JPM Loss Now Estimated at $6-7B

[decoy409]

Nice write up,but it left out a few things.

No BAILOUT you say?

German and French banks got $36 billion from AIG Bailout

www.businessweek.com/the_thread/economicsunbound/archives/2009/03/german_and_fren.html

And another thing,you need to go to the main body of the octopus so you understand where this is all originating from.

driftr,I see you think those employment numbers out yesterday are not bad. Might do you some good to follow up on the breakdown of Lost workly week hours,Lost hourly pay,Lost Full Time jobs,And a whole crap load of part time jobs. And that certainly will not be paying the TRILLIONS in credit costs and allowed rolling of Big 'D' in the QUADRILLION PLUS.
Apparently many simply do not understand yet the big picture. But they will,guaranteed.

[formerexpat]

Yes, I say it wasn't a bail out - it was an emergency loan at 11% based on the liquidity needs of a company. It was a mutual decision between the Fed and the insurance commissioner to do it this way, rather than make a special exemption to allow the company to withdrawal the cash from the insurance subsidiary.

You mean French and German banks were paid what they were legally obligated based on the CDS contract which takes a pretty high priority in bankruptcy proceedings?

Perhaps we shouldn't do business with foreign operations or not allow them to hedge their own risks?

Please explain the main body of the octopus since you're knowledgeable on the topic.

[decoy409]

Well it's lengthy,

May 18,2012 - Pandemic Lying Admission: Deutsch Bank Up and Down the Fake Securitization Chain

livinglies.wordpress.com/2012/05/18/pandemic-lying-admission-deutsch-bank-up-and-down-the-fake-securitization-chain/

Now fingers hate to be pointed,however once again the Dimon Fed Co. has things all figured out. And please do keep in mind that our research is not ordained to any one source as we do take it and pick it apart and continue to add pieces. The problem we are having is that the puzzle is pretty darn complete. And we certainly do not like the picture it is and has been reflecting.

excerpt - The Four Horsemen of Banking,

Bank of America

JP Morgan Chase

Citigroup

Wells Fargo,

...own the Four Horsemen of Oil,

Exxon Mobil

Royal Dutch/Shell

BP

Chevron Texaco,

..in tandem with,

Deutsche Bank

BNP (Banque Nationale de Paris)

Barclays

other European old money behemoths

But their monopoly over the global economy does not end at the edge of the oil patch. According to company 10K filings to the SEC, the Four Horsemen of Banking are among the top ten stock holders of virtually every Fortune 500 corporation.[1]

So who then are the stockholders in these money center banks?

This information is guarded much more closely. My queries to bank regulatory agencies regarding stock ownership in the top 25 US bank holding companies were given Freedom of Information Act status, before being denied on “national security” grounds. This is rather ironic, since many of the bank’s stockholders reside in Europe.

One important repository for the wealth of the global oligarchy that owns these bank holding companies is US Trust Corporation - founded in 1853 and now owned by Bank of America.


A recent US Trust Corporate Director and Honorary Trustee was Walter Rothschild.


Other directors included:

Daniel Davison of JP Morgan Chase

Richard Tucker of Exxon Mobil

Daniel Roberts of Citigroup

Marshall Schwartz of Morgan Stanley [2]

www.bibliotecapleyades.net/sociopolitica/esp_sociopol_fed30.htm

[decoy409]

formerexpat,there has been a whole lot of under the floor boot scootin' going on for a really long time. Make no mistake,the same dinosaurs are still the same.

June 1,2012 excerpt - But what really should be jerking people from Lego Land and into Friday the 13th is the Treasury bond market. The yield on the 10-yr Treasury is at a record all-time low and the yield on the 30-yr Treasury - the Big Daddy - is below it's lowest point during the Lehman crisis. That's not just warning signals flashing, that's the equivalent of financial nuclear air raid sirens going off.

What this means is that all liquidity is being sucked out of the global financial engine and it's going into Treasuries and precious metals. I suspect today's big move in both reflects the expectation that we may get a heavy dose of QE3 in some form - likely not an obvious, overt form - at the June FOMC meeting. Just like everything else going on in our system - of which the Obama farce and fraud is supremely emblematic - I'm sure our resident Talmudic scholar at the Fed, who masquerades as an economic expert, will do his best to inject as much electronically created currency into the system but disguise it in a way that the public will accept as nothing more than some temporary, "sterlized" lines of credit.

