Idiot Talmudic Jew Criminal Bruno Iksil loses bet for JPM -- Likely Jew Fed bailout imminent

[CrackSmokeRepublican]

And the levered Jew Scams just keep coming... this time isn't different, it is the same old Talmudic Rip-off... These idiot Jews have been bailed out countless times already... keep an eye open... things may go quick here... and it won't be good for the collective global "goyim" at this point...  --CSR

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JPM Crashing After It Convenes Emergency Call To Advise Of "Significant Mark-To-Market" Losses In Bruno Iksil/CIO Group    
Submitted by Tyler Durden on 05/10/2012 - 16:50 After Hours CDS Fortress Balance Sheet Investment Grade JPMorgan Chase Net Notional Private Equity ratings

Out of nowehere, JPM announced 40 minutes ago that it would hold an unscheduled 5pm call to coincide with the release of its 10-Q. Rumors were swirling as to why. The reason is as follows:  

    JPMORGAN SAYS CIO UNIT HAS SIGNIFICANT MARK-TO-MARKET LOSSES - "Fortress balance sheet" at least until    Bruno Iskil gets done with it.  
    JPMORGAN SAYS LOSSES ARE IN SYNTHETIC CREDIT PORTFOLIO - but, but, net is NEVER, EVER Gross.  
    JPM WOULD NEED $971M ADDED COLLATERAL IF RATINGS CUT ONE-NOTCH
    JPM WOULD NEED $1.7B ADDED COLLATERAL IF RATINGS CUT 2 NOTCHES - how about three notches?
    JPMORGAN: MAY HOLD SOME SYNTHETIC CREDIT POSITIONS LONG TERM - "Level 3 CDS FTW"
    "As of March 31, 2012, the value of CIO's total AFS securities portfolio exceeded its cost by approximately $8 billion"

As a reminder, the CIO unit is where Bruno Iksil was making $200 billion-sized bets. Basically JPM has suffered massive losses at its CIO group most likely due to its IG/HY positions held by Iksil.  

[CrackSmokeRepublican]

More Insider Trading? (JPM)
 

Naw, nothing wrong here....

The highlighted field shows 13,843 $41 PUTs traded today and expire tomorrow for, at the close, about 43 cents.

They're worth a fair bit more than that right now (like $3)

Why would you buy a crapload of $41 PUTs with the stock trading just under $41, for expiration tomorrow, that would be literally worthless in 24 hours unless you knew something in advance?

http://market-ticker.org/akcs-www?post=205824

[CrackSmokeRepublican]

May 10, 2012, 5:29 P.M. ET

JP Morgan Reveals Large Trading Loss; Shares Hammered

By Avi Salzman  

JPMorgan Chase (JPM) fell 6.5% after-hours after saying it incurred "significant mark-to-market losses in its synthetic credit portfolio."

CEO Jamie Dimon apologized on a conference call at 5 p.m. for "egregious mistakes" and an "unbelievably ineffective" trading strategy meant to hedge trading positions.

"This is not how we want to run a business."

Bloomberg News

He said the company's Corporate division was likely to post an $800 million after-tax loss, higher than its previous expectations for profits of plus or minus $200 million. JPM's chief investment office lost $2 billion on its synthetic credit positions while recording a $1 billion gain, mostly by selling credit exposures.

"n hindsight, the new strategy was flawed, complex, poorly reviewed, poorly executed and poorly monitored," he said, according to an initial transcript. "The portfolio has proven to be riskier, more volatile and less effective an economic hedge than we thought."

He didn't go into detail about the specific trading strategy the bank used. The bank's chief investment office has made big, risky bets in recent years under Dimon, employees told Bloomberg. Bruno Michel Iksil, a JPM trader known as "The London Whale", has been building up huge positions in credit default swaps in recent months, enough to move markets, the Journal reported last month.    

Dimon has previously scoffed at media reports calling the firm's risk profile into question. On the conference call, he apologized for being so dismissive.

