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Thread: Round II?

  1. #1

    Default Round II?

    I remember this sentence from the film, "Inside Job:" "each financial crisis has brought larger and larger shocks to the system..."

    Well, is this round II of the (near) meltdown in 2008? This is sort of how it all began.

    J.P. Morgan’s losses reveal market chaos - David Weidner's Writing on the Wall - MarketWatch
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  2. #2
    Olympic Champ r.payton@att.net's Avatar
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    Default Re: Round II?

    Ban,
    Everyone on this forum should realize i am far from a financial genius yet my sister ( a bonds Trader) was forced into early retirement (after 35 years ) as was her entire department (others to forced layoffs ). This should send out a signal that CHASE is battening down the hatches for a humongous shxt storm ahead..
    You know, I think I would rather be a man than a god . We don't need anyone to believe in us. We just keep going anyhow. It's what we do.

  3. #3

    Default Re: Round II?

    Funny how when volatility results in huge gains it isn't such a big deal.

    Morgan makes $4 billion to $5 billion per quarter, unless this is truly the tip of the iceberg then it's just a blip on the screen.

  4. #4

    Default Re: Round II?

    Quote Originally Posted by Flop The Nuts View Post
    Morgan makes $4 billion to $5 billion per quarter, unless this is truly the tip of the iceberg then it's just a blip on the screen.
    I know nothing about this stuff and still can't find that damn movie anywhere. But, I ask, if they make 4-5 billion per quarter and just lost 2 billion, isn't that a 6-7 billion dollar difference from the norm? Isn't 6-7 billion dollars in one quarter a big deal? I ask because I honestly don't know. I also ask because what if this was a major investment of your 401k and you just celebrated your retirement. Wouldn't that be a big hit since you no longer have the time to wait this one out?

  5. #5

    Default Re: Round II?

    This wasn't a loss to anything like a 401, this was Morgan hedging one of their own positions. It was a synthetic hedge, and when those start going sideways then it's difficult to get out. It's kind of similar to shorting a stock and getting caught in a squeeze.

  6. #6

    Default Re: Round II?

    Quote Originally Posted by Flop The Nuts View Post
    This wasn't a loss to anything like a 401, this was Morgan hedging one of their own positions. It was a synthetic hedge, and when those start going sideways then it's difficult to get out. It's kind of similar to shorting a stock and getting caught in a squeeze.
    Ha ha!! You could've written that in Mandarin and I would've understood just as much. I'm not going to ask for a better description because I'm probably so far away from understanding that it would take too long. Sythetic hedge, going sideways, shorting a stock and getting caught in a squeeze all sounds like Charlie Brown's teacher to me. I'm just glad to read that no one lost their retirement.

  7. #7

    Default Re: Round II?

    I would have started this thread, if this wasn't already here.

    Best I can ascertain, this result wasn't from trying to manage risk, but was, instead, a pure profit grab.

    Thus, this, if properly categorized, runs counter to the Voelker rule.

    Wall Street, the mind of the financial industry, continues to misfire amock.

    Who, oh who, can rein this in?

    If my man Ralph Nader had been elected, would he have been assassinated?
    DSCH: a Soviet artist's reply to unjust criticism.

  8. #8

    Default Re: Round II?

    Everything I've read so far (primarily the WSJ) points toward these positions being hedges, but I guess it remains to be seen.

    If Morgan's losses don't emperil the ongoing viability of the corporation then why do I care again? If the government doesn't need to step in, and the losses are borne by the shareholders, then why do I care? Wall Street companies make and lose big money on trades. In order to survive they make more money than they lose, otherwise they get a haircut.

  9. #9

    Default Re: Round II?

    "Everything I've read so far (primarily the WSJ) points toward these positions being hedges, but I guess it remains to be seen."

    What a shock to see that spin put on it. And everything I've heard, on NPR, points to this being a profit grab in the guise of a pseudo-hedge. Do any of the shareholders happen to be, perchance, "funds" that have their own investors who really have no idea that their life savings are being put at risk in exotic instruments?

    "In order to survive they make more money than they lose, otherwise they get a haircut."

    So the huge taxpayer bail out was actually Wall Street getting a haircut???

    I guess it's true since there were no legal consequences, and even taxpayer-financed bonuses were paid out.

    Some got a haircut; some got fleeced.
    DSCH: a Soviet artist's reply to unjust criticism.

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