Did The Fed Just Give Us A Very Big Clue Just How Big JPM's CIO Loss May Be?
Earlier today we mocked Jamie
Dimon for announcing the cancellation of his firm's stock buyback
program, just two shorts months after March 13, when none other than JP Morgan forced the Fed to scramble and release the full stress test ahead of schedule, after Jamie Dimon decided to frontrun the full FRBNY stress test release (whose sole purpose was to determine under what worst case scenario the Fed was ok with allowing JPM and various other Bank Holding Companies to proceed with dividend raises/stock buybacks) and announce just that -
a dividend increase and a stock buyback. Well, in addition to some
well justified egg in Dimon's face, today's results actually have some
far more troubling implications. Because while we now know that the
buyback is over, what we still don't know, because Jamie Dimon
refuses to tell us, is just how big the CIO P&L loss as of close
today. Yes, there are many speculations but nobody knows for sure. Zero
Hedge was the first to suggest based
on reverse engineering of what the potential loss drivers may well
have been, and subsequently the slower media corroborated, that the
total loss would be orders of magnitude greater than the $2 billion
announced on May 10. But how many orders? Well, for what may be a critical clue, we go to the Fed's stress test itself. Presenting Exhibit A - page 73 of 82...
JPMorgan Chase loss only going to get worse
Eric De Groot at Eric De Groot - 3 hours ago
While market force should open a can of whoop ass on JPMorgan, they'll
likely be contained by the financial world's version of mutual assured
destruction known as "too big to fail." The derivatives closet is bulging
with so many skeletons it no longer latches shut. The number being bandied
about now is closer to a range of $6 billion to $7 billion, according to
several people working on...
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Gold attempting to get to that "16" Handle
Trader Dan at Trader Dan's Market Views - 5 hours ago
Gold put in a decent performance in today's session but was stymied at that
psychological resistance level of $1600. It seems as if traders are
basically standing around looking at each other to see who is going to
commit first to buying it above this level.
Right now there is a general hesitation to get too aggressive as there is
yet another, (sigh!) summit this week in Europe, this time in Brussels on
Wednesday, where the market will have to digest whatever fodder these
clowns want to utter. Look for more of the same talk that we got from this
weekend's gathering in Chicago - nam... more »
Mark Spitznagel: The Austrians And The Swan - Birds Of A Different Feather
What is a black swan event, or tail event, in the stock market?
- It depends on who’s asking.
- To those familiar with Austrian
capital theory, the impending U.S. stock market plunge (of even well
over 40%)—like pretty much all that came before in the past century—will
certainly not be a Black Swan, nor even a tail event.
- Nonetheless, the black swan notion is paramount—in perception: Market participants’ failure to expect a perfectly expected event—that is, they price in only Anglo swans despite the Viennese bird lurking conspicuously in the weeds—much like what is happening today, brings tremendous opportunity.
- Nonetheless, the black swan notion is paramount—in perception: Market participants’ failure to expect a perfectly expected event—that is, they price in only Anglo swans despite the Viennese bird lurking conspicuously in the weeds—much like what is happening today, brings tremendous opportunity.
Last November, the IPO deal of the day was Groupon. On the first day of trading, shares rose to a high of $31 from an initial offering price of $20.
By Thanksgiving, the stock had fallen below the IPO price, and only a few months later, uncertainty popped up around the company’s accounting methods and financial controls. The stock fell further, with the market devaluing Groupon by about 50 percent in only six months. How’s that for a group buy? It’s interesting to note that the value of Groupon’s stock has lost more than $13 billion since the peak on the first trading day through April 30.
Read More @ GoldSilver.com
by Mac Slavo, SHTFPlan:
How likely is it that we will actually experience a disaster that brings down our national power grid?
Will the government seize all guns in the United States?
If Continuity of Government response plans are initiated, will they be able to effectively lock down every major city and the country as a whole under a martial law scenario?
Is an economic collapse in our near future?
These and a host of other critical topics are covered in the latest interview from SGT Report with Survival Blog editor James Rawles.
