I was reading this over at the Huffington Post this morning, and I began to wonder, when was the last time Americans didn't have to worry about banks?

I know, back when Glass-Steagall was still on the books.

Isn't it time to break up these banks? Separate out investment banks from community banks?

Too big to fail is too big to exist.

http://www.huffingtonpost.com/2012/05/10/jpmorgan-chase-london-whale_n_1507662.html

http://www.huffingtonpost.com/2012/05/10/jpmorgan-chase-huge-loss_n_1507892.html

being on welfare was something one would be ashamed of and get off of as soon as possible.

I remember when people expected to work for what they get, and not camp out in public parks and block traffic to demand the government give them stuff.

I remember when someone signed an agreement knowing its conditions up front, they did not run to the government later and demand they throw out what they had agreed to...

Yes Willy, I remember the good old days, and I do miss them...

-- Modified on 5/11/2012 6:20:56 AM

      In fact I bought 500 shares this morning. Would have bought more except for that restraining order the beneficiaries of my estate got to restrict my purchase of financial stocks. But anyway the point is that when a great company like JPM goes on sale that is the time to buy its stock, not talk about breaking up the company.

       Flying first class on the astral plane, MrNogood will probably tells us JPM is “doomed”
when he lands, or beams down, or however he does it.  But he’s been right about the big banks about as often as St. Croix signs petitions to repeal Proposition 13.

       The solution to errant trading like this is not more government regulation but simply to let the market punish the company and the company punish the traders. That is exactly what is happening – most of the errant traders have fired and the Whale is soon to follow. Meanwhile the market punishes JPM’s stock price not bc a $2 billion loss is a problem – they offset half of that loss in securities trading – but bc we all though Jamie Dimon was more on top of things than this.

      But buy now Willy and I will guarantee you your stock will be worth $5 a share more in November than it is today – and in the meantime you will get a 3.1% dividend while you wait.

When the mortgage crisis hit I was shocked how people who signed these insane mortgages were cast as victims.  Now they are trying to do the same thing with student loans.

...the FBI reported a 1411% jump in reports of mortgage fraud between 1997 and 2005.

THIN AIR!!! Our whole fiscal system is backed by money these bankers pull out of thin air.. and these banks PREY on people with this funny money...


Why should it matter to them that they get paid back since they pulled the money out of thin air>?


You're on koolaid if you don't see something wrong with this system

We are talking about people entering into legal contracts, agreeing to those terms, and then wanting to use the power of government to change them.

Please stop using this age old liberal ploy of changing subjects. If you want to discuss something different, start a new thread.

-- Modified on 5/12/2012 4:57:49 AM

If you're going to be stupid today, hell why not buy 1000 shares of RIMM. Your beneficiaries must be your wife and kids. You need more than a restriction from buying stocks. You need help. Your family needs to intervene and get you help NOW. You already own Bank of America. JPM is dead money for awhile. You might, and I emphasize might get a dead cat bounce on this stock. If you do, damn it marikod, please in God's name, SELL.

Before this JPM debacle, I thought Dimon was the best banker out there. I do hope JPM has a succession plan in place, because if I'm on the JPM board I will give Dimon two choices. First, you can resign. Second, if you don't resign, you're fired. Yes, like you said you fire the traders, but at the end of day, you fire the leader, whether it's in business, sports, or government. Hell, I'm still waiting for Steven Chu to fall on his sword (oops he's Chinese not Japanese) for his Solyndra fuck up.  

who was so risk averse he kept all of his money in his "money bin" instead of investing it in the market.

     You of all P & R posters should be more attune to the fundamentals of the stock instead of headline hysteria. Is this a systemic problem for the big banks like the cap on swipe fees or restrictions on ATM charges which will limit profits every day for years? No, this is one event that is easily correctable. Do you think anyone else at JPM is going to sell outsize amounts of credit default swaps? I don't think so.

JPM was going to do a $15 billion stock buy back. Okay, so now it will only be $13 billion.

     Now go take a bath in your own personal money bin and think about how while that money is safe, it's not going to be worth 7% more in November, unlike my JPM.

I'm calling your wife and kids. You need to have your trading status halted immediately.

I really want you to think about what you are doing. If JPM was your only financial investment, and since you are only investing about $19K, we could consider this a short-term speculative play. But no mari, you have an addiction to financial companies. You are still underwater with Bank of America after all these years. You kept buying more stock all the way down, but your argument was "BAC is a huge franchise". Well Buckwheat, their stock is only worth what investors will pay, and that is less than your cost basis.

Oh yes, how about Goldman Sachs. A little over a year ago you were going to buy GS at $150 a share. You said it was a steal. Best investment firm in the known galaxy (sic). What's it trading at mari? You have an addiction to financial stocks. Say it mari, say it. This is the first step in St. Croix's 12 step process (lol).

Investing is OK, but please diversify a little. Try something else. Don't keep making the same mistakes.

P.S. Please tell me you at least put in a stop loss just in case. But if it does pop to $40, just sell. One last thing, why did you buy it this morning? You should always wait a few days to let the selling subside.

-- Modified on 5/11/2012 12:17:35 PM

wanted to hedge with CDS's in the event some of those loans went bad. They then began to think that maybe the economy was getting better and these loans might payoff afterall so they "hedged the hedge", which in effect meant they were bullish on that portfolio.

I'm assuming that the loss was generated because the portfolio is NOT performing well. Does'nt that raise alarmbells for you for ALL similar portfolios under same management?

I don't know nearly enough about this level of finance to criticize your decision one way or another. But considering how many loans are in underwater and will be for quite some time, my greatest fear is these banks are being held up by accounting manuvers and artificially low interest rates rather than sound fundamentals.

'mari'-ried to a stock or sector!

Quote:



-- Modified on 5/11/2012 10:19:09 AM

I don't fully understand it yet.

But the Whale initially sold CDS on an obscure index of blue chip American companies; if they defaulted, JP would have to pay on the swaps. The index then moved int he wrong direction and the Whale was then forced to buy CDS to protect against having to pay out on the ones he sold.

       I think this is the hedge on the hedge that you mentioned. Most of the loss at this time is a paper loss; the single biggest swap the Whale wrote does not even come due for a number of years. Depending on how the index moves this could be a profitable swap or it could cause a bigger loss than calculated.

      So I'm not sure the problem is "are they other portfolios?" - but rather how will the index move which in turn deepens or lessens the loss. This is no liquidity in the swaps market right now so JPM can't get out of the trade.

     So of course there are alarm bells - but the size of the estimated losses I heard so far is miniscule compared to the JPM earning machine. The stock price decline is based on panic and not really underrstanding the situation rather han fundamental - that is why I bought.