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| Re: JP Morgan Chase Execs Vaporize $2B (941258) | |
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Re: JP Morgan Chase Execs Vaporize $2B |
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Posted by Charles G on Mon May 14 17:29:22 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by Sand Box John on Mon May 14 14:07:35 2012. Not quite that small -- more like a $2 bill against that $100 bill. Not quite a pimple on an elephant's ass, but still not anything that would induce people to think JPM is solvency threatened.I bought the stock Friday afternoon (and have been rewarded with a further 3% drop today!) The real story is that, once again, a model that was supposed to be foolproof turned out to fail spectacularly in a tail event (and not even an extreme tail event). Sooner or later, bank executives will figure out that you don't manage risk with models -- you manage risk with real live risk controls and compliance monitoring. |
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Re: JP Morgan Chase Execs Vaporize $2B |
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Posted by Stephen Bauman on Mon May 14 17:33:01 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by JayZeeBMT on Mon May 14 14:34:04 2012. It was YOUR boys, the GOP, that ended the protections against this kind of chicanery that FDR put in place,It was Clinton who signed the repeal of Glass-Steagal. It was urged by his financial advisors - Rubin, Summers, Geithner, et al. True the Republicans did not offer any opposition. Unfortunately, Obama chose Clinton's boys to repair the mess that their action created. |
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Re: JP Morgan Chase Execs Vaporize $2B |
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Posted by JayZeeBMT on Mon May 14 17:33:18 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by Charles G on Mon May 14 17:29:22 2012. Sooner or later, bank executives will figure out that you don't manage risk with models -- you manage risk with real live risk controls and compliance monitoring.In other words, actual supervision. |
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Re: JP Morgan Chase Execs Vaporize $2B |
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Posted by Charles G on Mon May 14 17:34:34 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by Stephen Bauman on Mon May 14 17:26:00 2012. I think so -- or something close to it in this respect. |
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Re: JP Morgan Chase Execs Vaporize $2B |
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Posted by Charles G on Mon May 14 17:37:10 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by JayZeeBMT on Mon May 14 17:33:18 2012. Yes, but not necessarily regulatory supervision. |
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Re: JP Morgan Chase Execs Vaporize $2B |
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Posted by JayZeeBMT on Mon May 14 17:38:47 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by Stephen Bauman on Mon May 14 17:33:01 2012. Glass-Steagall repeal (the Gramm-Leach Act) was signed by Clinton, yes, but it was written and sponsored by Republicans, Senator Phil Gramm and Rep. Jim Leach. Their argument was that modern technology could prevent the kind of chaos Glass-Steagall was enacted to safeguard against. Clinton, having been convinced that technology was the answer, signed the bill. We all later discovered that high-tech devices not only couldn't prevent financial crises, but, in fact, accelerated them... |
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Re: JP Morgan Chase Execs Vaporize $2B |
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Posted by bingbong on Mon May 14 18:08:50 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by Charles G on Mon May 14 17:37:10 2012. Yes, *regulatory* supervision. They have proven time and again they cannot be trusted to supervise themselves in a government-insured environment. They can't even be trusted to act in their own interest.Strict government regulation contained their damage for for 60+ years. It works. It's proven. Time to bring it all back. |
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Re: JP Morgan Chase Execs Vaporize $2B |
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Posted by Charles G on Mon May 14 18:13:29 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by bingbong on Mon May 14 18:08:50 2012. As I said elsewhere in this thread, if a bank wants to attract depositors through accessing the FDIC and having government bailout potential then I am fine with having very tight restrictions on the type of investments they can make.If a bank wants to operate without government bailout support potential, then it should be able to make any investments that it wants to make. Everyone doing business with that bank needs to understand, however, no bailouts are forthcoming. The risk will then manage itself just fine. |
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Re: JP Morgan Chase Execs Vaporize $2B |
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Posted by bingbong on Mon May 14 18:17:29 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by Charles G on Mon May 14 18:13:29 2012. Nobody in their right mind would invest in a bank like that. Nobody in their right mind would accept capital from a bank like that. |
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Re: JP Morgan Chase Execs Vaporize $2B |
