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Other banks AH on the JPMorgan news: BAC -3.2%, C -3.2%, GS -2.4%, MS -3.1%. Banking ETF: XLF -2%.

Other banks AH on the JPMorgan news: BAC -3.2%, C -3.2%, GS -2.4%, MS -3.1%. Banking ETF: XLF -2%.
Comments (22)
  • Mike Maher
    , contributor
    Comments (2481) | Send Message
     
    Its company specific, no reason for any other bank to be down.
    10 May 2012, 05:24 PM Reply Like
  • Tack
    , contributor
    Comments (12721) | Send Message
     
    Usual hysteria. Bank shopping day tomorrow.
    10 May 2012, 05:27 PM Reply Like
  • Worldofblue
    , contributor
    Comments (25) | Send Message
     
    agreed 2B derivative loss equates to 12B loss in market value could present a great buying opportunity. Although what concerns me is the fact this oversight happened and what is being to done to prevent similar mistakes. I do give the company credit for coming clean and not trying to sweep it under the rug.
    10 May 2012, 05:45 PM Reply Like
  • peter9810
    , contributor
    Comments (40) | Send Message
     
    No one is the only one to do anything.
    10 May 2012, 07:05 PM Reply Like
  • wil3714
    , contributor
    Comments (1593) | Send Message
     
    who says?
    11 May 2012, 07:57 PM Reply Like
  • untrusting investor
    , contributor
    Comments (9923) | Send Message
     
    So JPM announces significant mark-to-market losses in after hours. Slowly but surely the few remaining market leaders begin to crumble. CSCO & JPM being the latest. Very very little left to hold markets up anymore.
    10 May 2012, 05:27 PM Reply Like
  • Techmonkey
    , contributor
    Comments (23) | Send Message
     
    Did you notice the part where JPM is still expected to make $4billion in Q2? And CSCO just made $2billion in the quarter, 33% up from the year prior. These aren't exactly "the world is ending" numbers. Some may miss expectations, but these are pretty darned good numbers....
    10 May 2012, 05:37 PM Reply Like
  • Tack
    , contributor
    Comments (12721) | Send Message
     
    As the weeks and weeks pass, and the markets engage in a broad horizontal consolidation, your search for the big drop will again prove elusive.
    10 May 2012, 05:38 PM Reply Like
  • wil3714
    , contributor
    Comments (1593) | Send Message
     
    then why was the market only down 4.5points on the S&P?
    11 May 2012, 07:58 PM Reply Like
  • wil3714
    , contributor
    Comments (1593) | Send Message
     
    yes some other banks like $WFC didnt even go down it was up on the day
    11 May 2012, 07:59 PM Reply Like
  • Ted Bear
    , contributor
    Comments (573) | Send Message
     
    It's not the amount...it is the area where they lost it....IF JPM got whacked in the CS area, then others with weaker management...like MS, for instance....have a bigger...much bigger problem.
    10 May 2012, 05:30 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2481) | Send Message
     
    Since one trader managed to lose this money, I don't see how you can say a poor trade by JPM means MS must have problems.
    10 May 2012, 06:06 PM Reply Like
  • Techmonkey
    , contributor
    Comments (23) | Send Message
     
    I agree, this has nothing to do with BAC or the other large banks.

     

    BAC released its 10Q yesterday. No issue with theirs, no special call...they've been de-risking more than the other large banks (through necessity). As a part of the XLF, it'll take a little hit when JPM takes such a huge one--but JPM is just 8.8% of the XLF.
    10 May 2012, 05:31 PM Reply Like
  • Storm Warning
    , contributor
    Comments (155) | Send Message
     
    And the slow-motion train wreck just hurled one mile closer to the end of the tracks...
    10 May 2012, 06:14 PM Reply Like
  • nontrader
    , contributor
    Comments (9) | Send Message
     
    Is this a surprise to anyone? Chase like Citi which are New York banks, lack management controls and because of their position in the financial arena take unnecessary risks at the expense of the shareholders and employees. Let's not forget that Dimon is a former Sandy Weill protege.

     

    I am sure that there will be other surprise financial surprises down the line from Chase. This will be continuous for these two banks.
    Lesson is not to invest in these New York banks and analyst stop trying to justify the value of these stocks
    10 May 2012, 06:16 PM Reply Like
  • geodan85
    , contributor
    Comments (161) | Send Message
     
    JPM Chase is largest derivatives bank in the world. After reading the article it seems one of their London traders nicknamed "the London whale" was buying CDS (no details on which issues) that obviously kept falling and finally went over certian internal limits that even the fast and loose London operations (these losses always seem to be in London ie AIG, UBS, SocGen etc) had to report back to HQ. I had a friend who worked at JP Morgan Chase and they play big there with trading limits larger than most competitors(so any read through to other banks with worries over similar losses should be limited, although knee jerk reaction will be to sell them) with instructions to let management know when positions exceed certain sizes that were far larger then other firms limits before risk mgmt needed to be notified, obviously this one trader went way too large. Comments from Jamie Dimon seem to indicate this will change, which will ultimately impact liquidity in areas they reduce trading limits.
    10 May 2012, 08:03 PM Reply Like
  • Storm Warning
    , contributor
    Comments (155) | Send Message
     
    Sounds reasonable, but what I'd like to see is risk controls that prevent this in the first place. I expect the other investment banks are lacking these controls, too.
    10 May 2012, 08:42 PM Reply Like
  • JaxxBat
    , contributor
    Comments (527) | Send Message
     
    So.. are we buying or selling banks now?
    10 May 2012, 10:05 PM Reply Like
  • ATLCAPLLC
    , contributor
    Comment (1) | Send Message
     
    Derivatives are "weapons of Mass Financial Destruction" and deposit taking Banks should be prohibited from trading in them except for fully covered hedges.
    10 May 2012, 10:11 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2481) | Send Message
     
    Pretty sure the loss is from the department responsible for hedging. Also Buffet owns enough derivatives to make that quote not worth bringing up.
    10 May 2012, 10:22 PM Reply Like
  • Storm Warning
    , contributor
    Comments (155) | Send Message
     
    Don't agree that because Buffet has done something it is OK or correct.
    10 May 2012, 11:15 PM Reply Like
  • rserhus2
    , contributor
    Comments (67) | Send Message
     
    First - its a loss but seems relatively contained and doesn't threaten JPM as a business entity, the banking sector nor the overall global economy. Mr. Market might sell off but this is fear and noise.

     

    Second - yes economic growth is slow, and macro uncertainties are abundant. We do have one certainty and lots of it - liquidity, liquidity, liquidity - and more liquidity - can you say synthetic floor. We might sell off but I would argue valuations are attractive on an absolute and relative level. Did I mention liquidity.

     

    Third - The positions are complex but utilizing Value at Risk and other volatility/correlation risk assessments create misleading summary reports for senior banking professionals. Solution for any position +1 day hold: PM/trader write down for each package - size (concentration), leverage, liquidity, time horizon, maximum loss and why. Using maximum loss and a correlation of 1 will give you a great downside calculation. If you can't explain the portfolio and return/risk in this simple matter - you don't know, and Senior management looking at pages and pages of consolidated roll-ups doesn't know either.
    10 May 2012, 10:22 PM Reply Like
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