Trust me, that's a loan NO ONE wants to take unless they have a lot of physical gold and silver on the side...

truthingold.blogspot.com/

We have been calling it 'Super-Vac'. And there is going to be a lot of wills broken for those that simply have turned there head and have professed else.

We run numbers and we run numbers that matter at the heart of things. We do so to keep time.

And we wish that some would stop quoting QE3 as that has come and gone in a silent running mode.

[formerexpat]

How can I argue with a that gets their stories from conspiracy theory websites?

The simple explanation for lower treasury yields: Gold is over priced and the Euro is beginning to destruct, meaning more money is moving into the USD and pushing rates lower. Switzerland has also announced that it will look to take measures to protect its currency due to the influx of reserves (likely through taxation of foreign accounts).

Where is money going to go when the currency that made up 25-30% of the worlds reserve currency implodes? Probably into the other reserve currencies that makes up the remaining 70-75% of the market - predominantly, the USD.

I'm sorry but I can't take you seriously when these are your three sources for information:

livinglies.wordpress.com/2012/05/....ization -chain/

www.bibliotecapleyades.net/sociopolitica/esp_sociopol_fed30.htm

truthingold.blogspot.com/

[Don Perignon]

"Truth in Gold"... sounds kinda "cultish", doesn't it?
Like the propaganda arm of the "Golden Idol" movement...
"In Gold We Trust"!

[Deleted]

"Nice write up. Thank you."

His writeup had very little to do with what you were saying, and he pointed out that AIG got loans, not bailouts. Your betting analogy of more people betting for a team than against is also false. All derivative transactions have two parties. One going long, the other short. And many of those transactions are hedging, not betting on what the price will be in the future.

[Driftr]

Jun 3, 2012 6:40:39 GMT -5 @investorbob said:

"Nice write up. Thank you."

His writeup had very little to do with what you were saying, and he pointed out that AIG got loans, not bailouts. Your betting analogy of more people betting for a team than against is also false. All derivative transactions have two parties. One going long, the other short. And many of those transactions are hedging, not betting on what the price will be in the future.

Not so good with the answering of the direct questions thing eh? Noted & ignored from now on. Peace out.

[djAdvocate]

Jun 1, 2012 8:44:34 GMT -5 Savoir Faire-Demogague in NJ said:

Jun 1, 2012 7:27:05 GMT -5 Driftr said:

Then please explain why AIG required a bailout in order to pay off Goldman.

AIG provided insurance on the sub-prime mortgages that were flooding the market and being bought up by FNMA, packaged and sold to banks, investors, mutual funds, 401Ks, pensions and endowments.

which is why they moved swiftly to bail it out. can you imagine the hue and cry if some wealthy pension fund went belly up because of the investments that AIG made? SHOCKING, i tell you!

[djAdvocate]

May 31, 2012 20:20:50 GMT -5 @investorbob said:

"is that right, or am i steering my boat into a reef?"

You're closer than you think, because options are derivatives. The only part you're missing is that not everyone is betting on what the price will be in the future. Those who actually buy and/or sell the commodity in question are making trades simply to get rid of their price risk. Also, traders "A" and "B" might be counterparties to the same trade (i.e. one sells the option and the other buys it).
------------------------------------------------------------------------------
"Not necessarily...but, even assuming there is an equal number of trades for each side,..."

There MUST be an equal number of trades for each side. The only way for one person to take a short position is for someone else (or multiple someone else's) to take an equal long position.

must there be equal trades because there really is no "underlying"? or is it for some other reason?

[formerexpat]

There MUST be an equal number of trades for each side. The only way for one person to take a short position is for someone else (or multiple someone else's) to take an equal long position.

His writeup had very little to do with what you were saying, and he pointed out that AIG got loans, not bailouts. Your betting analogy of more people betting for a team than against is also false. All derivative transactions have two parties. One going long, the other short. And many of those transactions are hedging, not betting on what the price will be in the future.

Whoa there, Bob - hold on before you completely dismiss my posts. I didn't see your previous response (the other I quoted).

I certainly never meant to imply that derivatives are betting. I work in the insurance and financial services industry where we use options, swaps and futures to hedge all of our risks that we undertake on behalf of policyholders.

I don't agree with the first part you posted...at least as I interpreted it when I read it.

You enter into a single derivative contract with a counterparty (I view that as a trade). I agree that the counterparty takes the opposite side of the trade. This is how/why you can have more call options than put options for stocks (or vice versa) and, as you know, how traders use the information as and indication of the general sentiment for a stock. Perhaps we're saying the same thing but looking at it from a different perspective?