Rawles on Gun Confiscation:
How likely is it that we will actually experience a disaster that brings down our national power grid?
Will the government seize all guns in the United States?
If Continuity of Government response plans are initiated, will they be able to effectively lock down every major city and the country as a whole under a martial law scenario?
Is an economic collapse in our near future?
These and a host of other critical topics are covered in the latest interview from SGT Report with Survival Blog editor James Rawles.
Rawles on Gun Confiscation:
I think it would be impossible to disarm the people of this country. Along with Yemen we’re the most heavily armed society on the planet. It would be absolutely impossible to disarm the citizenry.
There might be an attempt to do it incremently over the course of generations. I think that’s the only way that would happen.
There are so many guns being produced each year – a couple of million guns each year – it’s just mathematically impossible, if not socially impossible, to even envision the logisitics of trying to disarm the American citizenry. It just can’t happen. There’s too many guns in circulation and they’re essentially the final guarantor of our freedom.
Read More @ SHTFPlan.com
By Kevin Michael Grace, Financial Post:
Bill Murphy, Chairman of the Gold Anti-Trust Action Committee, was interviewed May 18.
Q: What do you make of the recent gyrations in the gold price?
A: It’s fascinating because as of [Wednesday], the entire investment world had said that gold was no longer a safe haven, Dennis Gartman and everyone else. It’s ludicrous. The price of gold was orchestrated down, first after February 29, and then about two-and-a-half weeks ago when the insiders knew what the problem was at JPMorgan. Then they got everyone and their mother to sell and short, and everyone was giving up the ship. And Thursday was one of the most stunning days I’ve ever seen; it was up 3% at one point. Everyone was just stunned, the stock market was in the tank; the dollar was higher; other markets were lower. Something dramatically changed or kicked in. Then, [Friday], with another 1% [gain], but the gold cartel was back with their 1%-rule. Normally, they try to calm down excitement, but Thursday gold was back on the radar screen again, with everyone talking about it. I think it’s exhilarating. Yesterday, the open interest on Comex, the common view was thinking it was short covered, but was it was a stunning increase of 16,000 contracts with no buying. This is a really big-league development. I think this bodes extremely well for gold
Q: What is current play in gold manipulation?
Click Here to Read More
Bill Murphy, Chairman of the Gold Anti-Trust Action Committee, was interviewed May 18.Q: What do you make of the recent gyrations in the gold price?
A: It’s fascinating because as of [Wednesday], the entire investment world had said that gold was no longer a safe haven, Dennis Gartman and everyone else. It’s ludicrous. The price of gold was orchestrated down, first after February 29, and then about two-and-a-half weeks ago when the insiders knew what the problem was at JPMorgan. Then they got everyone and their mother to sell and short, and everyone was giving up the ship. And Thursday was one of the most stunning days I’ve ever seen; it was up 3% at one point. Everyone was just stunned, the stock market was in the tank; the dollar was higher; other markets were lower. Something dramatically changed or kicked in. Then, [Friday], with another 1% [gain], but the gold cartel was back with their 1%-rule. Normally, they try to calm down excitement, but Thursday gold was back on the radar screen again, with everyone talking about it. I think it’s exhilarating. Yesterday, the open interest on Comex, the common view was thinking it was short covered, but was it was a stunning increase of 16,000 contracts with no buying. This is a really big-league development. I think this bodes extremely well for gold
Q: What is current play in gold manipulation?
Click Here to Read More
By Emily Brandon | U.S.News & World Report Finance.Yahoo.com:
Growing numbers of older Americans are spending their retirement years
in poverty, according to a recent Employee Benefit Research Institute
study. The proportion of older people living below the poverty line has
been growing steadily since 2005, and many of those people are falling
into poverty as they age and spend down their savings.
Poverty rates for people ages 65 to 74 climbed from 7.9 percent in 2005 to 9.4 percent in 2009, according to the EBRI analysis of University of Michigan health and retirement study data. For older retirees ages 75 to 84, there was an even steeper increase, from 7.6 percent to 10.7 percent over the same time period. But it’s the oldest retirees who are the most likely to live in poverty: 14.6 percent did so in 2009.
