Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: Real Man who wrote (347224)	11/2/2007 11:23:29 AM
From: Secret_Agent_Man	Read Replies (1) \| Respond to of 436258

With regard to J.P. Morgan Chase – I recently reported about their most recent derivatives book build in Q2/07 where outstanding notionals increased by 10 TRILLION. I’ve got some very relevant commentary to add to this report: A very good friend of mine used to be a bond trader at J.P. Morgan. He subsequently went on to trade the 10 year bond at one of the very largest N.Y. Dealers for 10 years. He and I had not spoken for about 4 years. I spoke with him on Monday. I asked him if he had any comments about the size of J.P. Morgan’s derivatives book. He told me “no,” and asked, “why should I?” I told him their book grew [new business] by 10 Trillion in the second quarter of 2007, which works out to roughly 151 Billion in new business every business day for an entire quarter. His reply, “That’s impossible”. Coming from a guy who single handedly traded 20 – 25 billion worth of U.S. government bonds in a big day – he knows what he’s talking about. In fact, he was so bewildered by what I had told him – he questioned the veracity of my numbers. I actually had to show him the numbers on the web site for the Office of the Comptroller of the Currency before he would accept them. Getting back to Sabre’s observation about J.P. Morgan and why their predicted demise never seems to materialize. First, folks should understand the VERY SPECIAL relationship J.P. Morgan has always been understood to have had with the Federal Reserve. Amongst financial [banking] industry insiders, J.P. Morgan has long been considered an extension or agent of the Fed who operates in the ‘free market’. We should all remember the existence of this little tid-bit I previously reported on which became public knowledge in early 2006: Of course then again, maybe J.P. Morgan’s blow out quarter where they conducted 5.5 Trillion [old number from 06 – latest quarter, Q2/07 is 10 Trillion] new notional in derivatives had nothing to do with the precipitous drop in the price of natural gas at all. Maybe, it’s just like authorities say, that storage facilities [that no one can practically see or measure] really are full. Maybe J.P. Morgan conducted all that trade to benefit shareholders. But I’ve got a sinking feeling that we’d never be told the difference if things didn’t work out that way. That became abundantly clear when Dawn Kopecki reported in BusinessWeek Online in a piece titled, Intelligence Czar Can Waive SEC Rules, “President George W. Bush has bestowed on his intelligence czar, John Negroponte, broad authority, in the name of national security, to excuse publicly traded companies from their usual accounting and securities-disclosure obligations. Notice of the development came in a brief entry in the Federal Register, dated May 5, 2006, that was opaque to the untrained eye.” So – to directly respond Sabre’s query – It is quite possible that J.P. Morgan [along with a raft of other institutions] IS / ARE insolvent RIGHT NOW, and the clowns running the show won’t tell us. Don’t you see – as long as ‘National Security’ is an issue – regulators are legally [cough, cough] not compelled to tell us. lemetropolecafe.com