERNMENT to waste for you to give a shit?? actually, that isn't the question at all. however, i have learned from many years of managing companies (including one "rescue") that you go after the biggest targets for waste and fraud first. all of this screaming and hollering about the solars is so much sound and fury when you compare it to the massive fraud and abuse in the military budget. until that becomes the meme in these threads, i am going to continue pointing it out. sorry about that.
|
|
djAdvocate
Member Emeritus
only posting when the mood strikes me.
Joined: Jun 21, 2011 12:33:54 GMT -5
Posts: 75,233
Mini-Profile Background: {"image":"","color":"000307"}
|
Post by djAdvocate on May 23, 2012 12:00:18 GMT -5
using the same link as above for 2012, we see the following for Romney: Which highlights the point I made further down in my post....They win no matter which party they are bribing, I mean, backing. and my point is that they are no longer "banking" on Obama, but Romney. that should tell you something.
|
|
floridayankee
Junior Associate
If You Don't Stand Behind Our Troops, Feel Free to Stand in Front of Them.
Joined: Dec 20, 2010 14:56:05 GMT -5
Posts: 7,461
|
Post by floridayankee on May 23, 2012 12:06:35 GMT -5
Which highlights the point I made further down in my post....They win no matter which party they are bribing, I mean, backing. and my point is that they are no longer "banking" on Obama, but Romney. that should tell you something. It tells me Romney promised them more goodies than Obama did.
|
|
jkapp
Junior Associate
Joined: Dec 23, 2010 12:05:08 GMT -5
Posts: 5,416
|
Post by jkapp on May 23, 2012 16:42:22 GMT -5
So I guess the question is how much does it take GOVERNMENT to waste for you to give a shit?? actually, that isn't the question at all. however, i have learned from many years of managing companies (including one "rescue") that you go after the biggest targets for waste and fraud first. all of this screaming and hollering about the solars is so much sound and fury when you compare it to the massive fraud and abuse in the military budget. until that becomes the meme in these threads, i am going to continue pointing it out. sorry about that. And I disagree...I see the massive amount of fraud and abuse being in Medicare, and will continue pointing that out
|
|
Deleted
Joined: May 18, 2024 2:17:09 GMT -5
Posts: 0
|
Post by Deleted on May 23, 2012 19:06:41 GMT -5
"600 trillion irrelevant to whom? Then what's all the fuss about JP Morgan and a few billion?"
If you added up the value of all assets on the entire planet, it would not add up to $600T. Not even close. The $600T is not irrelevant, but it has very little to do with the actual value of all the securities held in the derivatives market.
The few billion lost by JPM is actual money lost. The sum total value of all the outstanding contracts in the various derivatives market is not a measure of value. For example, if you and I both have enough collateral, I could sell you and you could by from me $1 Trillion in futures, options, or other contracts for some commodity. Did we create $1T in value? No, we didn't. We didn't create any value because my short position is 100% offset by your long position. Make sense?
|
|
djAdvocate
Member Emeritus
only posting when the mood strikes me.
Joined: Jun 21, 2011 12:33:54 GMT -5
Posts: 75,233
Mini-Profile Background: {"image":"","color":"000307"}
|
Post by djAdvocate on May 23, 2012 23:41:25 GMT -5
and my point is that they are no longer "banking" on Obama, but Romney. that should tell you something. It tells me Romney promised them more goodies than Obama did. or that Obama didn't deliver.
|
|
djAdvocate
Member Emeritus
only posting when the mood strikes me.
Joined: Jun 21, 2011 12:33:54 GMT -5
Posts: 75,233
Mini-Profile Background: {"image":"","color":"000307"}
|
Post by djAdvocate on May 23, 2012 23:42:25 GMT -5
actually, that isn't the question at all. however, i have learned from many years of managing companies (including one "rescue") that you go after the biggest targets for waste and fraud first. all of this screaming and hollering about the solars is so much sound and fury when you compare it to the massive fraud and abuse in the military budget. until that becomes the meme in these threads, i am going to continue pointing it out. sorry about that. And I disagree...I see the massive amount of fraud and abuse being in Medicare, and will continue pointing that out just to be clear: you think there is more waste and fraud in MC than the military?