Many older Americans are falling into poverty as they age.
Read More @ Finance.Yahoo.com
from TruthNeverTold :
Growing numbers of older Americans are spending their retirement years
in poverty, according to a recent Employee Benefit Research Institute
study. The proportion of older people living below the poverty line has
been growing steadily since 2005, and many of those people are falling
into poverty as they age and spend down their savings.Poverty rates for people ages 65 to 74 climbed from 7.9 percent in 2005 to 9.4 percent in 2009, according to the EBRI analysis of University of Michigan health and retirement study data. For older retirees ages 75 to 84, there was an even steeper increase, from 7.6 percent to 10.7 percent over the same time period. But it’s the oldest retirees who are the most likely to live in poverty: 14.6 percent did so in 2009.
Many older Americans are falling into poverty as they age.
Read More @ Finance.Yahoo.com
from TruthNeverTold :
by Paul Tuccinardi, Whiskey and Gunpowder:
“Centralization induces apoplexy at the center and anemia at the extremities.” ~ Lamenais
The present political system is clearly insane. It suffers from schizophrenia. Around the world, almost no one trusts the politicians, yet almost everyone votes for incumbent politicians who promise to reform the government.
Voters now suspect (correctly) that all Western governments are headed for bankruptcy because of the pension programs and government-funded medicine, yet these two programs are politically untouchable. Voters demand them.
For four decades, soft-core critics of the pension/Medicare systems have come to voters with this announcement: “The two systems can be reformed, but we must act now. If we delay, they will bankrupt the government.” Yet the systems are never reformed.
Then, a decade later, the next group of optimistic reformers comes forward with this same promise: “The systems can be reformed if we just act now.” Nobody believes them. Nobody should. If the programs really can be reformed “if we act now,” then the previous warnings were mere scaremongering. There really was no hurry. So, Congress asks rhetorically: “Why should we believe that we need to hurry now?” Result: the systems never get reformed. Congress kicks the can.
Read More @ WhiskeyAndGunpowder.com
from RTAmerica:
“Centralization induces apoplexy at the center and anemia at the extremities.” ~ LamenaisThe present political system is clearly insane. It suffers from schizophrenia. Around the world, almost no one trusts the politicians, yet almost everyone votes for incumbent politicians who promise to reform the government.
Voters now suspect (correctly) that all Western governments are headed for bankruptcy because of the pension programs and government-funded medicine, yet these two programs are politically untouchable. Voters demand them.
For four decades, soft-core critics of the pension/Medicare systems have come to voters with this announcement: “The two systems can be reformed, but we must act now. If we delay, they will bankrupt the government.” Yet the systems are never reformed.
Then, a decade later, the next group of optimistic reformers comes forward with this same promise: “The systems can be reformed if we just act now.” Nobody believes them. Nobody should. If the programs really can be reformed “if we act now,” then the previous warnings were mere scaremongering. There really was no hurry. So, Congress asks rhetorically: “Why should we believe that we need to hurry now?” Result: the systems never get reformed. Congress kicks the can.
Read More @ WhiskeyAndGunpowder.com
from RTAmerica:
from TF Metals Report:
Looks like it’s time to add a new acronym.
As discussed here ad nauseam for the past several weeks, our current battle is against the spec shorts, both large and small. These momentum-following, bandwagon-jumping leeches were the primary culprits in driving price all the way down to $1528 and $27. After the initial squeeze on Thursday, the heat was turned up even higher on Friday. Overnight and earlier today, these HFTers tried to push things back down but have since been stymied on the Comex. Let’s hope this continues but don’t expect them to give up easily.
Over the weekend, Trader Dan pointed out that gold had moved back above its 10-day moving average. This is step one in alleviating the pressure and flipping the WOPRs to “buy” from “sell”. Step two will be getting above the 20-day near 1615. He’s right about this. Remember, many WOPRs are programmed to run off of technical signals so moving back above key moving averages will help to halt the barrage of sell orders generated by the downside momentum. http://www.traderdannorcini.blogspot.com/2012/05/gold-continues-its-bounce.html
Read More @ TF Metals Report.com
Looks like it’s time to add a new acronym.