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Posted by orange blossom special on Mon May 14 18:22:10 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by Sand Box John on Mon May 14 14:07:35 2012. I didn't know that was the new 100 dollar bill design. I guess I don't got me any of that Obama stash. |
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Re: JP Morgan Chase Execs Vaporize $2B |
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Posted by salaamallah@hotmail.com on Mon May 14 19:32:46 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by Train Dude on Mon May 14 15:47:53 2012. yeah blame it on obamazzzzzzzzz |
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Re: JP Morgan Chase Execs Vaporize $2B |
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Posted by Train Dude on Mon May 14 20:13:25 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by salaamallah@hotmail.com on Mon May 14 19:32:46 2012. I guess your reading skills are equal to your vocational skills? Where did I blame it on O'bummer? |
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Re: JP Morgan Chase Execs Vaporize $2B |
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Posted by Train Dude on Mon May 14 20:19:23 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by JayZeeBMT on Mon May 14 17:38:47 2012.  WARNING: Please stand clear while the Dervishes are spinning. |
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Re: JP Morgan Chase Execs Vaporize $2B |
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Posted by Train Dude on Mon May 14 20:20:52 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by Charles G on Mon May 14 18:13:29 2012. Free market economy - blasphemy! We just shall not hear of it. |
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Re: JP Morgan Chase Execs Vaporize $2B |
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Posted by AEM-7AC #901 on Mon May 14 20:27:10 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by Charles G on Mon May 14 11:18:51 2012. The only thing that will reign in excessive risk taking is the threat of death and insolvency.Aren't we deathly afraid of what could result when these institutions die and become insolvent? We saw how Lehman Brothers played out, and nobody wants a repeat of that or something even worse with a larger bank. |
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Re: JP Morgan Chase Execs Vaporize $2B |
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Posted by Train Dude on Mon May 14 20:31:26 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by Charles G on Mon May 14 11:18:51 2012. The team involved was characterized by Jamie Diamond (CEO) of having made a colossal blunder in predicting global markets. Their mistake cost bank $2 Billion and them their jobs but apparently not their parachutes. |
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Re: JP Morgan Chase Execs Vaporize $2B |
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Posted by JohnL on Mon May 14 22:56:55 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by SMAZ on Mon May 14 13:30:50 2012. Compassionate conservatism only switches on if you earn >$1m/year. Or if you have assets >$10m. Otherwise you can rot.Let’s not forget that Bush has sent the second highest number of people to be executed (leave Iraq out of this) in modern history. How compassionate was that? |
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Re: JP Morgan Chase Execs Vaporize $2B |
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Posted by JohnL on Mon May 14 22:58:23 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by Train Dude on Mon May 14 20:19:23 2012. Hm. Now we can see what’s going on in the remains of your mind. |
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Posted by Train Dude on Mon May 14 23:12:37 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by JohnL on Mon May 14 22:58:23 2012. I guess your mother's day wasn't so hot after all |
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Posted by JohnL on Mon May 14 23:25:19 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by Train Dude on Mon May 14 23:12:37 2012. My mother died in 2001 so, no, we didn’t have a great celebration. I hope you did.You know I don’t mind insults. In fact, I revel in them, provided that they display some wit or ingenuity. And then they could even involve my mother, though she would not appreciate it since she had a very dour Scottish sense of humor. But please try harder. Otherwise we will be forced to conclude that my last post wasn’t a funny insult, it was, in fact, the truth. Unfortunately. |
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Re: JP Morgan Chase Execs Vaporize $2B |
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Posted by Train Dude on Mon May 14 23:34:26 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by JohnL on Mon May 14 23:25:19 2012. I wasn't referring to your mother, John. Why should I show any wit or ingenuity? You certainly don't. But as I said before (and before this thread goes much further) leave us remember who once again cast the first stone, John. Now how did the wife enjoy mother's day? |
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Re: JP Morgan Chase Execs Vaporize $2B |
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Posted by Train Dude on Tue May 15 00:35:38 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by Train Dude on Mon May 14 23:34:26 2012. Crickets? Do I hear crickets? |
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Re: JP Morgan Chase Execs Vaporize $2B |
