I just watched Carl Levin discuss what is, or is not a "hedge" on national TV over this JPMorgan non-story. The end clearly must be upon us.
The JPMorgan loss was 2 billion dollars on a 100 billion dollar book. Do you know what we call a loss like that in the hedge fund world? In about 1 in 5 cases we call it a normal Tuesday. It may be a big deal for JPMorgan's shareholders, and for the risk manager who obviously had (or didn't have) some correlation that he thought he did (or didn't) actually have. But to the broader market and all those megalomaniac bureaucrats who dream of ruling a huge bank through micromanaging regulation one day, this should be a total Non-story.
In the hedge fund world a 2% loss is 1/10 of your maximum draw down - not a big deal at all. For someone like me it isn't even something to lose sleep over. Even the fact that this has given Carl Levin a chance to pontificate on TV for half an hour (eliminating any remaining doubt that he might actually understand the financial markets after all) is taking the issue FAR too seriously.
America's biggest mistake after 2008 was allowing the government to interfere in the free market. This will all but guarantee another collapse eventually, even if we can't see where yet. Let's not make that same stupid mistake over a piddling little thing like this.
I know 2 Billion sounds like a lot of money, but it's really no big deal. It's about equivalent to what the Federal government borrows every single day... before they break for lunch.
%%%%%%%%%%UPDATE%%%%%%%%%%
Oh jeez... they also got an opinion from that paragon of the financial services regulatory industry, Eliot Spitzer. Who as you may recall originally made his name by filing pointless and unjustified lawsuits against any investment bank who had the temerity to turn a profit. By all means lets get someone over to the Federal Prison and ask Bernie Madoff his view. How about getting some input on global risk practices from Jon Corzine?!
Oh how horribly shamefully useless CNBC has become.
9 comments:
spot on Tom. I had to explain to someone prone to knee-jerking that JP has $1 Trillion (that's a "T") under management.
"b-b-b-but $2 billion is unheard of?!?!"
no it's not and reporters on CNBC are just as guilty for pouring too much lighter fluid on the weenie roast and call it an inferno.
I don't know who said it this morning, but a media dope equated it this way:
"If you told your wife you bought insurance on your home and then months later you told her you lost $100k because of the insurance, she'd be upset..."
HUH?
I believe Wall St and Business reporters should be required to take the Series 7 and submit to urine tests after today's laughable analysis.
And naturally - there are a bunch of folks that never saw a trading desk in their lives (they think Scottrade or Etrade accounts are the same thing as managing a hedge fund....) They eat this stuff up.
It is people like these that elect shrews like Levin to attempt to manage capitalism...
I wish just once Levin would take off the reading glasses.
What a tool!
is the head dead yet? get the widow on the set we need dirty laundry............
both of you are correct... this is a drop in the bucket, i had a friend text saying bloomberg panel was telling ppl to go to cash.???wtf???i told him this was zip except for politics and ego.he laffs when i tell him ive seen so many black swans in past decade that they all just look like blackbirds.. "nothin here folks jus keep on moving"....this will be fragmented cause when i think of levine and those freakin glasses and grilling lloyd for days and not realizing he didnt understand derivatives 101 my head wants to explode... he wont hold hearings yet... lets wait till october so odummass can make it a great political football. this shouldnt but will hurt mitt..alot....i had some jpm and added this am.ill take a 3% divi and a 13 bil buyback.. i tell ppl that that were scared to fly after 9/11 that they were safer then than on 9/10.. today minus carl levine it is safer to buy jpm than last week.tool is exactly right ikaika.and u should apologize to the "tool" for comparing to carl
and im not a big fan of cramer ---but of all people who should understand 2% drawdowns he should. and he should have in a calm voice related how this can happen routinely...if these boys cant hedge a portfolio then credit is goin to dry up alot worse than it is now,,,, shame on you cramer.
tom..... just saw your update... cnbc has become ikaikas"tool"''' .the whole network.im watching austrailian rugby as i type. they report zip that i need..... i saw spitz was coming up and heard him uttter crony capitalism and flipped... morals of an ally cat ..this is their informed opinions.???? . country is beyond repair. i know most ppl with kids have hope. .i dont.zero. nadda zip zilch kapoot
so today show brings the little whore on andrew sorkin to beat up jpm...jesus..tomoro will be meet the press and so and so ... this is a huge nail in mitt's coffin.. bad timing and easy prey.. sorry guys but this was exactly what odumass needed against a former pe guy...there really is no way mitt can combat this because >90 % of america hasnt got a clue what all this was about....hell the senate doesnt.. so turn off the tv. mitt is done toast.he needed a perfect storm. and thats over
Tempest in a Teapot...
good news never sells as good as bad news. It was a noble attempt by the CNBC hacks today, but I'm almost embarrassed for them.
is Steve Liesman really that dumb?
I think he is yeah. A friend of mine is one of his goto Fed guys and has lots of experience with him. He has that neo-keynesian view... that no one is better at allocating resources than an all knowing and all powerful benevolent bureaucrat (with academic and journalist advisers).
How about Cramer with the 'clawback' discussion. these are open positions for god's sake and he wants clawbacks against them.
I'm so glad I'm on the buy side and don't have to appease those A-holes.
yea...saw that. jaime said last weeek he wasnt goin to do a firesale on these assets. jpm has deep enough pockets to ride alot of these out. the thing thats got me pissed right now is the impending moodys review debacle.. first they shouldnt be in business anymore. second some should be in prison.( dennis koz has to jus be shaking his head)...so moodys will wak jpm and maybe morgan the worst.im waitin for them to start a mini run on these boys and then sparks will fly..im thinkin morgan is getn into a buy zone and then another blackbird pops up.....jesus.odumass would love a good "run" so he could be presidential.
Post a Comment