The derivative reporting that I've attached previously will report the gross market value of those entered contracts. If I enter into a call option for $100 with you and it increases 5%, it will report $105 as the gross market value. It's irrelevant in the reporting that you'll be exposed to a $5 loss as the counterparty.

For a counterparty to decrease their overall risk, they could write a call option on day 1 and then on day 3 write a put option with another party to lock in gains, excluding broker fees. Also, when you enter into a single bet with a bookie, the bookie is inherently taking the opposite side; like a single derivative contract.

I'm sorry that this all didn't come across clearer in my previous post(s) but I'm pretty confident in my understanding of derivatives. Maybe it happens to you, that sometimes things make sense in your head as you're writing them but then don't on paper.

[Deleted]

"must there be equal trades because there really is no "underlying"? or is it for some other reason?"

Because it's a contract to buy or sell something. If you sell a futures contract, you're agreeing to sell somebody that commodity in the future. In other words, somebody bought the contract you sold. It's not like betting where there isn't a counterparty (i.e. I bet on team A, but that doesn't mean someone else has to bet on team B).

-------------------------------------------------------------------
"Whoa there, Bob - hold on before you completely dismiss my posts."

I wasn't. Sorry if it came across that way.

"Perhaps we're saying the same thing but looking at it from a different perspective?"

Probably. Since you mentioned options.... There can be different numbers of puts and calls as you say, but if there are 100 long puts, there are 100 short puts.

[jarhead1976]

Short or long the men an women that pay for it will be the pensioners.

www.zerohedge.com/news/8bn-loss-or-was-jpmorgan-unhedged-long-and-wrong-post-ltro2

So, in summary, it appears that the CDS data confirms what we suspected.

A large (~$120bn) tail-risk tranche credit hedge was placed.
The hedging of that hedge became very onerous but surprisingly profitable as markets rallied day after day with no give-back.
This led to a greedy trader lifting some of the original tranche (and the HY short side) and leaving himself much more naked long to the market into LTRO2 - which marked the top. Losses escalated through April (~$2.5bn or so).
Dimon went public (with some of the details).
Last week, the rest of the tranche was dumped (we suspect) at a large cost (perhaps ~$5.5bn) leaving, we suspect...
A potential ~$8bn loss and a heavy IG9 long credit position hedged (with major basis risk - difference in dynamics between the legs of the trade and the hedge) by various other liquid positions including shorts in HYG, JNK, IG18, and HY18 (and we would suspect equity/financials too).

Just the beginning Investorob. With Europe on one knee and banks passing paper dreams back and forth. Just a matter of time before the reset button gets hit. First place to start is the FED.

[jarhead1976]

 Goldman suks took AIG's money. AIG' took the bailout.

 Goldman Sachs bundled mortgages and sold them as investments known as collateralized debt obligations to pension funds, foreign governments, cities, states and individual investors. Goldman Sachs fully knew that those investments were bad even though the credit rating agencies, which Goldman had paid to rate their CDO’S, gave these securities a high grade. In fact, these investments were top rated: AAA.They were made to look like solid investments.    

 

The investors were fooled. It seems like these investors were deliberatively fooled!

 

     These securities were actually bundles of mortgages that had been sold to people who couldn't afford to pay their mortgages. These securities were junk. When people couldn't pay their mortgages, the investors lost their money.

     To make matters worse, before the housing market crashed, Goldman entered into credit default swaps with AIG, an insurance company. It entered into these contracts so that they would get paid with the collateralized debt obligations went bad. Sure enough, the CDOs went bad and Goldman Sachs made LOTS of money, upwards of $13 billion from AIG.

See Bill Black explaining to Bill Moyers what happened in this case of open fraud.

[decoy409]

nicely put from you jarhead.

Bob,to put things bluntly for you,all of your understanding and conventional wisdom stacked against that in which you simply have not a clue,well unfolding has begun. And the little traveling caravan has been stoipping all over in and out of town.
As far as conspiracty,well if you call Tax Filings and SEC as well as heavy hitters and who is who conspiracy,go for it. We call it rotten apples in a basket that should have been dealt with long ago. But instead,some simply elect supporting the scheme. And to those that do,your in for some real fun!

Say out a town action has begun. Looks great!

[decoy409]

And as far as the swaps go,really is a shame that the surface is all that you have looked at. But then again,it is a library!