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Posted by Charles G on Tue May 15 01:59:11 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by bingbong on Mon May 14 18:17:29 2012. Are you kidding? What do you think the investment banks were before the crisis? Some of them went as far as to buy savings banks so that they could qualify for bailouts.Plenty of people would invest in banks that didn't have a governmental backstop. As far as not accepting capital from them -- why not? |
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Posted by SelkirkTMO on Tue May 15 02:43:34 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by Charles G on Mon May 14 18:13:29 2012. There's the thing though. Lehman assured me that my retirement money was safe, and protected by the Fed. Guess what happened?Curiously, it was JP Morgan that was screaming the loudest about how having to disclose risks and following existing regulations was communism. Fuck'em. |
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Posted by salaamallah@hotmail.com on Tue May 15 02:59:19 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by Train Dude on Mon May 14 20:13:25 2012. sure you did and his name is obama |
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Posted by salaamallah@hotmail.com on Tue May 15 02:59:29 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by Train Dude on Mon May 14 20:13:25 2012. sure you did and his name is obama |
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Posted by Mr Mabstoa on Tue May 15 03:05:50 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by salaamallah@hotmail.com on Tue May 15 02:59:29 2012. Obama's now in favor of gay marriage and you're not, so how does this play in the vacancy of your head? |
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Re: JP Morgan Chase Execs Vaporize $2B |
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Posted by Charles G on Tue May 15 05:14:17 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by AEM-7AC #901 on Mon May 14 20:27:10 2012. I think credit markets froze not because Lehman went down, but because Lehman went down and AIG didn't on the same weekend. You couldn't tell who was going to be bailed out and who wasn't. Making loans and accepting credit is a fairly simple game -- you are just trying to assess the likelihood of being paid back and be rewarded for the risk you take that you won't take back.Lehman's failure ended up being quite simple. You took a massive write-down on whatever you had coming from them and tried to get the best settlement you could from the liquidator. If Lehman owed you $100 Million on a particular mortgage security, you might have taken $40 Million from them on the Friday before the collapse and might have been thrilled to get $10M from them In the case of AIG, if they owed you $100 Million on the same exact mortgage security, you might have taken $50 or 60 Million from them on that same Friday before the collapse -- but on Monday you would have only accepted the full $100 Million. Credit markets froze (in part) because you could no longer assess the risk that you would or wouldn't be paid back -- you didn't know if the government would step in to back a firm or not. So in a matter of days, global credit ground to a halt. My hypothesis (which, of course, is worth about as much as the paper you would print it on if you actually thought enough of it to print it!), is that had AIG also been allowed to fail you would have seen global credit markets screech to a halt for a few weeks. During this time the market would have forced every player in the industry to "lift her skirt" and deals would have been struck everywhere and the entire mess would have been unwound in a matter of a month or two. |
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Posted by Charles G on Tue May 15 05:22:41 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by SelkirkTMO on Tue May 15 02:43:34 2012. You had a retirement account with Lehman that you lost when they went bankrupt? This would make you the only person in that situation, and you should contact the appropriate regulators. |
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Posted by SelkirkTMO on Tue May 15 05:55:47 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by Charles G on Tue May 15 05:22:41 2012. Nope ... ended up with ten cents on the dollar. Long story ... still ongoing. |
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Posted by Fred G on Tue May 15 06:00:51 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by Train Dude on Mon May 14 20:19:23 2012. What spin? JayZee was correct.your pal, Fred |
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Re: JP Morgan Chase Execs Vaporize $2B |
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Posted by Fred G on Tue May 15 06:15:26 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by Charles G on Tue May 15 05:14:17 2012. During this time the market would have forced every player in the industry to "lift her skirt" and deals would have been struck everywhere and the entire mess would have been unwound in a matter of a month or two.That's a long time by current standards. your pal, Fred |
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Posted by Charles G on Tue May 15 06:53:45 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by SelkirkTMO on Tue May 15 05:55:47 2012. 10 cents on the dollar from an investment you made in Lehman or in a product they recommended? Then you're just realizing the results of your investment skill (or lack thereof -- see my investment in JPM from Friday).10 cents on the dollar that you invested in an account held at Lehman? Then you would be the only person on the planet with that problem. |