As discussed here ad nauseam for the past several weeks, our current battle is against the spec shorts, both large and small. These momentum-following, bandwagon-jumping leeches were the primary culprits in driving price all the way down to $1528 and $27. After the initial squeeze on Thursday, the heat was turned up even higher on Friday. Overnight and earlier today, these HFTers tried to push things back down but have since been stymied on the Comex. Let’s hope this continues but don’t expect them to give up easily.
Over the weekend, Trader Dan pointed out that gold had moved back above its 10-day moving average. This is step one in alleviating the pressure and flipping the WOPRs to “buy” from “sell”. Step two will be getting above the 20-day near 1615. He’s right about this. Remember, many WOPRs are programmed to run off of technical signals so moving back above key moving averages will help to halt the barrage of sell orders generated by the downside momentum. http://www.traderdannorcini.blogspot.com/2012/05/gold-continues-its-bounce.html
Read More @ TF Metals Report.com
by Susanne Posel, Activist Post
In a report from the World Bank, Africa’s economic development was outlined as a “golden opportunity for a green future”.
At the 4th Africa Carbon Forum (ACF) “The vast potential represented by African countries in the fight against climate change cannot be underestimated,” said Christiana Figueres, Executive Secretary of United Nations Framework Convention on Climate Change (UNFCCC).
“The Africa Carbon Forum is where potential projects and developers and funders can meet, exchange ideas, and – it is hoped – take the concrete steps toward greening Africa’s future.”
Read More @ Activist Post
In a report from the World Bank, Africa’s economic development was outlined as a “golden opportunity for a green future”.At the 4th Africa Carbon Forum (ACF) “The vast potential represented by African countries in the fight against climate change cannot be underestimated,” said Christiana Figueres, Executive Secretary of United Nations Framework Convention on Climate Change (UNFCCC).
“The Africa Carbon Forum is where potential projects and developers and funders can meet, exchange ideas, and – it is hoped – take the concrete steps toward greening Africa’s future.”
Read More @ Activist Post
from Chink in the Armor:
In 62 BC, the Roman Senate was in a terrible state. They functioned
more like a city council than as an imperial government. The influx of
wealth and slaves from the Carthaginian wars meant business was more
about banking and finance than anything else. Business men were more
interested in state contracts and the financing of games than they were
in trade, true commerce and the building of true wealth. It was all
about pleasuring their egos and pandering to the hedonistic whims of the
citizenry
Ruinous taxation impoverished the people compelling them to turn to the money lenders to meet their obligations and debt collection turned them into virtual, if not absolute slaves. This had the effect of concentrating the real wealth, the land, into fewer and fewer hands and the use of slaves in farming sent the landless poor to the larger cities which became populated with wretched human beings destitute of all moral and social development.
“At bottom, usury was the cancer of the Republic. […] seldom had a people sunk so low. Bereft of religion, morality and all the social virtues, the dole-fed masses wallowed in vice. Luxury begot brutality and brutality licence; licence led to celibacy, and childlessness became more and more prevalent. To these degenerates, licence, spelt liberty, but to the plutocrats, liberty spelt power, profit, and an unlimited scramble for wealth, until money became the sole link between man and man.”[1] Sound familiar?
Read More @ ChinkintheArmor.net
In 62 BC, the Roman Senate was in a terrible state. They functioned
more like a city council than as an imperial government. The influx of
wealth and slaves from the Carthaginian wars meant business was more
about banking and finance than anything else. Business men were more
interested in state contracts and the financing of games than they were
in trade, true commerce and the building of true wealth. It was all
about pleasuring their egos and pandering to the hedonistic whims of the
citizenryRuinous taxation impoverished the people compelling them to turn to the money lenders to meet their obligations and debt collection turned them into virtual, if not absolute slaves. This had the effect of concentrating the real wealth, the land, into fewer and fewer hands and the use of slaves in farming sent the landless poor to the larger cities which became populated with wretched human beings destitute of all moral and social development.
