• News

    The Tale Of A Whale Of A Fail

    Hi! Would you like to talk about the London Whale? Sure you would. The amount of misunderstanding of our poor beleaguered beluga is staggering, so I figured we could try to embark on a voyage of discovery together. Maybe we’ll figure it out. Along the way we’ll talk a tiny bit about the Volcker Rule. […]

    / May 11, 2012 at 2:36 PM
  • News

    Senator From Vermont Finally Weighs In On JPMorgan Situation

    BURLINGTON, Vt., May 11 – U.S. Sen. Bernie Sanders (I-Vt.) issued the following statement today after J.P. Morgan Chase revealed a $2 billion loss: “The debacle at J.P. Morgan Chase reaffirms my view that the largest six banks in this country, including J.P. Morgan Chase, which have assets equivalent to two-thirds of our GDP, must […]

    / May 11, 2012 at 12:45 PM
  • News

    Whale Sushi On The Menu At JPMorgan Executive Lunchroom For Next Few Months

    Jamie Dimon just did a conference call in which he mentioned something called the “Dimon Principle,” but he did not define it, so I will propose a definition, which is: If you are going to have a Slytherin alumnus running a $375bn book full of snakes and CDX and TIPS (??) and things, and someone […]

    / May 10, 2012 at 6:21 PM
  • News

    JPMorgan (Et Al) Sued By Occupy Wall Street

    Four New York City Council members sued the city today over the handling of Occupy Wall Street protestors, claiming the police used excessive force and should be subject to an outside monitor. The city and the Police Department made false arrests and violated the free-speech rights of protestors and journalists last year, 15 people including […]

    / Apr 30, 2012 at 1:27 PM
  • News

    JPMorgan’s Voldemort Probably Isn’t That Magical

    John Carney has hilariously convinced a bunch of people that JPMorgan whale-wizard Bruno Iksil could actually be running a synthetic bank on top of JPMorgan’s actual bank. The theory, propounded to him by a mysterious trader and sort of supported by an old PIMCO client note, is that Iksil was tasked with hedging JPMorgan’s inflation risk and did so by putting on a trade that was (1) long TIPS (for the inflation) + (2) long [write protection on] CDX (for the yield). Now I will tell you a thing, which is that I hedge my inflation risk by being (1) long TIPS (for the inflation) + (2) long MegaMillions tickets (for the yield),* but nobody calls me Voldemort.

    Here is Doug Braunstein’s theory about Iksil:

    On a conference call with analysts, Braunstein said the positions are meant to hedge investments the bank makes in “very high grade” securities with excess deposits. (J.P. Morgan has some $1.1 trillion in worldwide deposits.) Braunstein said the CIO positions are meant to offset the risk of a “stress-loss” in that credit portfolio. He added the CIO position is made in line with the bank’s overall risk strategy.

    What can that mean? Presumably the sensible view to take from this is that this is actually part of a “stress-loss” hedge; the CIO is short (bought protection on) a lot of shorter-dated corporate credit and funds it by being long (selling protection on) a lot of longer-dated (5-year) corporate credit, so as to be relatively DV01-neutral but long jump risk. This has the advantage of (1) actually hedging a stress loss in high-grade short-term corporate securities, (2) fitting in with the relative lack of noise in the CIO portfolio,** (3) being what people have told Bloomberg he was doing, and (4) being what JPMorgan has actually said it’s actually done in the CIO during the crisis. So it’s probably true no?

    But it’s fun to pretend! If you pretend Carney is right you can have one of two views.*** One is Izabella Kaminska’s, which is “sure, I guess this is a hedge, but boy is it a mysterious one.” You can buy this if you have – as she does – a pretty postmodernist view of what a hedge is. I do too, mostly.

    / Apr 17, 2012 at 5:32 PM
  • News

    JPMorgan Reports Voldemort’s Earnings, Some Other Stuff

    JPMorgan had a … quarter, whatever, go read about it. Top and bottom-line beats with revs up and net income down y/o/y. And JPMorgan’s investment bank had a … you’d have to say pretty good quarter, with fees still not where I’d like to see them as a former fee-getting banker but with FICC bouncing […]

    / Apr 13, 2012 at 10:48 AM
  • News

    His Trophy Case Full, Jamie Dimon Leaves Competitive Dancing To The Rest Of The Family

    [caption id="attachment_73269" align="alignright" width="260" caption="People who *can* dance"][/caption]

    There are a lot of things Jamie Dimon is very, very good at: building a fortress balance sheet, chatting up reporters in elevators, doing sake bombs, and being appreciably better looking than his peers, to name just a few. In other areas, the JPMorgan CEO has left room for improvement. For example, his dancing skills, about which Dimon’s own wife and mother are unsparing in their directness at this point.

