Thursday, May 10, 2012

Could This Be The Start Of "The Big One?"


I wondered why the SPX futures crapped out right after the market closed.   JP Morgan disclosed that it has lost $2 billion on synthetic credit derivative bets in its Chief Investment Office division.  Not sure why JPM had to wait until the market closed. Surely they knew about this before the market closed.  LINK

Rest assured that the true magnitude of losses is several multiples of this "mark to fantasy" disclosure.  Also note that the Chief Investment Office is the division in which JPM conducts its precious metals trading/manipulation activities.

I have to believe, given that Wall Street is monkey see, monkey do, that several other Too Big To Fails have similar problems with their credit derivative portfolios.  But don't lose sleep over this because the SEC, CFTC, FINRA, FASB and the Justice Department will see to it that Wall Street will never have to honestly disclose its true financial condition.  The big collapse that eventually ensues will be used to cover the mess and they'll blame everything on Europe or Iran. 

This is what I envision:  Jamie Dimon gets on tv and says "we didn't see this coming, but some rogue dressed in white Islamic rags wearing a Star of David around his neck, gold coins falling out of his pockets and speaking Italian came rushing onto our trading floor and detonated a bomb stuffed in his underwear.   Our systems blew up and Wall Street collapsed - sorry dudes."


  1. Can't be--JPM passed the stress tests recently and Bennie Bernanke said things are improving in the financial community, right?

    Define improving and define the criteria of a stress test. That test could have been similar to the draft board physical I took in 1970. Breathe--you pass.

    $3 billion huh? I go nuts if I cannot account for a $10 bill.

  2. Things are getting worse over here in Canada:

    Mask ban bill penalty doubled to 10 years

    "MPs studying a bill that would make it illegal for rioters to cover their faces have doubled the proposed penalty to 10 years."

    @Dave in Denver: If you and I are ever in the same "re-education" camp....I call top bunk!!!

    -Sicilian Gold

  3. A Jewish patsy pretending to be a Muslim? That's a good one that happens over in the Israeli areas (in the Palestinian areas, Jewish ops dress up as religious Jews and shoot blanks at defenseless palestinian villages to vilify the religious settlers). Anyway...that's a good scenario there, though :-)

  4. But but but Blythe said that no one at JPM makes or manipulates markets!

  5. ...
    Bloomberg News reported in April that a single JPMorgan trader in London, known in the bond market as "the London whale," was making such large trades that he was moving prices in the $10 trillion market.

    Yeah, JPM never manipulates markets. Suckers.