The company's 10-Q , released just before the conference call, says:

"Since March 31, 2012, CIO has had significant mark-to-market losses in its synthetic credit portfolio, and this portfolio has proven to be riskier, more volatile and less effective as an economic hedge than the Firm previously believed. The losses in CIO's synthetic credit portfolio have been partially offset by realized gains from sales, predominantly of credit-related positions, in CIO's AFS securities portfolio."

Analysts on the conference call were clearly perplexed by the sudden change. JP Morgan was considered to have among the cleanest balance sheets of the major banks. Dimon also noted that the loss could give fuel to critics who say that banks are still too lightly regulated.

Other major banks were also falling on the news.

http://blogs.barrons.com/stockstowatcht ... _news_blog

[CrackSmokeRepublican]

The problem with Tavakoli, is that she doesn't name the "Talmudic Usurious Jew" standing behind the massive Scams at JPM and modern "Finance". Infinite corrupt scams have gone on at many levels led primarily by Jews and their Shabbos Goy cohorts to basically destroy value. A revolution from "above" apparently.  If the USA had a real President instead of a Jew appointed, half-negro Puppet, maybe something could be done to at least counter the Idiot Jew B*tches on Wallsteet or in London like Iksil.  --CSR

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12 May 2012
Tavakoli: JPMorgan May Be a Trading Accident Waiting To Happen

I think the next financial crisis is less than two years away, and it will strike the global real economy as badly as the banking crisis with the collapse of Lehman Brothers.

   Jamie Dimon's SNAFU: JPMorgan's Other Derivatives' Losses
    By Janet Tavakoli
    05/12/2012

    In an August 2010 commentary about JPMorgan's losses in coal trades I wrote: "The commodities division isn't the only area in which JPMorgan is vulnerable. Credit derivatives, interest rate derivatives, and currency trading are vulnerable to leveraged hidden bets. Ambitious managers strive to pump speculative earnings from zero to hero." -- (    <-- this is the classic Jew though Janet...  --CSR)

    At issue is corporate governance at JPMorgan and the ability of its CEO, Jamie Dimon, to manage its risk. It's reasonable to ask whether any CEO can manage the risks of a bank this size, but the questions surrounding Jamie Dimon's management are more targeted than that. The problem Jamie Dimon has is that JPMorgan lost control in multiple areas. Each time a new problem becomes public, it is revealed that management controls weren't adequate in the first place.

    JPMorgan's Derivatives Blow Up Again

    Jamie Dimon's problem as Chairman and CEO--his dual role raises further questions about JPMorgan's corporate governance---is that just two years ago derivatives trades were out of control in his commodities division. JPMorgan's short coal position was over sized relative to the global coal market. JPMorgan put this position on while the U.S. is at war. It was not a customer trade; the purpose was to make money for JPMorgan. Although coal isn't a strategic commodity, one should question why the bank was so reckless.

    After trading hours on Thursday of this week, Jamie Dimon held a conference call about $2 billion in mark-to-market losses in credit derivatives (so far) generated by the Chief Investment Office, the bank's "investment" book. He admitted:

"In hindsight, the new strategy was flawed, complex, poorly reviewed, poorly executed, and poorly monitored."

    But lets get back to commodities. For several years, legendary investor Jim Rogers has expressed his concern to me about JPMorgan's balance sheet, credit card division, and his belief that Blythe Masters, the head of JPMorgan's commodities area, knows so little about commodities. Jim Rogers is an expert in commodities and is the creator or the Rogers International Commodities Index. He also sells out-of-the-money calls on JPMorgan stock. So far, that strategy has worked out well for him. (Rogers gave me permission to publicly reflect his views and his trades.) Moreover, JPMorgan is still grappling with potential legal liabilities related to the mortgage crisis.

    Is Jim Rogers justified in his harsh view of JPMorgan's commodities division? After he expressed his concerns, JPMorgan's coal trade made the news, and it appeared to me that Jim Rogers is on to something. For those of you who missed it the first time, my August 9, 2010 commentary is reproduced below in its entirety. Dawn Kopecki at Bloomberg/BusinessWeek broke the story wherein Blythe Masters' quotes first appeared...

http://www.huffingtonpost.com/janet-tav ... 11844.html

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JPMorgan Used Political Influence With Fed and Treasury to Create London Loss Loophole In Volcker Rule

"It is impossible to calculate the moral mischief, if I may so express it, that mental lying has produced in society. When a man has so far corrupted and prostituted the chastity of his mind as to subscribe his professional belief to things he does not believe, he has prepared himself for the commission of every other crime."