    JPMorgan Chief Executive Officer Jamie Dimon “is a terrible dancer,” his wife, Judy Dimon, said last night at a gala for Ballet Hispanico, of which JPMorgan was the lead sponsor. She then moved her shoulders straight up and down to demonstrate what the 56 year-old leader of the biggest US bank, with $2.27 trillion of assets at year-end, does on the dance floor. Jame Dimon’s mom, Themis Dimon, was no more encouraging. Is he a good dancer? “No,” she said, shaking her head. Jamie Dimon wasn’t present to prove otherwise. “Unfortunately he couldn’t be here tonight because he had another commitment,” said his wife, a Ballet Hispanico board member and the event’s honorary chairman. Too bad. Jamie Dimon missed a good party. His wife, in a slim-fitting coral gown, danced a salsa with New York Giants wide receiver Victor Cruz, reminiscent of his moves in the end zone after scoring a touchdown.

    Speaking of people who can hold their own on the dance floor? “We like to dance,” Jamie Dimon’s father Theodore Dimon, there with his wife and Jamie’s twin brother, told Bloomberg. “We dance the fox trot — it’s nice and easy.”

    Scene Last Night: Victor Cruz, Dimon for Ballet Hispanico [Bloomberg]

    / Apr 10, 2012 at 10:46 AM
  • News

    You Say “Voldemort” Like That’s A Bad Thing

    Do you think that Bruno Iksil, when he woke up in Paris on Friday looking forward to trading from home in his black jeans, expected to become an international celebrity? The evidence suggests not. You may remember Iksil – possibly under other names like “Voldemort” or “the London Whale™” as the JPMorgan chief investment office trader who has sold protection on $100bn of notional of a CDX investment grade index to … hedge … JPMorgan’s massive short position in credit … or … something?* Anyway a lot of people are mad at him because that’s just too much protection to sell on that index and so they are complaining to Bloomberg and the Journal about how he is manipulating the market and also taking huge proprietary risks with JPMorgan capital that should obvs be regulated out of existence.

    This is weird in a lot of ways but one of them is that you can distill a lot of the Volcker-Rule complaints into “my God, you’re telling me that JPMorgan is exposed to $100bn of credit risk on investment-grade debt issued by a diverse mix of 121 U.S. companies!?” No! JPMorgan is exposed to something like $750bn of credit risk on debt issued by a diverse mix of companies. Some of it’s non-US. Some of it’s not even investment grade. And that’s just in its loan book.** Is writing $100bn of protection on the CDX.IG.NA.9 a terrible risk to take with investor and depositor and government-backstop money? Well, define “terrible risk.” It’s certainly less risky than operating the rest of JPMorgan.***

    / Apr 9, 2012 at 4:58 PM
  • News

    Whatever Doesn’t Kill JPMorgan Makes It Stronger

    “The frustration with — and hostility toward — our industry continues,” Dimon said today in a letter to shareholders of New York-based JPMorgan, the largest U.S. bank by assets. “We have not retrenched. Just the opposite — we have stepped up.” [Bloomberg, related]

    / Apr 4, 2012 at 7:28 PM
  • News

    Don’t Worry About How JPMorgan Maybe Helped Lehman Overlever Itself By Misusing Customer Money

    Is this JPMorgan Lehman thing a big deal? I mean the thing where JPMorgan used Lehman customer segregated securities as collateral for financing Lehman, allowing Lehman to overextend itself by a bit more than it otherwise would have, in pretty clear violation of the Commodities Exchange Act, although also maybe by accident? And where the […]

    / Apr 4, 2012 at 3:19 PM
  • Banks, News

    JPMorgan Banker Fined For Pitching A Client’s Stock To A Potential Investor

    What is your model of what the FSA is thinking in its insider-trading crackdown? Here is this Decision Notice against JPMorgan global ECM chairman and general mining-industry macher Ian Hannam, shown here being unspeakably awesome in Afghanistan*, and he got in quite a bit of trouble for some pretty minor badness. Basically he was advising […]

    / Apr 3, 2012 at 4:08 PM
  • News

    MF Global’s General Counsel Didn’t Sign JPMorgan’s “This Transfer Does Not Contain Customer Money” Assurance Letter On The Off-Chance It Did Even Though That Is Thing That Would NEVER HAPPEN

    MF Global General Counsel Laurie Ferber twice resisted providing assurances to JPMorgan Chase that the company was complying with rules to segregate customers’ collateral, saying language in a draft provided by the bank was too broad. JPMorgan was “specifically interested in two transfers” that occurred the morning of Oct. 28, Ferber said in testimony prepared […]

    / Mar 27, 2012 at 3:09 PM
  • Banks, News

    Why Can’t California Find Any Underwriters Who Haven’t Repeatedly Defrauded It?

