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Post by jarhead1976 on Jun 4, 2012 8:16:53 GMT -5
From The U S Commodity and Trading Commission April 13, 2010 "Over-the-counter derivatives were at the center of the 2008 financial crisis. They added leverage to the financial system with more risk being backed up by less capital. Taxpayers bailed out AIG with $180 billion when that company’s ineffectively regulated $2 trillion derivatives portfolio nearly brought down the financial system – that means that every person in this room has $600 invested in AIG. These events demonstrate how over-the-counter derivatives – initially developed to help manage and lower risk – can actually concentrate and heighten risk in the economy and to the public. The time has come to bring comprehensive regulation to the over-the-counter derivatives marketplace and to the dealers who sell derivatives products." www.cftc.gov/PressRoom/SpeechesTestimony/opagensler-38According to this agency the taxpayers did bail out AIG. The scary part is the same agency in charge of the oversight or regulators seem a little behind the times. Los Angeles Times May 23,2012 WASHINGTON — The public won't be protected from the type of risky bets that led to the huge trading loss at JPMorgan Chase & Co. until new rules are approved to allow better monitoring of complicated derivatives transactions, two key federal regulators told a Senate committee. "As it was, the heads of the Securities and Exchange Commission and the Commodity Futures Trading Commission said Tuesday that they learned of the unusual trading activity that led to JPMorgan's $2.3-billion trading loss through media reports." Losses to climb higher. articles.latimes.com/2012/may/23/business/la-fi-jpmorgan-congress-20120523
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Post by Deleted on Jun 4, 2012 8:20:48 GMT -5
"The public won't be protected from the type of risky bets that led to the huge trading loss at JPMorgan Chase & Co. until new rules are approved to allow better monitoring of complicated derivatives transactions, two key federal regulators told a Senate committee."
The public doesn't need to be protected from companies making bad investments. Do we also need to regulate decisions to build new factories? Decisions to develop new products? The public was not harmed by JPM's bad decisions. The company and its investors were harmed.
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decoy409
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Post by decoy409 on Jun 4, 2012 8:38:31 GMT -5
'The public doesn't need to be protected from companies making bad investments.' Of course not! We like REAL VALUE! Why who in the heck would want to pay ACTUAL VALUE less bad bets? We would say 9 out of 10 would like that. Maybe a step up bracket would be better? Those that want to keep covering the spreads,they can pay the REAL VALUE. And talk and dream about Dodd frank and other things that were washed away, May 4,2012 - How JP Morgan Chase Has Made the Case for Breaking Up the Big Banks and Resurrecting Glass-Steagall excerpt - J.P. Morgan Chase & Co., the nation’s largest bank, whose chief executive, Jamie Dimon, has led Wall Street’s war against regulation, announced Thursday it had lost $2 billion in trades over the past six weeks and could face an additional $1 billion of losses, due to excessively risky bets. The bets were “poorly executed” and “poorly monitored,” said Dimon, a result of “many errors, “sloppiness,” and “bad judgment.” But not to worry. “We will admit it, we will fix it and move on.” Move on? Word on the Street is that J.P. Morgan’s exposure is so large that it can’t these bad bets without affecting the market and losing even more money. And given its mammoth size and interlinked connections with every other financial institution, anything that shakes J.P. Morgan is likely to rock the rest of the Street. Ever since the start of the banking crisis in 2008, Dimon has been arguing that more government regulation of Wall Street is unnecessary. truth-out.org/opinion/item/9124-how-jp-morgan-chase-has-made-the-case-for-breaking-up-the-big-banks-and-resurrecting-glass-steagallWe are wondering how much wine and how many cigars it took to concock the Dimon Fed Co. words above.
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decoy409
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Post by decoy409 on Jun 4, 2012 9:18:15 GMT -5
And how far are some willing to go staking their very own reputation on other versions and trying to justify? I don't even like Seeking Alpha,but I do follow all the same and pick apart. Why look! POOF! just like Magic! Why it's the same route that somebody is calling conspiracy. Go figure. June 4,2012 - Wall Street Compensation and JPMorgan: It's Déjà Vu All Over Again excerpt - What have we learned from the JPMorgan (JPM) "London Whale" implosion, which has threatened America’s largest bank and could lead to another credit crisis? Well, the most important thing we've discovered is that it is certain to happen all over again unless Wall Street abruptly changes its compensation practices. According to the New York Times description of the risky trade in an articled authored by Azam Ahmed, the London Whale received a $40 million bonus for placing the risky bet, which at one point was profitable. After it declined and resulted in at least a $2 billion to $3 billion loss to JPMorgan, the London Whale exited and swam away with his $40 million. There were no consequences to him. Indeed, the investment community should expect him to resurface at some point at another brokerage firm or, more likely, an unregulated hedge fund. Interestingly, the other side of the trade was a hedge fund manager named Boaz Weinstein who has made tens of millions for his firm by taking the opposite side of the London Whale's risky bet. But where did Boaz come from? He was previously at Deutsche Bank where his own risky trade resulted in almost a $2 billion loss to the bank and contributed largely to the financial crisis. But don’t worry about Boaz, folks. He exited Deutsche Bank with a hefty $100 million-plus in bonuses and went to, you guessed it, an unregulated hedge fund. seekingalpha.com/article/634991-wall-street-compensation-and-jpmorgan-it-s-dj-vu-all-over-again?source=msnWhether folks as ourselves do it,or somebody else,so be it. But diasecting has come to town,and the Tale of the Tape will be revealed no matter how much it is tried to be kept behind the curtain or in the dark.
