This story is all over MSM weeeeeeeeeeeeeeeeeeeeeeee
Submitted by Tyler Durden on 05/10/2012 - 17:49 Ben Bernanke Capital Markets CDS Collateralized Debt Obligations Collateralized Loan Obligations Convexity Credit Crisis Deutsche Bank Dresdner Kleinwort Lehman Norway Prop Trading Risk Management
A month ago we warned that JPM's CIO office is nothing short of the world's largest prop trading desk. Not only were we right, but what just transpired is just shy of our worst possible prediction. At the end of the day, the real question is why did JPM put in so much money at risk in a prop trade because we can dispense with the bullshit that his was a hedge, right? Simple: because it knew with 100% certainty that if things turn out very, very badly, that the taxpayer, via the Fed, would come to its rescue. Luckily, things turned out only 80% bad. Although it is not over yet: if credit spreads soar, assuming at $200 million DV01, and a 100 bps move, JPM could suffer a $20 billion loss when all is said and done. But hey: at least "net" is not "gross" and we know, just know, that the SEC will get involved and make sure something like this never happens again.
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http://www.zerohedge.com/news/worlds-largest-prop-trading-desk-just-went-bust
Realist - Everybody in America is soft, and hates conflict. The cure for this, both in politics and social life, is the same -- hardihood. Give them raw truth.
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