    Matt Taibbi wrote today about this Bloomberg story describing how JPMorgan’s munis business is booming despite maybe screwing a few muni clients over the years here and there. You can read Taibbi for a rundown of the shenanigans but his basic question is why, after said shenanigans, does JPMorgan still dominate muni finance? His answer […]

    / Mar 22, 2012 at 5:24 PM
  • News

    Layoffs Watch ’12: JPMorgan

    The House o’ Dimon has said to be letting some people down gently today.

    “Big equities cuts today at JPM. 10% ish of floor? Gone. A good deal of senior people but a smattering of associates and analysts as well. Seems like a general restructuring, every group affected.”

    / Mar 20, 2012 at 2:00 PM
  • News

    The Art Of The Farewell

    Not everyone gets to write a New York Times Op-Ed when they quit their job, however disaffected. It’s also easier to quit a job after twelve years of cashing investment banking paychecks. No matter how “morally bankrupt” Goldman Sachs is, Greg Smith isn’t giving his bonuses back.

    Unlike Smith, who quit his job on his own terms and got to publish most of his resume in the Times, most of corporate America isn’t as lucky – and almost everyone in corporate America really wants to quit their job.

    So what are you supposed to do if you can’t get any above-the-fold space in a major newspaper?

    You have to burn bridges the old fashioned way – by writing a farewell email.

    / Mar 16, 2012 at 2:06 PM
  • 28feb12 JPM splt


    It’s Probably Best Not To Think Too Hard About JPMorgan’s Revenue-Per-Trade Breakdown

    Despite its overwhelming brown-ness I was kind of mesmerized by this slide from Jes Staley’s presentation for use later today at JPM’s investor day:

    The table shows the “number of trades” and revenue per trade for a bunch of JPMorgan’s investment bank trading products, which it’s disclosing now for reasons that are unclear but you can guess. Bloomberg does:

    / Feb 28, 2012 at 2:21 PM
  • News

    Layoffs Watch ’12: JPMorgan

    Cuts are said to be going down tomorrow.

    / Feb 15, 2012 at 4:28 PM
  • News

    Study Concludes Banking Brings Out Your Inner Fat Asshole

    John Chrin, a former managing director at J.P. Morgan Chase & Co. who left the firm in June 2009 to pursue an executive-in-residence position at Lehigh University, recalls seeing junior staff gain 30 or 40 pounds within a couple years on the job. When he worked at Merrill Lynch & Co., now a unit of […]

    / Feb 15, 2012 at 11:49 AM
  • News

    Jamie Dimon Will Not Have His Employees’ Balls Examined Every Time They Want To Make A Trade, No Matter How Bad Paul Volcker Wants It

    I understand the goal to make sure these companies don’t take huge bets with their balance sheets. But market making? Just like these stores down the street, when they buy a lot of polka dot dresses, they hope they’re going to sell, they’re making a judgement call. They may be wrong! So protecting the system […]

    / Feb 13, 2012 at 4:02 PM
  • News

    If The SEC Really Wanted To Get Tough On Securities Fraud It Would Have Added Some Minor Inconveniences To Its Multi-Hundred-Million-Dollar Fines

    It’s clear that I am a terrible person because I continue to be unable to get all that excited about banks that commit fraud. And the big thing today is that the SEC doesn’t put banks out of business just for committing fraud, which I think is rather sporting of them but lots of people […]

    / Feb 3, 2012 at 6:44 PM
  • News

    JPMorgan VP Plays (Corporate Basketball) To Win, Starting By Building A Fortress-Like Defense

    Those of you who’ve been in the working world for a while have probably experienced the IM softball/soccer/basketball thing. What you probably haven’t experienced is being on a team that actually puts in the work to go all the way, rather than simply showing up to dick around for a free tee-shirt and to maybe […]

    / Jan 26, 2012 at 11:47 AM
  • Banks

    Layoffs Watch ’12: JPMorgan

    Cuts are said to be going down at the House o’ Dimon.

    / Jan 25, 2012 at 12:40 PM
  • News

    How Is The Whole “Don’t Risk All Your Money Trading For Your Own Account” Thing Working Out For US Investment Banks?

    All the big banks have reported earnings so let’s take a little stock of things, shall we? A thing I did midyear was look at the ratio of trading net revenues to VaR for GS and MS, to prove that MS was winning the trading or something. Let’s expand that a bit. The result is, […]

    / Jan 19, 2012 at 12:50 PM
  • News

    Bonus Watch ’12: JPMorgan

    The take-away here is put in for that transfer to Brazil? From the front lines:

    / Jan 18, 2012 at 11:13 AM
  • Banks

    Not That He’s Volunteering

    JPMorgan earnings this morning were a bit disappointing, with investment banking revenue down 30% y/o/y in what may be a bad sign for the rest of the industry, but the Jamie & Doug In The Morning Show remains finance’s top-rated program in its time slot and it did not disappoint today. This is in part […]

    / Jan 13, 2012 at 12:43 PM

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