|
|
|
Post by jarhead1976 on May 24, 2012 4:17:44 GMT -5
"600 trillion irrelevant to whom? Then what's all the fuss about JP Morgan and a few billion?" If you added up the value of all assets on the entire planet, it would not add up to $600T. Not even close. The $600T is not irrelevant, but it has very little to do with the actual value of all the securities held in the derivatives market. The few billion lost by JPM is actual money lost. The sum total value of all the outstanding contracts in the various derivatives market is not a measure of value. For example, if you and I both have enough collateral, I could sell you and you could by from me $1 Trillion in futures, options, or other contracts for some commodity. Did we create $1T in value? No, we didn't. We didn't create any value because my short position is 100% offset by your long position. Make sense? I am afraid I do understand. So let's see the money lost by JP Morgan is real. Yet it is directly tied to a derivatives play as you state. Wonder who ends up paying that real loss ?
|
|
jkapp
Junior Associate
Joined: Dec 23, 2010 12:05:08 GMT -5
Posts: 5,416
|
Post by jkapp on May 24, 2012 7:52:06 GMT -5
And I disagree...I see the massive amount of fraud and abuse being in Medicare, and will continue pointing that out just to be clear: you think there is more waste and fraud in MC than the military? Yes I do...and personally, I believe it is far more than the $60-70B they report losing every year to waste and fraud. With government, if they are telling you one number, often it ends up being much higher than that.
|
|
workpublic
Junior Associate
Catch and release please
Joined: Dec 30, 2010 14:01:48 GMT -5
Posts: 5,551
Favorite Drink: Heineken
|
Post by workpublic on May 24, 2012 8:22:24 GMT -5
and my point is that they are no longer "banking" on Obama, but Romney. that should tell you something.
if true it tells me that romney will be the next potus.
|
|
djAdvocate
Member Emeritus
only posting when the mood strikes me.
Joined: Jun 21, 2011 12:33:54 GMT -5
Posts: 75,233
Mini-Profile Background: {"image":"","color":"000307"}
|
Post by djAdvocate on May 24, 2012 9:51:22 GMT -5
just to be clear: you think there is more waste and fraud in MC than the military? Yes I do...and personally, I believe it is far more than the $60-70B they report losing every year to waste and fraud. With government, if they are telling you one number, often it ends up being much higher than that. ok, thanks.
|
|
djAdvocate
Member Emeritus
only posting when the mood strikes me.
Joined: Jun 21, 2011 12:33:54 GMT -5
Posts: 75,233
Mini-Profile Background: {"image":"","color":"000307"}
|
Post by djAdvocate on May 24, 2012 9:51:57 GMT -5
and my point is that they are no longer "banking" on Obama, but Romney. that should tell you something. if true it tells me that romney will be the next potus. the smart money is not always right.
|
|
|
Post by jarhead1976 on May 24, 2012 15:47:51 GMT -5
Courtesy of Lehman Brothers : Structured Credit Solutions With over seventy professionals worldwide, Lehman Brothers gives you access to top quality risk-management, structuring, research and legal expertise in structured credit. The team combines local market knowledge with global co-ordinated expertise. Lehman Brothers has designed specific solutions to our clients’ problems, including yield-enhancement,capital relief, portfolio optimisation, complex hedging and asset-liability management. . .Credit Default Swaps .Portfolio Swaps .Credit Index Products .Repackagings .Default Baskets .Secondary CDO trading .Customised CDO tranches .Default swaptions Credit hybrids For further information please contact your local sales representative or call: Product Innovation Leadership in Fixed 2003 Lehman Brothers Inc.
|
|
handyman2
Senior Member
Joined: Dec 29, 2010 23:56:33 GMT -5
Posts: 3,087
|
Post by handyman2 on May 24, 2012 17:14:28 GMT -5
My opinion is that this issue is not going away soon. If what I read is correct they still don't have a handle on it.
|
|
Deleted
Joined: May 18, 2024 2:17:09 GMT -5
Posts: 0
|
Post by Deleted on May 24, 2012 18:59:16 GMT -5
"Wonder who ends up paying that real loss ?"
JPM, or whoever's money was being traded, of course. My point is that saying the derivatives market is a $600T market is more of a reflection of trading volume than the value of the market. (Although it's not a measure of trading volume, either.)
|
|
djAdvocate
Member Emeritus
only posting when the mood strikes me.
Joined: Jun 21, 2011 12:33:54 GMT -5
Posts: 75,233
Mini-Profile Background: {"image":"","color":"000307"}
|
Post by djAdvocate on May 24, 2012 20:33:30 GMT -5
"Wonder who ends up paying that real loss ?" JPM, or whoever's money was being traded, of course. My point is that saying the derivatives market is a $600T market is more of a reflection of trading volume than the value of the market. (Although it's not a measure of trading volume, either.) it certainly isn't a measure of "underlying", either. so what is it?
|
|