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Harpooning the Whale
 

Edmundo Braverman's picture
ST
(Human, 14,354
 
Points)
 on 5/22/12 at 7:30am

As the loss to JPM approaches a reported $5 billion, I thought it would be a good time to post a video explaining what really happened and who was behind it. Not surprisingly, the Wall Street Journal does a great job with the following video. The bank is struggling to unwind the trades and the other traders in the market are seizing the opportunity to make JPM suffer. I'm not sure Jamie Dimon will survive this, especially if the loss plunges the bank into the red for the next quarter. What do you think? Will Dimon get to keep his job? And did he just hand regulators everything they need to ban prop trading in London?

Tags:

Comments

happypantsmcgee's picture

Such terrible timing on top

O
(Almost Human, 9,621
 
Points)
 on 5/22/12 at 8:03am

Such terrible timing on top of an already awful situation.

If I had asked people what they wanted, they would have said faster horses - Henry Ford

shorttheworld's picture

excuse the ironic logic in

EN
 
Points)
 on 5/22/12 at 8:05am

excuse the ironic logic in what im about to say but you cant be retroactive about risk management, only proactive about it.. i never understood why axing CEOs over certain semi one time issues or other people when theyve generally done very well happens so often, esp when they get golden parachutes into other cozy exec jobs at other places right after (unless youre dick fuld )

I need a crib, a big estate, I need a boat and that need a lake, I need some salmon that need a plate, that need a chef so I feed my safe

From trading equities to slanging wine in Latin America

A ship is safe in harbor, but that is not what a ship i

happypantsmcgee's picture

shorttheworld: excuse the

O
(Almost Human, 9,621
 
Points)
 on 5/22/12 at 8:06am
shorttheworld:

excuse the ironic logic in what im about to say but you cant be retroactive about risk management, only proactive about it.. i never understood why axing CEOs over certain semi one time issues or other people when theyve generally done very well happens so often, esp when they get golden parachutes into other cozy exec jobs at other places right after (unless youre dick fuld )

Totally understand but they're being fired for a lack of institutional control to put it in the words of the NCAA. You fucked up by not managing risk so now pay the price.

If I had asked people what they wanted, they would have said faster horses - Henry Ford

shorttheworld's picture

and heres a ton of money!

EN
 
Points)
 on 5/22/12 at 8:08am

and heres a ton of money! while we put a lesser capable person in woo lol

I need a crib, a big estate, I need a boat and that need a lake, I need some salmon that need a plate, that need a chef so I feed my safe

From trading equities to slanging wine in Latin America

A ship is safe in harbor, but that is not what a ship i

happypantsmcgee's picture

shorttheworld: and heres a

O
(Almost Human, 9,621
 
Points)
 on 5/22/12 at 8:10am
shorttheworld:

and heres a ton of money! while we put a lesser capable person in woo lol

Sounds like a sweet deal to me. 'You suck, here's 20 mil and a permanent vacation'

If I had asked people what they wanted, they would have said faster horses - Henry Ford

IlliniProgrammer's picture

Assuming a DV01 of $100

ST
(Almost Human, 9,216
 
Points)
 on 5/22/12 at 8:12am

Assuming a DV01 of $100 million on a 5 year contract means a notional of $200B, why not just hold the contract to maturity?

1.) Never enter a position that you will need to get out of later.
2.) Ideally, if you are a big player like JPM, buy into a position that you intend to double or triple down in.
--->3.) Talk your book, say you hate this position. That it is an albatross around your neck, etc.
--->4.) Watch the market move against you.
--->5.) Double or triple down into a position you can stay liquid and solvent in for a long time, and do it at a better price.

Work hard, play hard.

Anacott_CEO's picture

Great video

CF
(King Kong, 1,259
 
Points)
 on 5/22/12 at 8:14am

Great video

West Coast rainmaker's picture

Not even considering London,

ER
(Neanderthal, 2,072
 
Points)
 on 5/22/12 at 8:26am

Not even considering London, this is a gift to Democrats in the US pushing for more regulation. You will hear accusations of "gambling with taxpayer money" going into November, as inaccurate as that statement is. It lets them deflect attention from the trinity of the deficit, fiscal cliff, and unemployment, and onto the "evil" financial institutions.

The GOP wants to put in a Wall Street guy? He'll gamble away the all your money! Really, the timing could hardly be worse with the election and much of Dodd Frank still to be written.

trailmix8's picture

anyone else thought it was

AM
 
Points)
 on 5/22/12 at 8:31am

anyone else thought it was strange that the redhead chick said "effectively" almost 10 times in her interview.

RGE's picture

happypantsmcgee: shortthewo

IB
(Orangutan, 315
 
Points)
 on 5/22/12 at 8:33am
happypantsmcgee:
shorttheworld:

excuse the ironic logic in what im about to say but you cant be retroactive about risk management, only proactive about it.. i never understood why axing CEOs over certain semi one time issues or other people when theyve generally done very well happens so often, esp when they get golden parachutes into other cozy exec jobs at other places right after (unless youre dick fuld )

Totally understand but they're being fired for a lack of institutional control to put it in the words of the NCAA. You fucked up by not managing risk so now pay the price.

So your saying that the billions loss are simply the work of a rogue team led by Drew and Iksil? These guys aren’t Jerome Kerviel, at Societe Generale or Nick Leeson at Barings Bank.

Yet, Dimon, appearing on NBC’s “Meet the Press” Sunday said that he just didn’t realize what a terrible job Drew and her team were doing when he brushed off concerns as a “tempest in a teapot.”