And driftr,happy to see you cheering on that dismal report on Fri. in employment land. Dident like those broken down figures hey.

[decoy409]

jarhead,some simply care not to look at the beast,simple as that.

Good thing for years and years and years of interest payments on the old house hey! Hell it was not even paid for and it was swaped down the lane,and then swapped again and again and again.....

[decoy409]

jarhead your link does not work to Black,but here ya be,

Feb. 6,2012 - Bill Black on Financial Fraud Investigations

excerpt - There is no comprehensive investigation of the over $1 trillion in mortgage origination fraud.

billmoyers.com/2012/02/06/bill-black-on-financial-fraud-investigations/

Of course there isnt. However there is a real nice tie called Dimon Fed Co. Like we said,it's all under control.

[formerexpat]

There can be different numbers of puts and calls as you say, but if there are 100 long puts, there are 100 short puts.

I agree with that but I would say there are 100 contracts since in each one, you will have someone taking the long and short position. That's where I was going.

nicely put from you jarhead.

Actually, as you would say...

really is a shame that the surface is all that you have looked at.

Sorry Jar, but you're not even aware of the structure of AIG to know that it had nothing to do with the insurance subsidiaries and that AIG was much more than an insurance company. Kind of like calling Berkshire Hathaway an insurance company. While they have insurance subsidiaries, they also have other businesses.

Any and all investors were capable of doing due diligence on each of the investments; there are very detailed reports that break these securities down by property address, summarize the information by credit score, payment delinquencies and a ton of other information.

Goldman entered into CDS contracts mainly because they kept most of the Z tranches of these securities. They were last in line in the event of defaults (or rather, the first loser). The A tranches (same with B, etc, etc) could withstand up to a certain amount of defaults before their specific tranche would default.

[decoy409]

"I'm sorry but I can't take you seriously when these are your three sources for information"

That's fine as those are called bit and pieces. And you call it as you like,conspiracy,doom and gloom,no nothing,etc.,etc.

We do expect that,no foul.

[jarhead1976]

Copy and paste the link it might work then. Thank you.

[jarhead1976]

Your right former expat, AIG was no more than a clearing house for Goldman.


Third, a clearinghouse for credit default swaps is certain to be undercapitalized. That means it is an AIG, a concentrated point of failure. The reason is that the contracts will be undermargined. CDS are not true derivatives, but are the economic equivalent of credit insurance. When a “reference entity” has a “credit event” meaning a bankruptcy or default, CDS prices jump to default. That means they shoot up massively because a payout on the CDS is certain, the only item in question is the precise amount.."

On and on and on.

www.nakedcapitalism.com/2009/11/the-fantasy-of-the-clearing-house-magic-bullet.html

[formerexpat]

CDS are not true derivatives, but are the economic equivalent of credit insurance.

From my previous post:

I'll also point it out to people that the Commodity Futures Modernization Act of 2000 [signed in Dec] excluded CDS's from being regulated as futures or securities. The Insurance department had already concluded earlier that year that a CDS was not an insurance contract.

Seems the professionals disagreed that they are insurance and the CFMA excluded them from being regulated as futures or securities; which is where CDS's will be regulated now after Frank / Dodd (by the SEC and/or the CFTC - where it belongs).

Insurance, on the other hand, is regulated by the NAIC.

So, you can continue to do a bit more of this if you'd like:



But it's not getting you any closer to being correct.

[jarhead1976]

FINRA! Has fined AIG plenty. We have regulators, now that is funny.


