Don't get confused, JPM is not the whole market

H

hajimow

While I believe JPM will go below 35 and maybe 30 in the near future but we should use this selling to buy the other strong sectors in the market or even buy some strong financial stocks. As I said in my earlier post, I believe selling JPM and buying SPY would be an excellent trade. I see Tech stocks might start to shine again.

Also watch how YHOO might recover today. Margin calls pushed it to $14.80 at open.
 
Quote from joshuatree123:

What if JPM, along with other banks, hold the shares of these "strong stocks".
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What? !!!. Two irrelevant things. Lets assume that they did. They are not under margin call to sell their AAPL shares to cover their CDS issues. Two different deptarments. 2B is a big money but nothing to JPM. Two days later everyone will forget that. The same thing happened to UBS a few months back. A rouge!! trader lost 2B in UBS.
 
What is happening today is another super strong undisputed proof that market will and wants to go higher. How much higher? Maybe 7% in a couple of months. Just enough to smash shorts and make them blow up their accounts (if they are shorting the market).
Market is also preparing for FB IPO rally.
 
We all knew Bruno Iksil would screw up eventually...!:eek:

Iksil may have amassed a $100 billion position in contracts on Series 9 of the Markit CDX North America Investment Grade Index, counterparts at hedge funds and rival banks said in April. They based their estimates on the trades and price movements they witnessed as well as their understanding of the size and structure of the markets. The positions amounted to tens of billions of dollars, under the firm’s own math, a person familiar with its view said at the time.

The trade on the index probably wasn’t a one-way bet, the market participants said. Iksil may have offset it by buying protection on the same index with contracts that expire about seven months from now, the people said. That strategy would pay JPMorgan the difference between the long-dated contracts and the short-dated ones, and the trade would gain when the gap narrows. The hedge would end in December unless another trade is made to replace it.
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http://www.bloomberg.com/news/2012-05-11/jpmorgan-loses-2-billion-as-mistakes-trounce-hedges.html

But I think JPM will get out of it OK...
 
Quote from joshuatree123:

Haha. I dont think so. I think it goes way beyond just 2 billion.
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You mix two different subjects. I don't know it is 800M or 2B or more. Actually I don't trade JPM and have no plan to do that. You said because JPM has other companies shares, that will drag the market down. The reason that market was down earlier today was the market was nervous and since financials are a part of broad market, it took it down. As I said there are many strong sectors (like tech) that will push the market higher. A few days later financials will also join the rally because everyone will forget what happened to JPM.
 
Quote from joshuatree123:

Who knows how deep this actually goes or if it stops with JPMorgan. The way GS, BAC, etc. are trading it doesnt seem like this has stopped with just JPM. These banks hold huge portfolios of stock and if they need money then they will sell it.

If at all anything, this big loss demonstrates a chaotic culture at JPM and the other banks. I dont think it stops with just 2 billion or JPM.
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Not really... they're mostly hedged and they're not unwinding any positions... So... I don't see a major catastrophe coming JPM's way.
 
By the way, they are into trading business and in trading, you win and lose. They have not promised to always have winning trades. As I said, 2B gain or loss should be a little bit over normal to them. They have not blown up their accounts. JPM is angry why they lost.
 
Quote from hajimow:

What if JPM turns green today ? !!!:confused:
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It will be a testament to the level of manipulation in this sorry market. But make no mistake, it will happen.
 
2B is nothing these days, its like 2M was in the early 1900s. With all the money printing, you really don't impact the market until you see trillion dollar losses. Yes, trillion. I mean, look at the Fed, you don't see them doing 2B QE, you see them buy 1.25 trillion MBS, or expand their balance sheet to 3 trillion. Billions mean nothing these days.
 
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