Lockstep Investing

JPMorgan: Counting Bailout Money as Profit

Apparently Congress has the same concerns that I have...

www.nytimes.com/2009/0...

"Tens of billions of those dollars have merely passed through A.I.G. to its derivatives trading partners, shielding them from losses. The Fed has refused to provide the names of those financial institutions, and senator after senator, Democrat and Republican, said that was an outrage."

I wonder what these congressmen would say if they found out it was the company they lauded so much as the "prudent navigator". Horsepucky to that!!!

Rating the Top 12 U.S. Banks - From Hidden Gems to Zombies

Martin, on Wells Fargo you miss the California exposure and the Wachovia (Golden West) exposure. That alone pushes that bank into walking wounded status.

On JPM you fail to mention that they are the biggest CDS broker in the market. Counterparty risk anyone? They are a zombie in their own right. They know if a crisis happens the only thing that can save them is government intervention. That is why the Fed gave them Bear Sterns to begin with, it is better to have all the counterparty risk in one spot so it is identifiable and manageable, rather than spread across market players.

Overall, good summary.

Citigroup's Derivatives Reduce Bailout to a Non-Event

Rakesh, to underscore your points, the OCC has polled the top ten CDS players and it is an accepted estimate amongst them that the net exposure is 15% of nominal exposure. It will vary for each firm, as you are aware is demonstrated by the heavily weighted underwriting exposure of AIG. So I think there is weight to your statements about credit derivatives and expect there will also be counterparty issues with other derivatives as you mention above.

www.occ.treas.gov/ftp/...

JP Morgan: Worth Banking On - Barron's

I agree with Sugar Daddy. JP Morgan has tremendous derivative exposure that the author glosses over. Also, Bear Sterns coveted hedge fund clients could easily become a burden in another panic selling. Also, WaMu was bought for 2B for a good reason.

Don't touch this stock.