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Thread: JPMorgan Loses $2 Billion in Chief Investment Office

  1. #21
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    Re: JPMorgan Loses $2 Billion in Chief Investment Office

    I am studying for the FAR ...

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    Re: JPMorgan Loses $2 Billion in Chief Investment Office

    Quote Originally Posted by SheWolf View Post
    I have worked with JP in the past, and it doesn't surprise... The firm is so big, it doesn't seem management isn't very effective or knows the ropes of the company. A lot of dumb people can do a lot of dumb **** at a place like that, and 10 to 1, they won't get caught... there are just way too many people to effectively manage. It could be different at other locations than I was at, but the managers where I was, they didn't know anything about anything going on

    While anything is possible, it is hard to believe that JP Morgan is largely populated by dummies. My sense is that the people they hire come from the very best schools, and then only students with great grades need apply.

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    Re: JPMorgan Loses $2 Billion in Chief Investment Office

    Quote Originally Posted by washunut View Post
    I would hope that whomever put of this hedge and his/her get fired and get to learn whatever lessons elsewhere. We should also remember that JP Morgan actually did relatively well in 2008 and was even able to pick up Bean Sterns on the cheap.
    Everyone in that particular team should be fired. From the trader to the partner. If your risk hedging department cannot even do its own hedging properly that's a bad, bad sign.

    We know it is a hedge gone wrong, but usually when one side of a hedge does poorly the other side does well.
    Someone's having a lobster buffet with Cristal right now.

    It would be nice to have Dimon walk the shareholders through what he had hoped to achieve, why it failed and ig they know enough wither to say, this makes no sense or have they found the right way to do it.
    Would be. Seems right now that the managers were either complacent, or asleep at the wheel.
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    Re: JPMorgan Loses $2 Billion in Chief Investment Office

    Quote Originally Posted by obvious Child View Post
    Everyone in that particular team should be fired. From the trader to the partner. If your risk hedging department cannot even do its own hedging properly that's a bad, bad sign.



    Someone's having a lobster buffet with Cristal right now.



    Would be. Seems right now that the managers were either complacent, or asleep at the wheel.
    Granted they look like horses as*** right now. Jamie has been embarrased which can't be good news for the team responsible. I would also expect that when we learn of Jamie's 2012 compensation, he is going to eat some of this loss along with other senior managers.

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    Re: JPMorgan Loses $2 Billion in Chief Investment Office

    Quote Originally Posted by washunut View Post
    While anything is possible, it is hard to believe that JP Morgan is largely populated by dummies. My sense is that the people they hire come from the very best schools, and then only students with great grades need apply.
    I know some really professional people working for JP, so I am not judging the workers... just the company as a whole, or at least my impression of the company.

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    Re: JPMorgan Loses $2 Billion in Chief Investment Office

    Quote Originally Posted by AdamT View Post
    Sadly, I agree, though there's a chance it will be corrected if Obama is reelected. If Romney wins -- no chance at all.
    I seriously doubt it as Obama is being funded by corporate interests just as Romney is.
    "And in the end, we were all just humans, drunk on the idea that love, only love, could heal our brokenness."

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    Re: JPMorgan Loses $2 Billion in Chief Investment Office

    JP Morgan "loses" two billion dollars of investor money, yet Republicans think Morgan is over-regulated.

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    Re: JPMorgan Loses $2 Billion in Chief Investment Office

    Quote Originally Posted by washunut View Post
    Can you or any other chicken little in this thread point to anything that remotely put JP Morgan or the financial system at risk?
    Neither JPMorgan nor the U.S. financial system are at risk. If anything, this relatively modest problem highlights anew the limitations of current risk management approaches. Details on what happened are not yet available to really understand the nature of the problem.

    Having said that, what has been reported is that there was a synthetic credit position. Such positions can entail enormous complexity making them difficult to manage. Despite the relatively easy calibration of such portfolios in textbook cases, actual continual recalibration is much more demanding in the real world. For starters, there are many more uncertainties than is the case in simplified textbook cases and assumptions of rational behavior, efficient markets do not entirely prevail. In short, even as there is always an element of risk in hedging, when it comes to synthetic portfolios, the risk is higher than with more straight-forward hedges such as interest rate swaps. There are many more unknowns and opportunities for failure.

    That Jamie Dimon appeared surprised by what happened suggests that the recent event was not within the realm of JPMorgan's expectations. My guess is that Dimon will work hard to address what happened, even as the event imposed more of a reputational hit than actual financial hardship on the company.

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    Re: JPMorgan Loses $2 Billion in Chief Investment Office

    Quote Originally Posted by donsutherland1 View Post
    Neither JPMorgan nor the U.S. financial system are at risk. If anything, this relatively modest problem highlights anew the limitations of current risk management approaches. Details on what happened are not yet available to really understand the nature of the problem.

    Having said that, what has been reported is that there was a synthetic credit position. Such positions can entail enormous complexity making them difficult to manage. Despite the relatively easy calibration of such portfolios in textbook cases, actual continual recalibration is much more demanding in the real world. For starters, there are many more uncertainties than is the case in simplified textbook cases and assumptions of rational behavior, efficient markets do not entirely prevail. In short, even as there is always an element of risk in hedging, when it comes to synthetic portfolios, the risk is higher than with more straight-forward hedges such as interest rate swaps. There are many more unknowns and opportunities for failure.

    That Jamie Dimon appeared surprised by what happened suggests that the recent event was not within the realm of JPMorgan's expectations. My guess is that Dimon will work hard to address what happened, even as the event imposed more of a reputational hit than actual financial hardship on the company.


    Wonderful satirical response. "Dimon will work hard". ROFLMAO. After Dimon personally lobbied to kill the kind of regulations that would have prevented two billion dollars from being "lost" to American investors (think pension funds), the idea that it surprised him is satire at it's finest. Great job.

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    Re: JPMorgan Loses $2 Billion in Chief Investment Office

    Quote Originally Posted by leftofabbie View Post
    Wonderful satirical response. "Dimon will work hard". ROFLMAO. After Dimon personally lobbied to kill the kind of regulations that would have prevented two billion dollars from being "lost" to American investors (think pension funds), the idea that it surprised him is satire at it's finest. Great job.
    He'll work hard within the firm. The reality is that there are limitations to risk management. I favor the regulations on account of those limitations given the vital nature of the nation's financial system and its financial institutions. However, that does not preclude his working to improve his own firm's risk management capabilities.

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