    Thomas Paine

Using political influence with the Fed and the Treasury, JP Morgan overrode concerns at the SEC and CFTC to create a broad loophole in the Volcker Rule which was designed to allow them to continue risky and highly leveraged 'prop trading' in their CIO unit under the phony rationale of 'portfolio hedging.'   This is the backstory on the antics of the 'London Whale' and quite likely their rationale of 'hedging' to justify enormous and manipulative positions in other markets.

Throughout the lead up to the financial crisis, banking lobbyists used their friends at the Fed and the Treasury to suppress the warnings of regulators and undermine reforms to protect the public interest.

One of the most infamous instances was the bullying of Brooksley Born and the silencing of her warning as chairman of the CFTC by Alan Greenspan, Robert Rubin, and Larry Summers.   PBS Frontline: The Warning.

This crony capitalism is one of the reasons why the financial system collapsed, and why the markets are still so dangerously unstable, despite the determined efforts to disguise it with liquidity and lax regulation. The responsibility for this goes back to the Clinton and Bush Administrations at least.

Obama was elected with a mandate to reform, but instead packed his Administration with Wall Street figures. He has one of the worst records for pursuing financial frauds in the last twenty years.

It is time to stop apologizing for and tolerating the soft corruption that has characterized the Obama Administration's policy on the financial sector since day one. The price of giving him a pass on this failure to do his job and making excuses for him is too high.    The excuse that Romney will be worse is not acceptable.

The Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustained growth and recovery.

NY Times
   JPMorgan Sought Loophole on Risky Trading  
    By Edward Wyatt
    May 12, 2012

    WASHINGTON — Soon after lawmakers finished work on the nation's new financial regulatory law, a team of JPMorgan Chase lobbyists descended on Washington. Their goal was to obtain special breaks that would allow banks to make big bets in their portfolios, including some of the types of trading that led to the $2 billion loss now rocking the bank.

    Several visits over months by the bank's well-connected chief executive, Jamie Dimon, and his top aides were aimed at persuading regulators to create a loophole in the law, known as the Volcker Rule. The rule was designed by Congress to limit the very kind of proprietary trading that JPMorgan was seeking.

    Even after the official draft of the Volcker Rule regulations was released last October, JPMorgan and other banks continued their full-court press to avoid limits.

    In early February, a group of JPMorgan executives met with Federal Reserve officials and warned that anything but a loose interpretation of the trading ban would hurt the bank's hedging activities, according to a person with knowledge of the meeting. In the past, the bank argued that it needed to hedge risk stemming from its large retail banking business, but it has also said that it supported portions of the Volcker Rule.

    In the February meeting was Ina Drew, the head of JPMorgan's chief investment office, the unit that suffered the $2 billion loss...

    JPMorgan wasn't the only large institution making a special plea, but it stood out because of Mr. Dimon's prominence as a skilled Washington operator and because of his bank's nearly unblemished record during the financial crisis.

    "JPMorgan was the one that made the strongest arguments to allow hedging, and specifically to allow this type of portfolio hedging," said a former Treasury official who was present during the Dodd-Frank debates.

    Those efforts produced "a big enough loophole that a Mack truck could drive right through it," Senator Carl Levin, the Michigan Democrat who co-wrote the legislation that led to the Volcker Rule, said Friday after the disclosure of the JPMorgan loss.

    The loophole is known as portfolio hedging, a strategy that essentially allows banks to view an investment portfolio as a whole and take actions to offset the risks of the entire portfolio. That contrasts with the traditional definition of hedging, which matches an individual security or trading position with an inversely related investment — so when one goes up, the other goes down.

    Portfolio hedging "is a license to do pretty much anything," Mr. Levin said. He and Senator Jeff Merkley, an Oregon Democrat who worked on the law with Mr. Levin, sent a letter to regulators in February, making clear that hedging on that scale was not their intention.