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Post by jarhead1976 on Jun 4, 2012 12:49:47 GMT -5
" The public doesn't need to be protected from companies making bad investments. Do we also need to regulate decisions to build new factories? Decisions to develop new products? The public was not harmed by JPM's bad decisions. The company and its investors were harmed. Sorry IB your wrong about who pays. I do believe that depositors are at risk since banks no longer bank. Gambling with derivatives only exposes Depostors to the real risk. Debate at CFTC continues. "Sheila Bair, chairman of the Federal Deposit Insurance Corp. between 2006 and 2011, told the participants that the large derivatives hedging operations of major banks carry big risks and that they should be restructured by regulators. She said securities and derivatives activities need to be moved into separately capitalized subsidiaries so that institutions can’t fund risky derivatives transactions with consumer deposits." articles.marketwatch.com/2012-05-31/economy/31908265_1_derivatives-banks-volcker-rule
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Post by Deleted on Jun 4, 2012 19:33:23 GMT -5
"I do believe that depositors are at risk since banks no longer bank. Gambling with derivatives only exposes Depostors to the real risk. Debate at CFTC continues."
When is the last time a depositor lost money?
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Post by jarhead1976 on Jun 4, 2012 20:09:23 GMT -5
I don't know . Let's start with MF Global. "As MF Global entered a tailspin, the brokerage firm tapped customer money to meet its own obligations before filing for bankruptcy on Oct. 31. Nearly six months later, customers are still owed an estimated $1.6 billion." dealbook.nytimes.com/2012/04/24/an-mf-global-trustee-defends-his-inquiry/Like I have said this is just the start.
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Deleted
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Post by Deleted on Jun 4, 2012 20:31:12 GMT -5
You said depositors, which implies people holding CASH at a bank. MF Global customers weren't depositors.
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Post by jarhead1976 on Jun 4, 2012 20:49:41 GMT -5
Sheila Bair said the words" consumer deposits. " we're being used in the derivative plays the banks are using. She ran the FDIC for a while,she has more insight than I do. Maybe I misunderstand?
Either way jp Morgan is in bed with MF Global. Let's see where the cards fall in a few weeks. Consumer, customer, depositor could all be interchangeable.
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Post by Deleted on Jun 4, 2012 20:53:16 GMT -5
Whatever they were doing, the money will get put back. You mentioned the FDIC, so I think you know what my point is....
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Post by jarhead1976 on Jun 4, 2012 21:00:24 GMT -5
I get your drift Bob. Respects. Not real happy with banks for my own reasons. IMO, I would like banks out of wall street and back to banking ,not gambling. With more and more banks failing , how long before the FDIC can no longer back there bets. I read somewhere on the FDIC page were around 930 some banks and credit unions went under since 2000. Someone losses. It's not the bankers. www.fdic.gov/bank/individual/failed/banklist.html
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Post by Deleted on Jun 4, 2012 21:09:02 GMT -5
As long as the person putting the money up knows what's being done with the money, I guess I don't see the problem. The deal with JPM was a huge problem because they were supposed to be hedging (reducing risk) and instead were speculating (taking risk).
The derivatives markets really do serve a legitimate purpose. But in the wrong hands, they can certainly be dangerous.
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Post by Deleted on Jun 4, 2012 21:11:38 GMT -5
Those banks that fail get taken over by the FDIC and are sold to other banks who continue to operate them. I don't think the FDIC actually pays out money to depositors very often. I think they step in before that becomes necessary. Key words there are "I think". I'm not 100% certain of that.
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AgeOfEnlightenmentSCP
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Post by AgeOfEnlightenmentSCP on Jun 4, 2012 21:12:35 GMT -5
I'm trying to care about this story. I really am.
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Post by jarhead1976 on Jun 4, 2012 21:14:22 GMT -5
Lol , hey Paul. Good to see you.
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Post by jarhead1976 on Jun 6, 2012 11:34:40 GMT -5
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pepper112765
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Post by pepper112765 on Jun 6, 2012 11:51:16 GMT -5
JP Morgan Chase's CEO, Dimon is the highest-paid banker in the Finance 50. $23M -- According to an article in today's Washington Examiner, Wall Street CEO pay jumped 20% in 2011. Citigroups CEO was awarded $15M in 2011 (and providing the least shareholder value). Number 1 is Henry Roberts Kravis of KKR & Co, $30M in salary and other compensation.