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Re: JP Morgan Chase Execs Vaporize $2B |
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Posted by Charles G on Tue May 15 07:00:36 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by Fred G on Tue May 15 06:00:51 2012. He wasn't correct at first, and he still isn't.He was 100% disingenuous when he claimed "your boys, the GOP" had overturned part of Glass Steagal. It was easily shown that this was a law signed by a President Clinton and supported by his economic advisory team. Simple research further shows that the law passed in the House by a vote of 362-57 and the Senate by a vote of 90-8 -- meaning this was anything but a partisan issue. Don't believe everything you read. Especially on OT Chat. |
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Posted by Charles G on Tue May 15 07:10:39 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by Fred G on Tue May 15 06:15:26 2012. Not really. Many would say that the credit markets are still frozen.The numbers I've seen for JPM Chase are that they have $360 Billion in outstanding credit derivative "bets", but only $17 Billion in actual small business loans outstanding. The Fed keeps interest rates artificially low so that the economy can get re-started/kick-started/jump-started. The banks borrow at these ridiculously low rates, but instead of then re-loaning the money out they make all kinds of derivative bets. What is the point of a low Fed funds rate if the money never actually makes it to the economy? The big problem is (has been, and continues to be) that President Obama's economic team (much like the Bush team before them) believes that the country's economic health and the economic health of Wall Street and particularly the large banks are one and the same. They are not the same -- and in many cases are completely divergent. |
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Posted by Fred G on Tue May 15 07:12:13 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by Charles G on Tue May 15 07:00:36 2012. He correctly identified the Gramm-Leach Act, which you neglected to mention.your pal, Fred |
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Posted by Fred G on Tue May 15 07:15:11 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by Charles G on Tue May 15 07:10:39 2012. In 2008, I and several other businessmen I know personally had our lines of credit frozen. If that went on for a couple of months we would have been out of business.your pal, Fred |
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Posted by Charles G on Tue May 15 07:32:36 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by Fred G on Tue May 15 07:12:13 2012. I discussed Gramm-Leach (or, more specfically the reinstitution of some of the Glass-Steagal provisions) with Stephen elsewhere in the thread.His initial post was a crock of lies. He then responded to Chris claiming it was the GOP that had created the situation that led to this. Stephen pointed out to him that it was a Democratic president that had signed the law, and he claimed that Clinton had been duped. It has now been pointed out that the legislation was fully bipartisan. People believe the bullshit that guys like this post because they want to believe that it is true. It is no different than those on the other side who believe President Obama is sneaking Rev. Wright into the White House after dark to share a meal of Sauteed Dog and plot the downfall of the white man. They believe it because they want to believe it. More and more people, it seems, are making their political judgments this way -- 20 years ago there were fringes of both political parties that believed the other party was wrong on everything and had evil intentions. This has grown on both sides to be far more than fringe elements. They want to believe it makes things easier. You can just demonize the other guy, claim they are both evil and stupid and as a result the party you support must have the better mousetrap. It's far easier than digging in and really understanding where we are, how we got there, and most importantly how we move forward. Because that would involve recognition that your guys, my guys, and everyone else's guys made some colossal blunders along the way. The fact is that it isn't easy. There is no politically expedient solution that is going to please 99% (or 90% or even 50% or probably 20%) of the electorate. If the U.S. gets to the point where political decisions are made based on the idea that one party is evil and therefore whatever bullshit the other party comes up with is the right solution, then, well, we're all fucked. |
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Re: JP Morgan Chase Execs Vaporize $2B |
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Posted by Fred G on Tue May 15 07:35:24 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by Charles G on Tue May 15 07:32:36 2012. The fact is that it isn't easy. There is no politically expedient solution that is going to please 99% (or 90% or even 50% or probably 20%) of the electorate. If the U.S. gets to the point where political decisions are made based on the idea that one party is evil and therefore whatever bullshit the other party comes up with is the right solution, then, well, we're all fucked.I agree with your entire post, but this sums it up nicely. your pal, Fred |
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Posted by GP38/R42 Chris on Tue May 15 07:49:32 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by Fred G on Tue May 15 07:35:24 2012. I also totally agree. Well said. |