    "There is no statutory basis to support the proposed portfolio hedging language," they wrote, "nor is there anything in the legislative history to suggest that it should be allowed."

    While the banks lobbied furiously, they were in some ways pushing on an open door. Officials at the Treasury Department and the Federal Reserve, the main overseer of the banks, as well as the Comptroller of the Currency, also wanted a loose set of restrictions, according to people who took part in the drafting of the Volcker Rule who spoke on the condition of anonymity because no regulatory agencies would officially talk about the rule on Friday.

    The Fed and the Treasury's views prevailed in the face of opposition from both the Securities and Exchange Commission and the Commodity Futures Trading Commission, which regulate markets and companies' reporting of their financial positions. Both commissions and the Federal Deposit Insurance Corporation, which insures bank deposits, pushed for tighter restrictions, the people said...

http://jessescrossroadscafe.blogspot.co ... ading.html

[CrackSmokeRepublican]

Thursday, May 10, 2012

Bruno Iskil and JPM's CIO Office    <-- a Talmudic Jew "Whale"

I have been monitoring Bruno Iskil story since Bloomberg came up with the "whale" story back in April. I have been stumped on why Mr Iskil aka Voldemort built up a huge short protection position in the US Credit Index, CDX US Series IG 9.  The CIO office of JPM is supposed to HEDGE the positions of the bank as a whole.  The bank is generally long risk through loans to corporates.  So it seems inconceivable that Voldemort would SELL protection on these same corporates, which will actually increase the risk to the bank.

However, there is another part to the story that may bring to light the real reason for this strange trade.  JPM may have bought protection in 5yr series 9 (maturing Dec2012) and sold 10yr series 9 (maturingDec2017) to protect the bank against credit spread jump to default risk.  It is effectively a flattener and the bank may have bought more short term protection vs selling long term protection to reduce the cost of the hedge.  This is probably a legacy position from 2007/2008.  However, as the hedge runs down to its maturity, the credit curve of IG9 steepens and it would have hurt.  Furthermore, the delta between the short risk and long risk trade would have shifted dramatically as the short risk trade approached maturity.  Add the illiquidity of the off-the-run indices and JPM would have faced an unwinding nightmare.  (I know because I faced some of the said nightmare in 2009 on a tiny position in off-the-run indices).  And in all likelihood, Mr Iskil probably tried to keep the 10yr IG9 spread suppressed by offering in the market to protect his p/l.  At US$100b, it is a position that cannot be exited in the markets, especially when the index is trading at a discount to the underlying credits.  And when every hedge fund smells blood in the water.  This is one reason why I personally hate trading indices.

My question is this. If the CIO office is HEDGING the bank's risks, why bother with funding it with a long credit risk position.  A hedge is cost, not a trade.  The CIO office should have used other non-credit related products to fund these trades, or just charge the respective departments (which have these long credit risk positions on) for the cost of the hedge.  Instead, the CIO office put on a long risk position and earned "carry" income with the premise that it is funding its shorts.

Another reason could be that the CIO office is hedging JPM's own credit spread.  This is an even crazier reason, and it has all to do with accounting.  Remember in 2008 and 2009 when the banks reported income from widening of their own credit spread?  That's right.  You heard me.   Banks recognised income when the credit spread of their bonds widened.  They view it as a MTM gain on their liabilities, even though there was no conceivable way they could unwind their funding at a profit.  In any case, if JPM's spread were to tighten, they would be forced to restate this so called income from the previous years.  The CIO office could have been tasked with offsetting this move.  But JPM cannot sell protection on itself.  So it does the next best thing.  It sells protection on the index, believing that the correlation between JPM and the index of corporate credits are close, and will remain close.  In other words, JPM's CIO office took on a huge basis position (short JPM risk, long CDS risk) to so call hedge their liability valuation exposure.  And earning carry while hedging can't be bad right?

The third reason seems most unlikely.  It could be that JPM tasked the CIO to "hedge" the bank from inflation risk.  They would put on TIPs (inflation protected government bonds) and sell protection to create a synthetic long risk position that is protected against inflation. The is a very very strange hedge.  It doesn't really hedge the bank against its existing risk book.  Rather it is creating a new risk position that adds to the bank's current position.  If they were looking to protect the portfolio against inflation, they should be looking to pay for long term money at current low rates and become large net borrower in the market while investing said money in TIPs only.  So I personally do not believe this is the reason for the large CDX positions if they are looking truly to hedge.

