formerexpat
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Post by formerexpat on May 24, 2012 21:01:50 GMT -5
$600 TR is the notional value outstanding on derivatives. Very, very misleading and inappropriate to use for a discussion. The largest type of derivative used (by notional value) one is an interest rate swap; which banks use to hedge against the interest rate risk they accept on mortgage loans. We could decrease our derivatives use if we want. Of course, that will mean that we all have floating rate mortgages like all the other countries in the world. www.bis.org/statistics/derstats.htmHere's a good site on derivatives...the pdf under "19 Amounts outstanding of over-the-counter (OTC) derivatives by risk category and instrument [View web-only statistical tables of May 2012] " shows you the types of derivatives by notional amount.
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dumdeedoe
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Post by dumdeedoe on May 24, 2012 21:49:37 GMT -5
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Deleted
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Post by Deleted on May 25, 2012 6:30:06 GMT -5
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decoy409
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Post by decoy409 on May 25, 2012 6:43:15 GMT -5
Investorbob,you state Jpm never recieved bailouts and now that 600 is the derivative number.
I posted this past week the BAILOUTS that Dimon Fed & Co. concockted up over the years here so the last thing you want to be telling folks as that they dident recieve anything.
As far as big 'D' we will include that today.
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Deleted
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Post by Deleted on May 25, 2012 7:54:01 GMT -5
"Investorbob,you state Jpm never recieved bailouts and now that 600 is the derivative number."
I don't think I said anything about specific funds that JMP did or did not receive. I have no idea what the second half of your sentence means, but I'm not the one who brought up the $600T number. I think you may need to re-read what I've said.
This is the first post you've even made on this thread, so I assume you're just looking to get other people to go find all the other threads you start. I tried reading a couple of your posts, but I honestly couldn't manage to get through them as they didn't really make any sense.
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decoy409
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Post by decoy409 on May 25, 2012 8:16:53 GMT -5
Thanks! The bet was worth the cup of coffee this morning as to your reply.
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decoy409
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Post by decoy409 on May 25, 2012 8:22:10 GMT -5
And on top of that,certainly we want people to SEE and understand what has become. And we do understand that there will be those that will just not be able to fanthom.
Why don't you go to the POST as this morning it is cut and dried.
Your quote above,or your words; I tried reading a couple of your posts, but I honestly couldn't manage to get through them as they didn't really make any sense. (end)
Well here is your Golden Oppurtunity as being investorbob to read 2 posts presented this morning in the POST. And if you can not understand that,well I certainly would not be doing any investing.
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djAdvocate
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Post by djAdvocate on May 25, 2012 10:11:35 GMT -5
but you already said that $600T is more than all of the global economies combined, so that can't be true, right?
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decoy409
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Post by decoy409 on May 25, 2012 10:44:13 GMT -5
dijlungrot, why of course that can't be true. Why who would be silly enough to believe such a thing. Well,I will admit that I am silly enough to believe it! And EVERYBODY else that cares should be silly enough as well. The remainder hired gun slingers are running out of ammo to keep the lid on. When we discuss boiling over,that is what is happening. And that boiling over,it does trinkle down to the ants that are lost or only have a small partial delivered to their door. And you certainly do not want the mob to SEE. Here,you probebly seen it and if not,have a real good look and understand credit, usdebt.kleptocracy.us/
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vandalshandle
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Post by vandalshandle on May 25, 2012 10:53:26 GMT -5
"copper today is 3:45 and crashing."
Hallelujah! I live next to one of the largest copper mines in the USA and they are poisoning our water. What is worse, they are trying to open another mine across the valley, which would utterly destroy the environment of that otherwise pristine desert area. We may be saved, after all!
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Deleted
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Post by Deleted on May 25, 2012 12:21:57 GMT -5
"but you already said that $600T is more than all of the global economies combined, so that can't be true, right?"
I already said it's not a measure of the value of the derivatives market. The underlying assets don't actually exist. Like I said, if I sell you a futures contract, no value has been created or destroyed. But the underlying notional value on the contract still gets added to that $600T number. The $600T doesn't really mean anything.
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Deleted
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Post by Deleted on May 25, 2012 12:25:25 GMT -5
Copper is down like 2% in 5 days. What is the definition of "crash"?
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floridayankee
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Post by floridayankee on May 25, 2012 12:31:19 GMT -5
Copper is down like 2% in 5 days. What is the definition of "crash"? For those that steal air conditioners for the scrap value of the copper, that would pretty much be it.