FINRA Fines Policy
www.finra.org/Industry/Enforcement/SanctionGuidelines/FinesPolicy/index.htm KeyMatch
FINRA - NASD Fines AIG Affiliate American General Securities ...
... 728-8464. NASD Fines AIG Affiliate American General Securities, Inc.
Over $1.1 Million for Directed Brokerage Violations. ...
www.finra.org/Newsroom/NewsReleases/2006/P016331 - 25k - Cached
FINRA - NASD Charges 15 Firms with Directed Brokerage ...
... The fifteen firms and their respective fines are as follows (firms noted with
asterisks are wholly owned subsidiaries of AIG Advisor Group, Inc.). ...
www.finra.org/Newsroom/NewsReleases/2005/P014340 - 29k - Cached
FINRA - 2006 News Releases
... 4/5/06, NASD Fines AIG Affiliate American General Securities, Inc.
Over $1.1 Million for Directed Brokerage Violations. 3 ...
www.finra.org/Newsroom/NewsReleases/2006/ - 54k - Cached
[PDF] Disciplinary and Other FINRA Actions Reported for September ...
... AIG Financial Advisors, Inc. ... These aspects of the NAC's decision have been
appealed to the SEC, and the fines and suspensions are not in effect ...
www.finra.org/web/groups/industry/@ip/@enf/@da/documents/disciplinaryactions/p036918.pdf - 2010-06-05 - Text Version
[PDF] Disciplinary and Other NASD Actions
... Gregory Dubois Walker San Diego, California (April 27, 2006) NASD
Fines AIG Affiliate American General Securities, Inc. ...
www.finra.org/web/groups/industry/@ip/@enf/@da/documents/disciplinaryactions/p016587.pdf - 2010-06-05 - Text Version
[PDF] Disciplinary and Other NASD Actions
... The 15 firms and their respective fines are as follows (firms noted with asterisks
are wholly owned subsidiaries of AIG Advisor Group, Inc.): ...
www.finra.org/web/groups/industry/@ip/@enf/@da/documents/disciplinaryactions/p014454.pdf - 2010-06-05 - Text Version
FINRA - 2006 News Releases
... 4/5/06, NASD Fines AIG Affiliate American General Securities, Inc.
Over $1.1 Million for Directed Brokerage Violations. 3 ...
www.finra.org/Industry/Issues/Advertising/NewsReleases/2006/ - 35k - Cached
[PDF] September 2007 Notices
Page 1. Regulatory Notices 07-41 Member Firms Are Reminded to
Register with FINRA Associated Persons Who Also Are ...
www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p037148.pdf - 2010-06-05 - Text Version
[PDF] February 2008 Notices
... District Committee Nominees for Terms Expiring May 31, 2011 James
R. Cannon AIG Financial Advisors, Inc. Phoenix, AZ ...
www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p038100.pdf - 2010-06-05 - Text Version
[PDF] April 2008 Notices
Page 1. Regulatory Notices 08-15 Foreign Research Analyst Exemption
from the Research Analyst Qualification Examination ...
www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p038480.pdf - 2010-06-05 - Text Version

[jarhead1976]

NAIC is no more than a lobbying group for the insurance industry. You just lost your credibility.

[formerexpat]

NAIC is no more than a lobbying group for the insurance industry. You just lost your credibility.

You clearly don't know the purpose of the NAIC and each of the state's insurance commissioners.

As for your other post, WTF does that have to do with anything we're discussing?

[jarhead1976]

"The NAIC is not a regulator; while its members are the insurance commissioners (i.e., the chief insurance regulators) of each state and territory, the NAIC is a non-governmental organization that concerns itself with insurance regulatory matters but does not actually regulate. The states have not delegated their regulatory authority to the NAIC."

[jarhead1976]

As for the other post well F I N R A . You figure it out.

[decoy409]

Just can't help to repost,

May 18,2012 - Pandemic Lying Admission: Deutsch Bank Up and Down the Fake Securitization Chain

livinglies.wordpress.com/2012/05/....ization -chain/

and then,

Feds Slam Deutsche Bank But Next Day FINRA Nominates Executive To Its Board

I’m going to make this as short and sweet as possible and leave it to my devoted "Street Sweeper" readers to fill in whatever blanks that they wish. Ultimately, this is a bizarre, sad, and somewhat shocking tale of Wall Street's regulatory community and its incessant failure to get it.Bharara Slams Deutsche BankOn May 10, 2012, the United States Department of Justice issued a press release: Manhattan U.S. Attorney Recovers $202.3 Million From Deutsche Bank And Mortgageit In Civil Fraud Case Alleging Reckless Mortgage Lending Practices And False Certifications To HUD. The release states, in part:he United States has settled a civil fraud lawsuit against DEUTSCHE BANK AG, DB STRUCTURED PRODUCTS, INC., DEUTSCHE BANK SECURITIES, INC. (collectively “DEUTSCHE BANK” or the “DEUTSCHE BANK defendants”) and MORTGAGEIT, INC.

business.topnewstoday.org/Business/article/2256818/

And simply wonder just how long yet it will be before there simply is no more excuses.

[Deleted]

"I agree with that but I would say there are 100 contracts since in each one, you will have someone taking the long and short position. That's where I was going."

Yes, correct. Again, sorry if it seemed like I was suggesting you didn't know what you were talking about. Must've been poor wording on my part.