These graphics dramatically overstate the decline. The ratio of current market cap over '07 market cap is the same as the ratio of the radius of the smaller circle to the radius of the larger circle. Problem is, since the area of the circles is a function of the *square* of the radius, the ratio of the areas is far lower. E.g., JPM's green circle is about 1/4 the size of its blue circle, even though the market cap declined by (only) 50%
sadly, the pic exaggerates the implosion by implying the relative change in area where the numbers indicate the change in mkt cap is proportional to the change in heights of the circles.
wait, I thought this was bofa day, where is bofa? what, those guys at FT Alphaville couldn't do the math because of the all the mergers to which kenny has come so accustomed?
Pretty embarrassing that JP didn't bother checking the sizes of the circles. Notice how Citi's 2009 circle is 99.5% small than its 2008 circle, even though the decline in market value is "only" 92.5%. Someone should learn how to use these mysterious "square roots".
It's probably pointless to comment, but whatever analyst made this is a total waste. Don't you have excel backup that equates the market cap ratio to the circle area ratio, then back into the implied diameter, then use the implied diameter to right-click / format object / size / height and width? I weep for the future.
@3 - Thanks Professor! Seems, though, like a pretty accurate graphic explanation of the fact that Citi shares are worth $3.50 down from $55. Btw, Ginger wants to know, when will you return her batteries; your "radio" will obviously never work and Gilligan left to start his own fund...
Posted by Anal_yst , Jan 22, 2009 2:47PM
This was on FT Alphaville yesterday...
Posted by Equity Private , Jan 22, 2009 2:49PM
Luckily, we also found it, so our readers can enjoy it too!
Posted by guest , Jan 22, 2009 2:50PM
These graphics dramatically overstate the decline. The ratio of current market cap over '07 market cap is the same as the ratio of the radius of the smaller circle to the radius of the larger circle. Problem is, since the area of the circles is a function of the *square* of the radius, the ratio of the areas is far lower. E.g., JPM's green circle is about 1/4 the size of its blue circle, even though the market cap declined by (only) 50%
Posted by guest , Jan 22, 2009 2:50PM
no BAC, WFC? also...JPM, among others, is probably distorted by stock issued to aquire BSC, etc.
Posted by Equity Private , Jan 22, 2009 2:51PM
Mr. Thain, I know you have a lot of time on your hands now... but seriously....
Posted by guest , Jan 22, 2009 2:51PM
sadly, the pic exaggerates the implosion by implying the relative change in area where the numbers indicate the change in mkt cap is proportional to the change in heights of the circles.
Still funny as $hit!
Posted by guest , Jan 22, 2009 2:53PM
That scale looks odd. Therein lies the rub w/ all-so-fun bubble graphs.
Posted by Investorcluzo , Jan 22, 2009 2:53PM
wait, I thought this was bofa day, where is bofa? what, those guys at FT Alphaville couldn't do the math because of the all the mergers to which kenny has come so accustomed?
Posted by guest , Jan 22, 2009 2:54PM
Does this include all the new capital poured into banks?
Posted by miami , Jan 22, 2009 2:54PM
Frankly, I'd prefer less infoporn at DB, especially when it clearly misrepresents reality. jmho.
Posted by guest , Jan 22, 2009 2:57PM
Pretty embarrassing that JP didn't bother checking the sizes of the circles. Notice how Citi's 2009 circle is 99.5% small than its 2008 circle, even though the decline in market value is "only" 92.5%. Someone should learn how to use these mysterious "square roots".
Posted by guest , Jan 22, 2009 2:59PM
Citi = Liz Claman?
Posted by hedgehog , Jan 22, 2009 3:01PM
They must have outsourced this work to Mercer...
Posted by guest , Jan 22, 2009 3:06PM
@11 i'm a hedgefund manager, what is a square root?
Posted by guest , Jan 22, 2009 3:08PM
What is a HEDGE HOG?
Posted by guest , Jan 22, 2009 3:09PM
@13
Brilliant
Posted by guest , Jan 22, 2009 3:09PM
Blowing bubbles?
Posted by StillNoCouch , Jan 22, 2009 3:09PM
Concur with several of the above ...
This graphic is:
1. The result of the misapplication of 5th grade geometry
2. Woefully misleading (even if the math were correct)
"... we cannot guarantee it's accuracy ... "
No Shit !
Posted by guest , Jan 22, 2009 3:12PM
Should show same silly graphic with size of fed balance sheet on those same dates....
Posted by guest , Jan 22, 2009 3:20PM
Comment removed by moderator.
Posted by guest , Jan 22, 2009 3:25PM
It's probably pointless to comment, but whatever analyst made this is a total waste. Don't you have excel backup that equates the market cap ratio to the circle area ratio, then back into the implied diameter, then use the implied diameter to right-click / format object / size / height and width? I weep for the future.
Posted by guest , Jan 22, 2009 3:36PM
I love olives
Posted by guest , Jan 22, 2009 3:45PM
I'm surrounded by assholes.
Posted by StillNoCouch , Jan 22, 2009 3:45PM
Check this out:
http://ftalphaville.ft.com/blog/2009/01/22/51558/that-jp-morgan-picture-official-redux/
FT Says the one they got was a draft ... "now stop emailing us!"
ROFLMAO !!!
Posted by guest , Jan 22, 2009 3:57PM
Back door porn?
Posted by guest , Jan 22, 2009 4:00PM
Circular argument, didn't read.
Posted by guest , Jan 22, 2009 4:01PM
The pic is funny. Stop mind-fucking it.
Posted by guest , Jan 22, 2009 4:07PM
The RBS graph is exactly what my boss would see if our urinals had mirrors.
Posted by guest , Jan 22, 2009 4:27PM
Hi
Posted by guest , Jan 22, 2009 4:32PM
@28 I guess that explains your sore throat?
Posted by guest , Jan 22, 2009 6:00PM
@27 agree. Look at the numbers and do simple math...you quants out there
Posted by Conflict of disinterest , Jan 23, 2009 9:10PM
@3 - Thanks Professor! Seems, though, like a pretty accurate graphic explanation of the fact that Citi shares are worth $3.50 down from $55. Btw, Ginger wants to know, when will you return her batteries; your "radio" will obviously never work and Gilligan left to start his own fund...