“At bottom, usury was the cancer of the Republic. […] seldom had a people sunk so low. Bereft of religion, morality and all the social virtues, the dole-fed masses wallowed in vice. Luxury begot brutality and brutality licence; licence led to celibacy, and childlessness became more and more prevalent. To these degenerates, licence, spelt liberty, but to the plutocrats, liberty spelt power, profit, and an unlimited scramble for wealth, until money became the sole link between man and man.”[1] Sound familiar?
Read More @ ChinkintheArmor.net
from GoldMoneyNews:
Rick Rule, of Sprott Asset Management, and Alasdair Macleod of the GoldMoney Foundation, talk about the role of gold bullion as a financial insurance and how to invest in gold mining stocks. They also discuss the current state of the global financial system.
With regards to the current fall in precious metal prices, Rule points out that even extreme cyclical variations are to be expected in a secular bull market. He illustrates this point by bringing to mind how the gold price declined by 50% in 1975 before making its greatest gains soon thereafter. Both men agree that gold bullion should not be bought to make money, but as insurance as part of a long-term wealth preservation strategy. When investing in mining equities Rule points out that he makes his decisions on a net present value foundation, and not based on expectations of future metal prices.
Rick Rule, of Sprott Asset Management, and Alasdair Macleod of the GoldMoney Foundation, talk about the role of gold bullion as a financial insurance and how to invest in gold mining stocks. They also discuss the current state of the global financial system.
With regards to the current fall in precious metal prices, Rule points out that even extreme cyclical variations are to be expected in a secular bull market. He illustrates this point by bringing to mind how the gold price declined by 50% in 1975 before making its greatest gains soon thereafter. Both men agree that gold bullion should not be bought to make money, but as insurance as part of a long-term wealth preservation strategy. When investing in mining equities Rule points out that he makes his decisions on a net present value foundation, and not based on expectations of future metal prices.
from KingWorldNews:
With most major markets trending higher, today King World News
interviewed acclaimed money manager Stephen Leeb, Chairman & Chief
Investment Officer of Leeb Capital Management. Leeb told KWN that
Israel is prepping for war and one of the key mining indexes should be
up ten-fold in the next few years. Here is what Leeb had to say about
the situation: “Back in the 1980s I looked at the Dow and the
S&P and I wrote a book about it that the Dow could triple. It
turned out I was conservative. But it’s rare, in fact I can’t remember
ever looking at an index where I could actually say this is an index
that could easily go up ten-fold within the next two to three years.”
Leeb continues @ KingWorldNews.com
With most major markets trending higher, today King World News
interviewed acclaimed money manager Stephen Leeb, Chairman & Chief
Investment Officer of Leeb Capital Management. Leeb told KWN that
Israel is prepping for war and one of the key mining indexes should be
up ten-fold in the next few years. Here is what Leeb had to say about
the situation: “Back in the 1980s I looked at the Dow and the
S&P and I wrote a book about it that the Dow could triple. It
turned out I was conservative. But it’s rare, in fact I can’t remember
ever looking at an index where I could actually say this is an index
that could easily go up ten-fold within the next two to three years.”Leeb continues @ KingWorldNews.com
from CapitalAccount:
Bloomberg reports investors are worried JP Morgan is planning to pull back in the European mortgage bond market in the wake of the CIO disaster, causing significant volatility. JP Morgan is the biggest buyer of European home-loan bonds. Is this just one of many examples of how JP Morgan’s reckless 2 billion dollar trading loss may be felt most by other people and firms, while JP Morgan could, perversely enough, actually be the firm to benefit most?
The numbers seem to indicate that when there is a crisis in the financial industry, there is a push towards more regulation. Our guest on today’s Capital Account, ZeroHedge contributing editor Bob English, argues that the real problem is moral hazard and lack of personal accountability. Combine this with free money lent by the Fed, and you have an environment that is not only hospitable, but ideal for Whales like the one we saw in JP Morgan.