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djAdvocate
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Post by djAdvocate on Jun 6, 2012 11:57:14 GMT -5
JP Morgan Chase's CEO, Dimon is the highest-paid banker in the Finance 50. $23M -- According to an article in today's Washington Examiner, Wall Street CEO pay jumped 20% in 2011. Citigroups CEO was awarded $15M in 2011 (and providing the least shareholder value). Number 1 is Henry Roberts Kravis of KKR & Co, $30M in salary and other compensation. they are being rewarded for soaking the taxpayers and bilking homeowners.
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Post by jarhead1976 on Jun 6, 2012 12:30:49 GMT -5
It will be all fun and games till interest rates start edging up.
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Post by Deleted on Jun 6, 2012 19:43:34 GMT -5
"JP Morgan Chase's CEO, Dimon is the highest-paid banker in the Finance 50. $23M"
Makes me wonder if there was any funny business going on here. His pay was approved in May. Were announcements of the hedging fiasco purposely delayed until after executive pay was voted on? And if he can deal with the problem before next year, they may not take much ofa pay hit at all?
What do the JPM executives stand to loose as a result of all this?
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Driftr
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Post by Driftr on Jun 20, 2012 10:36:25 GMT -5
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djAdvocate
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Post by djAdvocate on Jun 20, 2012 10:48:36 GMT -5
hope a few more get matching sets for 4th of July.
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workpublic
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Catch and release please
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Post by workpublic on Jun 20, 2012 11:29:44 GMT -5
if we don't have to worry about the cabal making bad bets why did we bail them out? wouldn't the collapse of the world's financial system affect everybody? or was that just a lie to take taxpayer money and give it to the banks? did they really need it? if not no more bailouts let the markets crash. but i think that would affect "the public" at least that's the bill of goods the banks/govt shoved down our throats at the start of the depression. The public was not harmed by JPM's bad decisions. everyone with a retirement portfolio in the market was initially affected. disclosure: I own JPM stock. www.bloomberg.com/news/2012-05-10/u-s-stock-index-futures-drop-as-jpmorgan-reveals-losses.htmlmoney.cnn.com/2012/05/11/markets/jpmorgan-bank-stocks/index.htmRegulators say that if we are going to allow big banks to take risk, then there have to be safeguards in the system, including: forcing them to hold more money (capital requirements); limiting the amount of borrowed money they can use (leverage); making complex trades more transparent; and allowing them to fail if they implode (resolution and recovery). www.cbsnews.com/8301-505123_162-57433631/jpmorgans-$2b-loss-what-it-means-to-you/until the above happens we are all at risk due to the actions of the few.
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Value Buy
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Post by Value Buy on Jun 21, 2012 7:22:39 GMT -5
JPM claims to have sold off about 65% of the bad trade so far.
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Driftr
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Post by Driftr on Jun 28, 2012 8:02:57 GMT -5
Estimate now 9 billion. Oops...
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Post by Savoir Faire-Demogague in NJ on Jun 28, 2012 10:16:15 GMT -5
Estimate now 9 billion. Oops... Yeah, just saw this: www.cnbc.com/id/47888252JPMorgan Trading Loss May Reach $9 Billion Losses on JPMorgan Chase’s bungled trade could total as much as $9 billion, far exceeding earlier public estimates, according to people who have been briefed on the situation. When Jamie Dimon, the bank’s chief executive, announced in May that the bank had lost $2 billion in a bet on credit derivatives, he estimated that losses could double within the next few quarters. But the red ink has been mounting in recent weeks, as the bank has been unwinding its positions, according to interviews with current and former traders and executives at the bank who asked not to be named because of investigations into the bank. Click link for full text.
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djAdvocate
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Post by djAdvocate on Jun 28, 2012 10:32:24 GMT -5
any bets as to whether this loss goes to $10B+?
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workpublic
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Catch and release please
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Post by workpublic on Jun 28, 2012 11:26:39 GMT -5
i think we can get a dart board with big billions on it, at this point. jpm was up $1.36 yesterday, down $1.60 so far today.
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Post by Value Buy on Jun 29, 2012 8:43:27 GMT -5
Out of curiosity, how much does this cut in federal taxes paid to the IRS? Is this why Obama is so negative about Capitalism? How many billions of dollars a day does the Federal Government "waste" every single day? Where is the outrage on that?
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djAdvocate
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Post by djAdvocate on Jun 29, 2012 9:48:38 GMT -5
Out of curiosity, how much does this cut in federal taxes paid to the IRS? Is this why Obama is so negative about Capitalism? How many billions of dollars a day does the Federal Government "waste" every single day? Where is the outrage on that? you just expressed it. i have expressed it. the Tea Party expresses it 24/7. were you expecting the answer to be "nobody"?
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