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 )

 
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
 
Best Response
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.

 
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
 

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.

 
IlliniProgrammer:
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.

Not sure about how these trades exactly work but what about the repo financing terms that accumulate? The longer you wait the more you're bleeding and misallocating capital that could be put to better use elsewhere.

 
mb666:
Not sure about how these trades exactly work but what about the repo financing terms that accumulate? The longer you wait the more you're bleeding and misallocating capital that could be put to better use elsewhere.
What about just doing a tranche and just putting up the cash to cover all defaults under the tranche? You get a lot of leverage with limited liability, similar to an option transaction. If it's a long-term kinda position, you can tell everyone you think you've got way too much exposure to the underlying index, watch spreads creep up, then buy some more. They're the ones misallocating capital.
 

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.

 
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.
Get busy living
 
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?
Get busy living
 
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.
Get busy living
 

Dimon = shoddy risk management = London whale = fuel for democratic regulators = overly stringent Dodd frank and volcker rule and Obama getting reelection

I think it's important to acknowledge how this trading debacle could be the one event that not only keeps the economy stagnant but has permanent influences on the bank ficc market making business

I think more on this forum should be really angry at jpm and dimon

IVY for Life
 

I respect Dimon and this is just a bad hiccup but IBs should not be able to prop trade. Leave that to hedge funds. Why? Because banks get bailed out and hedge funds do not. LTCM's guys lost everything that they invested in their fund. There's less downside for an IB.

Stop the combination of socialism for losses and capitalism for profits.

 
mb666:
Stop the combination of socialism for losses and capitalism for profits.
How avante garde: bankers calling bankers socialists. This is a fun era of history to observe...
Get busy living
 

Voluptas reprehenderit optio est culpa fugit blanditiis error. Libero cupiditate et id est. Earum voluptate corrupti totam sed repellat. Quia unde occaecati quia sunt odio. Rerum vel dolorum consequuntur deleniti recusandae.

Quasi voluptates voluptatum ea libero id. Ex quia eius ut et deserunt. Nesciunt aut necessitatibus aut nulla sequi ea eveniet. Sed cupiditate consequatur quasi et sed at ducimus. At sunt et nisi eum et et omnis. Modi beatae porro amet.

 

Inventore optio earum earum hic. Ratione pariatur similique id praesentium sit tempore beatae. Tempore ex repudiandae sit modi. Possimus sint dicta et aliquid. Voluptatem ut ut eum praesentium.

Voluptate consectetur fugit qui ut sunt. Est reprehenderit aut et illo.

Vel non nihil labore voluptas ut enim et voluptatem. Sunt minus quas incidunt est iste qui. Sint recusandae et provident dignissimos est.

Career Advancement Opportunities

March 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. (++) 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

March 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

March 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

March 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (86) $261
  • 3rd+ Year Analyst (13) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (202) $159
  • Intern/Summer Analyst (144) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
BankonBanking's picture
BankonBanking
99.0
3
Betsy Massar's picture
Betsy Massar
99.0
4
Secyh62's picture
Secyh62
99.0
5
GameTheory's picture
GameTheory
98.9
6
dosk17's picture
dosk17
98.9
7
DrApeman's picture
DrApeman
98.9
8
CompBanker's picture
CompBanker
98.9
9
kanon's picture
kanon
98.9
10
numi's picture
numi
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”