FARK.com: (7100018) 10 questions for JP Morgan, not including "just who the FARK do you think you are?"

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		10 questions for JP Morgan, not including "just who the FARK do you think you are?" (cnbc.com)		14
		More: Followup, JPMorgan Chase & Co., trading loss, internal controls, Big Questions, U.S. Bancorp

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7129 clicks; posted to Main » on 11 May 2012 at 8:19 AM | Favorite | share:

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bunner		2012-05-11 09:13:16 AM

3 votes:

God Is My Co-Pirate: To me, it sounds like my neighbour borrowing money from Big Vinny, and using it to take out a 2 billion dollar life insurance policy on her husband. She may, or may not, be able to pay Vinny back, but either way, it's going to end badly for the husband.

Congratulations. You now have an economics degree.

rebelyell2006		2012-05-11 08:30:36 AM

3 votes:

Question 11: Why haven't you jumped yet?

AthensBoy		2012-05-11 08:55:09 AM

2 votes:

Fissile: Just goes to prove that the people running these banks are sociopaths, if not outright psychopaths. Despite the melt down of 2008, nothing has changed, if anything, they are now doubling down.

The solution: Thousands of these bankers and Wall St. criminals need to be hauled off to jail and every dime taken from them. The entire financial system needs to be placed under strict regulation, like it was during Depression 1.0. Anyone who utters the words, "Austrian School" or "Any Rand", will be immediately placed up against a wall and shot.

Any Rand or ein Rand in particular?

SilentStrider		2012-05-11 08:53:22 AM

2 votes:

Hows thatnnot having Glass Steagall thing working out for you?

SharkTrager		2012-05-11 08:38:42 AM

2 votes:

TruBluTroll: For example, what is a "position"?

Well, sometimes when a mommy and daddy still love each other, but they feel they need to try something different...

historycat		2012-05-11 12:48:46 PM

1 votes:

Dear Mr. Dimon,

Please hire me. I have no experience, but I promise I will only lose your company $500,000 dollars.
That's a savings of 99.99995%

My salary can be open to negotiation, please start the bidding at $1,000,000,000.

(you'll still come out ahead.)

Sincerely,
historycat

p.s. Jump you farkers.

God Is My Co-Pirate		2012-05-11 09:09:51 AM

1 votes:

skinnycatullus: Ficoce: Synthetic Credit. Can someone explain that in layman's terms?

Synthetic credit is nothing more than a bet. It is synthetic because neither the bank nor the client directly owns the product they are betting on.

I don't know enough to offer a simple example, though... maybe it is like you and I betting on what the price of Ford shares will be. Neither of us owns shares in Ford, but it is beneficial to both of us to make this bet, because it allows us to hide some of our risk from our balance sheets.

Hopefully someone can help with a better example.

To me, it sounds like my neighbour borrowing money from Big Vinny, and using it to take out a 2 billion dollar life insurance policy on her husband. She may, or may not, be able to pay Vinny back, but either way, it's going to end badly for the husband.

God Is My Co-Pirate		2012-05-11 09:04:42 AM

1 votes:

The Globe & Mail calls them the venerable U.S. bank that was, until Thursday, widely respected for sound risk management.

I think what they meant to say was "the venerable U.S. bank that was, until Thursday, widely respected for not getting caught."

Fissile		2012-05-11 08:44:57 AM

1 votes:

Just goes to prove that the people running these banks are sociopaths, if not outright psychopaths. Despite the melt down of 2008, nothing has changed, if anything, they are now doubling down.

The solution: Thousands of these bankers and Wall St. criminals need to be hauled off to jail and every dime taken from them. The entire financial system needs to be placed under strict regulation, like it was during Depression 1.0. Anyone who utters the words, "Austrian School" or "Any Rand", will be immediately placed up against a wall and shot.

SurfaceTension		2012-05-11 08:41:55 AM

1 votes:

EatHam: TruBluTroll: what is a "position"

If you own 100 shares of Microsoft, you have a 100 share long position in Microsoft. If you are short 100 shares of Microsoft, you have a 100 shares short position in Microsoft.

It is basically an open trade.

To expand a bit on "short position", it's similar to borrowing $100 watch from your friend Joe, and then turning around and selling it to Anne for $100, because you think you'll be able to buy the watch (or an exact replica) for $60 at some future date before you have to give it back to Joe. In the transaction, you'd make $40 ($100-$60), less the fees you pay Joe to borrow his watch in the first place.

Confused yet?

SharkTrager		2012-05-11 08:39:17 AM

1 votes:

wrenchboy: Finance experts of Fark, please explain where the "lost" money goes. I am dying to get my hands on some of it.

Goldman Sachs.

They also have your missing socks.

Gonz		2012-05-11 08:28:17 AM

1 votes:

Jump, you f*ckers.

TruBluTroll		2012-05-11 08:26:32 AM

1 votes:

1. Is the loss-making position still open?
2. Have any of the losses been crystallized yet? If not, how big is the open position?
3. When did it become apparent to the risk department at JPMorgan that the "hedge" wasn't working?
4. When were senior management and JPMorgan CEO Jamie Dimon informed about the magnitude of the potential losses?
5. What is the client position being "hedged"?
6. By how much did the original JPMorgan positional hedge offset the client portfolio position?
7. JPMorgan reported first-quarter numbers in mid-April. Should the bank have informed investors of a material risk to future profits if this position had already started to become a problem for the bank?
8. When was the "mark to market" calculation that revealed the loss made?
Don't investment banks make such calculations on a daily basis in order to ensure the position doesn't become too prominent?
9. Was this a single trader acting alone? Or was it a desk trading a position that was made with full knowledge of senior JPMorgan and risk management?
10. What is JPMorgan's interpretation of "proprietary trading" as opposed to "client position hedging"?

Article doesn't mention for us non-business elite folks what half of that means. For example, what is a "position"?