And former Goldman Sachs director Rajat Gupta goes on trial for insider trading today, while entire too big to fail firms arguably engage in this behavior as a matter of normal business by front running their own clients. Meanwhile, it is revealed that the same guy managing risk in JP Morgan’s CIO was fired from a firm a few years ago for overseeing trading losses that resulted in a regulatory probe. So, despite billions of dollars more spent on financial regulation over the years, what are we left with? We’ll talk about what’s missing and why it will continue to fall short of preventing the next systemic crisis.
from RussiaToday:
Bloomberg reports investors are worried JP Morgan is planning to pull back in the European mortgage bond market in the wake of the CIO disaster, causing significant volatility. JP Morgan is the biggest buyer of European home-loan bonds. Is this just one of many examples of how JP Morgan’s reckless 2 billion dollar trading loss may be felt most by other people and firms, while JP Morgan could, perversely enough, actually be the firm to benefit most?
The numbers seem to indicate that when there is a crisis in the financial industry, there is a push towards more regulation. Our guest on today’s Capital Account, ZeroHedge contributing editor Bob English, argues that the real problem is moral hazard and lack of personal accountability. Combine this with free money lent by the Fed, and you have an environment that is not only hospitable, but ideal for Whales like the one we saw in JP Morgan.
And former Goldman Sachs director Rajat Gupta goes on trial for insider trading today, while entire too big to fail firms arguably engage in this behavior as a matter of normal business by front running their own clients. Meanwhile, it is revealed that the same guy managing risk in JP Morgan’s CIO was fired from a firm a few years ago for overseeing trading losses that resulted in a regulatory probe. So, despite billions of dollars more spent on financial regulation over the years, what are we left with? We’ll talk about what’s missing and why it will continue to fall short of preventing the next systemic crisis.
from RussiaToday:
by Andrew Hoffman, MilesFranklin.com:
It’s finally here, the most celebrated – and expensive – IPO in U.S.
history. Facebook priced last night at $38/share, making Mark
Zuckerberg – at age 28 – one of the world’s richest men. Despite
pro-forma, annualized EPS projections of roughly $0.40 per share, the
stock is opening at roughly $40/share, representing an initial forward
P/E of around 100x range. I am knowledgeable of Facebook’s earnings outlook – the only thing that should matter to stock investors – but at its initial (~$110 billion) market cap, it certainly isn’t cheap.
Facebook IPO valuation sets record: Is it really worth $104 billion?
In a nation where nearly all major banks are INSOLVENT, the $176 million of underwriter fees are the most important aspect of the IPO – particularly when the lead “bookrunners” are among the industry’s most insolvent – Morgan Stanley, JP Morgan, and Goldman Sachs. Not that $176 million – split between 33 investment banks – is much more than pennies in the begging cup, but as they say, “something is better than nothing.”
Read more @ MilesFranklin.com
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It’s finally here, the most celebrated – and expensive – IPO in U.S.
history. Facebook priced last night at $38/share, making Mark
Zuckerberg – at age 28 – one of the world’s richest men. Despite
pro-forma, annualized EPS projections of roughly $0.40 per share, the
stock is opening at roughly $40/share, representing an initial forward
P/E of around 100x range. I am knowledgeable of Facebook’s earnings outlook – the only thing that should matter to stock investors – but at its initial (~$110 billion) market cap, it certainly isn’t cheap.Facebook IPO valuation sets record: Is it really worth $104 billion?
In a nation where nearly all major banks are INSOLVENT, the $176 million of underwriter fees are the most important aspect of the IPO – particularly when the lead “bookrunners” are among the industry’s most insolvent – Morgan Stanley, JP Morgan, and Goldman Sachs. Not that $176 million – split between 33 investment banks – is much more than pennies in the begging cup, but as they say, “something is better than nothing.”
Read more @ MilesFranklin.com
Please support our efforts to keep you informed...
Thank You
I'm PayPal Verified
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