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workpublic
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Post by workpublic on May 25, 2012 12:43:18 GMT -5
dumbdee,
12-5-10 JPM bought half of the LME copper warrants.
i saw on bloomberg that copper demand is increasing.
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djAdvocate
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Post by djAdvocate on May 25, 2012 12:44:42 GMT -5
"but you already said that $600T is more than all of the global economies combined, so that can't be true, right?" I already said it's not a measure of the value of the derivatives market. The underlying assets don't actually exist. Like I said, if I sell you a futures contract, no value has been created or destroyed. But the underlying notional value on the contract still gets added to that $600T number. The $600T doesn't really mean anything. ok, i followed about half that. my understanding of "underlying" is that it refers to assets, not "non-assets".
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Deleted
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Post by Deleted on May 25, 2012 17:18:34 GMT -5
There is no actual asset being traded when you trade a derivative, though. Underlying means that the the prices are based on the price of that particular commodity.
It's a little confusing, which makes it easy for alarmists to paint false pictures about the "horrors" of the "$600T" derivatives market.
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mmhmm
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Post by mmhmm on May 25, 2012 17:27:24 GMT -5
Thanks, investorbob. I think this is the first time I've ever seen derivatives explained to the point I can see some semblance of sense to it all.
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dumdeedoe
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Post by dumdeedoe on May 25, 2012 18:23:47 GMT -5
I think the 600 trillion figure refers to the total buys of the derivatives market... Kinda like when I was day trading with 100k$ but at the end of the year had 3.3$ million in stock trades recorded with that 100k. And the reason I think that copper is going to tank this year....down 7% in 10 days. www.forbes.com/sites/gordonchang/2012/02/12/china-is-hoarding-copper-why/ China is hoarding copper. The country in Q4 added about 300,000 tons to its already impressive stockpile. China has been buying copper well over their needs, World bank economic forecast has cut their growth from 8.4 to 8.2% This gives China the control over the market, and I believe it is a bubble waiting to burst... Copper needs in the US have all but gone way with the collapse of the housing market. So it seems the price is being propped up by China alone. JPM owns a large stock of copper. JPM to cover losses may have to liquidate some of their inventory. If the Chinese have any sense they can pull out of the market causing it to spiral down and buy up whats left at half the cost.....China is over buying every commodity right now and is propping up several markets. When they determine to stop we will be screwed.
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djAdvocate
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Post by djAdvocate on May 26, 2012 23:12:50 GMT -5
There is no actual asset being traded when you trade a derivative, though. Underlying means that the the prices are based on the price of that particular commodity. ok. closer. what is the "commodity" in the case of the derivative? CDS's?
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Post by jarhead1976 on May 27, 2012 7:40:27 GMT -5
New York Times May 27, 2012
Boaz Weinstein didn’t know it, but he had just hooked the London Whale.
It was last November, and Mr. Weinstein, a wunderkind of the New York hedge fund world, had spied something strange across the Atlantic. In an obscure corner of the financial markets, prices seemed out of whack. It didn’t make sense.
Mr. Weinstein pounced.
As the financial world now knows, what was out of whack was JPMorgan Chase & Company [JPM 33.50 -0.47 (-1.38%) ]. One its traders, Bruno Iksil, the man later nicknamed the London Whale for his outsize trades, was about to blow a multibillion-dollar hole in the mighty House of Morgan.
But the resulting uproar, in Washington and on Wall Street, has largely obscured a simple truth of the marketplace. Yes, Morgan lost big — but, as Mitt Romney has pointed out, someone else won. And that someone or, rather, those someones, turn out to be Boaz Weinstein and a wolf pack of like-minded hedge fund managers.
In the London Whale, these traders saw a rich opportunity, and they seized it with both hands. That, after all, is the way hedge funds roll. His cool calculus has made Mr. Weinstein a very rich man: he is in talks to buy the Fifth Avenue co-op of a reclusive heiress, Huguette Clark, for $24 million.
It might seem remarkable that someone like Mr. Weinstein, a man virtually unknown outside of financial circles, could deal such a stinging blow to one of the world’s largest, most respected banks. Jamie Dimon, the chairman and chief executive of JPMorgan and a face of the banking establishment, is struggling to contain the damage from what he has called a “terrible, egregious mistake.” The loss — JPMorgan put it at $2 billion, but it may turn out to be $3 billion or more ."