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Posted by Fred G on Tue May 15 08:15:06 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by GP38/R42 Chris on Tue May 15 07:49:32 2012. LOL!your pal, Fred |
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Posted by AlM on Tue May 15 09:06:35 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by Charles G on Mon May 14 17:24:39 2012. Nuclear bombs never develop if firms know there are no bailouts coming.Your evidence of that would be what? Do you think Lehman Brothers or AIG actually realized how much risk they were exposing themselves to? PS. I despise the idea of bailouts. I just don't see how they can be avoided if massive banks are allowed to take huge risks. There will always be some bank who doesn't realize they are taking the risk, or whose managers don't care. |
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Posted by Stephen Bauman on Tue May 15 09:35:24 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by Charles G on Tue May 15 07:32:36 2012. the idea that one party is evilI think that's a reasonable hypothesis. The only problem is that we cannot seem to agree on which party that is. |
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Posted by Stephen Bauman on Tue May 15 09:42:57 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by Charles G on Tue May 15 07:10:39 2012. The numbers I've seen for JPM Chase are that they have $360 Billion in outstanding credit derivative "bets", but only $17 Billion in actual small business loans outstanding.The Fed keeps interest rates artificially low so that the economy can get re-started/kick-started/jump-started. The banks borrow at these ridiculously low rates, but instead of then re-loaning the money out they make all kinds of derivative bets. What is the point of a low Fed funds rate if the money never actually makes it to the economy? Do I sense that eliminating the banks as middlemen by going for a government jobs program might have been a more prudent approach? |
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Re: JP Morgan Chase Execs Vaporize $2B |
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Posted by Charles G on Tue May 15 09:57:41 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by Stephen Bauman on Tue May 15 09:35:24 2012. I think that's a reasonable hypothesis. The only problem is that we cannot seem to agree on which party that is.I'd be more inclined to believe that both are. |
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Posted by Charles G on Tue May 15 11:56:53 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by Stephen Bauman on Tue May 15 09:42:57 2012. I don't think so -- I'm of the school that believes government rarely makes a situation better. Given the politics in place, a government jobs programs in 2009 would have funneled even more people into solar panel installation, website design (Hi Julia!) and assorted other "green technology jobs" that for the most part would be dead ends for the people involved. |
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Posted by Charles G on Tue May 15 12:07:46 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by AlM on Tue May 15 09:06:35 2012. Look at other industries for which there are no bailouts.In my industry, reinsurance, there are no bailouts. You simply don't place risk with anyone who you don't think can pay the loss -- and even if someone can pay the specific loss you don't over-expose yourself to any one name on an aggregation of losses. Alternatively, look back to the 1980's. The investment banks did just fine. Why? In no small part because their own money was at stake and they knew no bailout would be forthcoming. So they managed their downside risk. Meanwhile, who went bust? The Savings and Loans where, (surprise!) a bailout was almost immediately available. Or, look at the 1990's and the failure of Long Term Capital Management. The investment banks money was again at risk -- so who bailed out LTCM? The investment banks did so collectively -- because doing so mitigated their total risk. There was no reason to expect a government bailout for a hedge fund, so the banks did it themselves. If your own money is at risk, you always manage your downside and you always find a solution before a bankruptcy happens. If someone else's money is at risk and there is a regulator watching, you worry about how you can leverage capital and use a model to minimize capital requirements. |
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Posted by salaamallah@hotmail.com on Tue May 15 15:11:45 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by Mr Mabstoa on Tue May 15 03:05:50 2012. ?? |
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Posted by Train Dude on Tue May 15 18:28:06 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by Charles G on Tue May 15 05:22:41 2012. He's always a victim of other people's mistakes. He's never responsible for his own actions.Lehman lost his money. Pataki caused his house to flood. Others sabotaged his train causing him to lose his job. This is today's liberal. No need to take any responsibility for failure. It's got to be someone else's fault. |
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Posted by SelkirkTMO on Tue May 15 18:29:31 2012, in response to Re: JP Morgan Chase Execs Vaporize $2B, posted by Train Dude on Tue May 15 18:28:06 2012. Yep ... it's all OBAMA'S fault. :) |
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