Scapegoating is a standard Wall Street and NCAA practice. Junior executives are always the ones to pay the price in a scandal i.e. Dick Fuld at Lehman Brothers, Jimmy Cayne at Bear Stearns and John Mack at Morgan Stanley, which all have fired subordinates when their respective firms were under fire.

UFOinsider's picture

West Coast rainmaker: The GOP

O
(Human, 10,336
 
Points)
 on 5/22/12 at 9:05am
West Coast rainmaker:

The GOP wants to put in a Wall Street guy? He'll gamble away the all your money! Really, the timing could hardly be worse with the election and much of Dodd Frank still to be written.

It's eff'd up, but yeah, it's almost like the banks and GOP are handing the election to Obama. I'm not taking sides, I'm just pointing out the common sense of it. Romney is going to need a really strong sell to explain his case to the public.

YOU JUST GOT TROLLED
http://www.troll.me/images/red-foreman322/dont-you...

UFOinsider's picture

Edmundo Braverman: Will Dimon

O
(Human, 10,336
 
Points)
 on 5/22/12 at 9:08am
Edmundo Braverman:

Will Dimon get to keep his job?

I'm going with yes: they bank lost some money but isn't currently in systemic danger. I also don't think London will move to ban prop: if there's one place where the bankers (and ruling class in general) have more power over the political system than USA/NYC, it's London, they control everything. This trade is much more similar to the MFGlobal bet than Kweku's, and my personal theory is that Dimon set up the desk in London to skirt the rules here. But I still don't see him losing his job, he's just too good at what he does and the bank seems to be protecting him. Perfect example: they moved the last shareholder meeting to an undisclosed location to keep the heat off of him. I see JPM buying back some shares now that the price is low, shoring up its risk controls, and coming out a winner by the end of the year....guess who gets credit for that?

YOU JUST GOT TROLLED
http://www.troll.me/images/red-foreman322/dont-you...

RichardPennybags's picture

One thing for sure, Occupy

ST
 
Points)
 on 5/22/12 at 9:09am

One thing for sure, Occupy LSE is going to start all over again... :(

"Every man should lose a battle in his youth, so he does not lose a war when he is old"

Unforseen's picture

haha, I'm in the part of

(King Kong, 1,099
 
Points)
 on 5/22/12 at 9:20am

haha, I'm in the part of 'when genius failed' where LTCM management starts realizing that the only spreads widening are theirs and not every spread. The market does try to stomp the wounded....

Check out my Blog

UFOinsider's picture

Unforseen: The market does

O
(Human, 10,336
 
Points)
 on 5/22/12 at 9:41am
Unforseen:

The market does try to stomp the wounded....

It's also payback: this guy was out to kill everyone else off and now they're shooting back, mostly because they can. Markets aren't usually forgiving, but I take a lesson in this: Remember how GS got an open ear and an open check from the gov't (and Buffet) because they had so many friends, while Lehman was basically told to get some lube and fuck themselves? Part of it was systemic, but people that (I personally know) used to have Lehman as a counterparty all basically said the same thing: "those guys were fucking assholes and I fucking hated dealing with them. Fuck 'em, let 'em burn. Hell, I'd short them too, just for the fuck of it." Not saying GS is squeaky clean, but they relied more on smarts+connections and less on dickishness+leverage. Sometimes, not being a jerk has its perks.

YOU JUST GOT TROLLED
http://www.troll.me/images/red-foreman322/dont-you...

futuretrader1999's picture

Dimon = shoddy risk

ST
 
Points)
 on 5/22/12 at 12:59pm

IVY for Life

the bank robber's picture

what effects will this have

 
Points)
 on 5/22/12 at 1:38pm
Inept Speculator's picture

It would be a shame to see

EN
 
Points)
 on 5/22/12 at 2:25pm
mb666's picture

I respect Dimon and this is

VC
(Gorilla, 686
 
Points)
 on 5/22/12 at 3:41pm
UFOinsider's picture

mb666: Stop the combination

O
(Human, 10,336
 
Points)
 on 5/22/12 at 3:42pm

YOU JUST GOT TROLLED
http://www.troll.me/images/red-foreman322/dont-you...

mb666's picture

IlliniProgrammer: Assuming a

VC
(Gorilla, 686
 
Points)
 on 5/22/12 at 3:45pm
mb666's picture

UFOinsider: mb666: Stop the

VC
(Gorilla, 686
 
Points)
 on 5/22/12 at 3:47pm
IlliniProgrammer's picture

mb666: Not sure about how

ST
(Almost Human, 9,216
 
Points)
 on 5/22/12 at 4:12pm

Work hard, play hard.

Edmundo Braverman's picture

IlliniProgrammer: mb666: No

ST
(Human, 14,354
 
Points)
 on 5/22/12 at 4:49pm

RGE's picture

mb666: UFOinsider: mb666:

IB
(Orangutan, 315
 
Points)
 on 5/22/12 at 5:10pm
Edmundo Braverman's picture

RGE: mb666: UFOinsider:

ST
(Human, 14,354
 
Points)
 on 5/22/12 at 5:12pm

IlliniProgrammer's picture

Edmundo Braverman: You're a

ST
(Almost Human, 9,216
 
Points)
 on 5/22/12 at 5:54pm

Work hard, play hard.

sambotanman's picture

@ 3:00 it reminds me of

 
Points)
 on 5/22/12 at 8:18pm
mb666's picture

RGE: mb666: UFOinsider:

VC
(Gorilla, 686
 
Points)
 on 5/23/12 at 12:36am
RGE's picture

mb666: RGE: mb666: UFOi

IB
(Orangutan, 315
 
Points)
 on 5/23/12 at 1:53am

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