JPM Derivatives Monster

Nah, when the aliens show themselves, THAT will end the market. What happens when all of our technology suddenly becomes obsolete?
 
What specifically would happen to the world economy and to the US economy if JPM's derivatives exposure "blew up" on them?? I hear alot about it, but I've never heard the specifics of what would happen.

Would the whole banking system "freeze up"? Where would interest rates go? I don't know if anyone can really grasp these kinds of things happening.
 
counterparties are corporations that issue bonds, insurance companies, hedge funds....

article is sensationalistic but it sure gets the point across...

imo derivatives dealing banks are aware that they pose a systemic risk but are confident the fed will bail them out...the "too big to fail" notion is well ingrained on the street....
 
Originally posted by thetraderprofit
It wasn't just the banks. I know in the past AIG has been active in the derivatives market and it's chart sure looks like the banks.
More...
ATM machine for nitro:

AXP/AIG pair.

nitro
 
We ought to post a lookout to alert us to any nervous looking Wall street types lining up at the safe deposit box counter at the bank.
 
Originally posted by Babak
http://www.tanrange.com/s/ChairmansCorner.asp?ReportID=40632

First, this guy is biased and second, I think he means the Federal Reserve pumped in liquidity not out. Otherwise, I think he's on the money because Brazil's own rally didn't have followthrough. BOVESPA gapped up on 8/8 and then wilted to pre-gap up level on 8/9.
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"As the equity market wilted the Federal Reserve pumped out liquidity in terms of monetary aggregates at record rates. This grease on the wheels of the market was falling flat on its face. The powers that be, seeing this, knowing a derivative disaster is nearing and seeing the dollar at a threatening level to US treasuries moved to squeeze the shorts."

i think he DID mean "pumped out" implying that the fed was adding to the "falling" market, but upon realizing the impending derivatives disaster decided to then add liquididty, i.e. sqeeze the shorts. just my humble opinion.
 
yeah...that conspiracy theory stuff...it can be compelling, persuasive, and may even be true...probably partly true...

I shorted JPM on Friday like a fool without considering what the Brazil deal would mean. I was taken by the 'news' that WCOM found more losses. The headlines were careful to point out that JPM had the greatest exposure (followed by C and BSC). They're vulnerable though. I'm watching.
 
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