JPM and Jamie Dimon Are Serving the Free Lunch

[Daal]

Quote from traderyin:

[B Posting gigantic notional exposure on a company's derivatives book is taking things out of context. [/B]

Its only out of context to the extend that there is no risk in increasing your counter-party exposure, unless the government is in the other side of the trade you take more risk in doing that, if this wasnt the case then corporate bonds would trade at the same yield as treasuries, there is no free lunch

Dimon can ask for collateral but what if the counterparty cant provide and they default?Then he has to try to hedge when the underlying is moving against him(thats why they demanded collateral) and pay the bid ask spread to a new counterparty likely suffering economic losses(unless they are the top trader in the universe who doesnt take losses biting a bid ask spreads in illiquid markets going against them), it doesnt take much of this to wipe out JPM tangible equity which is minuscule compared to their derivatives positions

The thing is the counterparty for MOST of JPM trades is the US government as they said they will backstop the 19 largest banks but there will be probably a few counterparties that will not be backstopped and WILL default

 

[dhpar]

please stop it or you may prove even more ignorant than those 99% ET-ers mentioned above.

what about if total NPV on trades with each counterparty is about zero?

Note that in derivatives all is done under ISDA MA + CSA legal framework, i.e. netting clause. in other words the information above is as close to useless as it gets for judging the risk. it just tells you who is the most active derivatives player (and even this is an approximation). It tells you NADA about risk.

 

[Daal]

Quote from dhpar:

please stop it.

what about if total NPV on trades with each counterparty is about zero?

Yeah that makes a lot of sense, assume the best scenario when there was a bubble in lack of risk management by banking institutions

 

[traderyin]

Quote from Daal:

Yeah that makes a lot of sense, assume the best scenario when there was a bubble in lack of risk management by banking institutions

Your last two posts just show you have zero understanding on the mechanics of OTC derivatives. Please just stop unless you have further proof that Citi or any other govt sponsored entities are in fact underwater on those derivatives trades with JPM.

 

[dhpar]

Quote from Daal:

Yeah that makes a lot of sense, assume the best scenario when there was a bubble in lack of risk management by banking institutions

that was just an example to get you on the right path, i.e. the point is we do not know what these NPVs are and vis-a-vis which institutions. Therefore we do not know what the risks are.

you are an idiotic retail dumbass - i am putting you on ignore. goodbye

 

[Daal]

Quote from traderyin:

Your last two posts just show you have zero understanding on the mechanics of OTC derivatives. Please just stop unless you have further proof that Citi or any other govt sponsored entities are in fact underwater on those derivatives trades with JPM.

Yup, banks did such a great job of of protecting themselves against counterparty risk of AIG didnt they?So much they had to be bailout by the government. MER UBS and all the guys who laid their risk off to MBI and ABK also took large writeoffs when they found out the counterparties were insolvent
Heck Alan Greenspan said he though institutions would manage their risk through conterparty surveillance then he 'found a flaw'
Keep drinking the kool aid, it will go well with the free lunch sponsored by Dimon

 

[traderyin]

Quote from Daal:

Yup, banks did such a great job of of protecting themselves against counterparty risk of AIG didnt they?So much they had to be bailout by the government. MER UBS and all the guys who laid their risk off to MBI and ABK also took large writeoffs when they found out the counterparties were insolvent
Heck Alan Greenspan said he though institutions would manage their risk through conterparty surveillance then he 'found a flaw'
Keep drinking the kool aid, it will go well with the free lunch sponsored by Dimon

Is counterparty risk that got the banks in trouble?

IGNORED.

 

[Daal]

Quote from dhpar:

these numbers mean shit.

Hey Clown, the fed just released the expected loss for JPM for their trading and counterparty book, $16.7b and thats using rosy assumptions and accepting managements words
Still, thats some expensive shit
Moron

 

[Illum]

Anyone trade JPM today? I was going to buy some puts because of GM exposure, but I don't do anything before 10. So I did nothing because of it's strength. But wow the close.... Anyone in this stock either way?

 

[Roman Candle]

Help we need more money. Cock suckers.