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Post by Deleted on May 27, 2012 10:40:28 GMT -5
"ok. closer. what is the "commodity" in the case of the derivative? CDS's?"
Whatever the underlying asset is. If it's oil forwards/futures/options/swaps, etc., then oil (a specifc grade and a specific delivery location) is the underlying asset. If it's currency, then it's a specfic currency that is the underlying asset. But trading the derivative doesn't create or destroy an asset. It just uses the asset's price as a basis for determining the cost to buy or sell the specific contract.
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djAdvocate
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Post by djAdvocate on May 27, 2012 11:47:55 GMT -5
"ok. closer. what is the "commodity" in the case of the derivative? CDS's?" Whatever the underlying asset is. If it's oil forwards/futures/options/swaps, etc., then oil (a specifc grade and a specific delivery location) is the underlying asset. If it's currency, then it's a specfic currency that is the underlying asset. But trading the derivative doesn't create or destroy an asset. It just uses the asset's price as a basis for determining the cost to buy or sell the specific contract. i was referring specifically to this crisis, which i believe is in mortgage backed securities. what is the commodity in those cases?
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formerexpat
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Post by formerexpat on May 27, 2012 20:48:38 GMT -5
Which crisis? Are we in it currently?
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Deleted
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Post by Deleted on May 27, 2012 22:28:58 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. Just so the facts are straight here, like it or hate it, good thing or bad thing, Bush was responsible for the bank bailouts not Obama. www.huffingtonpost.com/robbie-gennet/bush--not-obama--enacted_b_678682.html
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Deleted
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Post by Deleted on May 28, 2012 7:55:32 GMT -5
"i was referring specifically to this crisis, which i believe is in mortgage backed securities. what is the commodity in those cases?"
I don't think the JPM issue is really a crisis, but a MBS is an asset, not a derivative. The deal with an MBS is that every mortgage is different. But by splitting them up and making an MBS that is a combination of bits of many different mortgages, they tried to make them into something more akin to something that can be traded like a commodity.
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Deleted
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Post by Deleted on May 28, 2012 8:00:49 GMT -5
"Thanks, investorbob. I think this is the first time I've ever seen derivatives explained to the point I can see some semblance of sense to it all."
No problem. Just don't go getting the idea that I'm an expert on this sort of thing. I think I know just enough to know how the markets work and to know that it's best to stay a way and leave things to the pros....
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decoy409
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Post by decoy409 on May 28, 2012 8:20:09 GMT -5
Won't be doing anybody any good for not delivering the goods and instead helping to mask things. Investorbob,this should clear a few things up and put them into perspective for you. March 24,2011 - Big Banks Continue to Suck at the Government Teat With Never-Ending Stealth Bailouts www.washingtonsblog.com/2012/03/b....-b ailouts.html And since that has not been accomplished,we will bring it to you. And Jpm is not a problem? Oh you mean Dimon Fed Co. is not a problem? The giant teat sucker and part of the Fed board is not a problem!
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decoy409
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Post by decoy409 on May 28, 2012 8:27:45 GMT -5
That's pretty crappy how you can set source links in and here at ProBoards the page can not be found to so many that still do exist, Big Banks Continue to Suck at the Government Teat With Never-Ending Stealth Bailouts Posted on March 24, 2012 by WashingtonsBlog Open-Ended Bailouts Are Continuing www.washingtonsblog.com/2012/03/big-banks-continue-to-suck-at-the-government-teat-with-never-ending-stealth-bailouts.htmlSo when the discussion is on to Jpm recieved nothing,try again. 75 trillion plus iceberg is cascading and there is nothing anybody helping to pull wool is going to do about the multi-faceted trick octopus as time has done it all for us and revealing is unraveling. No foul to you investorbob as apparently you are not aware. To SEE the highlighted links to the sourced information above,simply use yahoo or google and bring up the article.
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formerexpat
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Post by formerexpat on May 28, 2012 8:52:38 GMT -5
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mmhmm
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Post by mmhmm on May 28, 2012 9:02:28 GMT -5
Decoy, I'm sorry, but I had to remove the wall of text you posted. Our CoC asks that you exerpt long articles and provide a link for those who wish to read more. That way, people who can't, or don't wish to read it aren't stuck with having to scroll through it to read others' posts. I left your introduction along with the link; however, if you do this again, I'll remove the post altogether.
mmhmm, P&M Moderator
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