Alternatively, Mr Iskil could just be trading basis.  He could have bought HY18 and sold IG9 against it and the market went against him (see http://www.zerohedge.com/news/jpm-crash ... ket-losses).  That is proprietary trading and not hedging.

We will probably never know what is the real position in JPM's CIO office.  I doubt Jamie Dimon will actually tell the shareholders what the CIO office is really doing or whether he really knows.  In any case, the best way to see what is really behind the screen will be to monitor the up coming CDX series 19.   I fully expect JPM to build up a large short risk position in the 5yr of the series and balance the trades with single name protection to eliminate index differences between IG9 and IG19 to "hedge" their IG9 position.  Of course this just creates another huge basis position but hey, the Fed is there to change the rules so that they won't have to mark to market the positions.  I just hope that in the next month or so, the risk markets does not deteriorate.  In the meantime, JPM will continue to run their uber-levered CDS short position and pray.

PS

The CIO office made US$5billion in 2010.  Not exactly the p/l of a hedge book.

http://viewfromthewilds.blogspot.com/20 ... ffice.html

[CrackSmokeRepublican]

At the end of the line what do we see?  

Jew Fed -- backstopper

Jew Gamblers -- Wallstreet Kosher Hedge Fund artists / George "Jew" Holohoax-Soros Ripoff Jew Extra-ordinaire ... don't think for a second he isn't making a buck off of Europe's implosion. Like Russia 1998, Asia 1998, Argentina 2003, Iceland 2008, Greece 2012, Hungary 2011... IDIOT JEWS must be TAKEN OUT OF LINE in the SCAM WORLD they openly operate in... lord knows I saw 1998 first hand... God-Damn the Jews.. they are the children of Satan...     ---CSR

Take'em out...  

In 1997, during the Asian financial crisis, the Prime Minister of Malaysia Mahathir bin Mohamad accused Soros of using the wealth under his control to punish the Association of Southeast Asian Nations (ASEAN) for welcoming Myanmar as a member. Following on a history of antisemitic remarks, Mahathir made specific reference to Soros' Jewish background ("It is a Jew who triggered the currency plunge"[29]) and implied Soros was orchestrating the crash as part of a larger Jewish conspiracy. Nine years later, in 2006, Mahathir met with Soros and afterwards stated that he accepted that Soros had not been responsible for the crisis.[30] In 1998's The Crisis of Global Capitalism: Open Society Endangered Soros explained his role in the crisis as follows:

The financial crisis that originated in Thailand in 1997 was particularly unnerving because of its scope and severity.... By the beginning of 1997, it was clear to Soros Fund Management that the discrepancy between the trade account and the capital account was becoming untenable. We sold short the Thai baht and the Malaysian ringgit early in 1997 with maturities ranging from six months to a year. (That is, we entered into contracts to deliver at future dates Thai Baht and Malaysian ringgit that we did not currently hold.) Subsequently Prime Minister Mahathir of Malaysia accused me of causing the crisis, a wholly unfounded accusation. We were not sellers of the currency during or several months before the crisis; on the contrary, we were buyers when the currencies began to decline – we were purchasing ringgits to realize the profits on our earlier speculation. (Much too soon, as it turned out. We left most of the potential gain on the table because we were afraid that Mahathir would impose capital controls. He did so, but much later.)[31]

[CrackSmokeRepublican]

The whole world plays this game with Idiot Jew bankers and Idiot Jew Traders:
[youtube:1zlzqs57]http://www.youtube.com/watch?v=lRnQUHw2cs8[/youtube]1zlzqs57]

[CrackSmokeRepublican]

Jamie Dimon mentioned to be on NY-FED board.... Crazy J-Sh*t Corruption at work   :

[youtube:36ed6tbz]http://www.youtube.com/watch?v=yycVl6jwKYQ[/youtube]36ed6tbz]

[CrackSmokeRepublican]

Looks like a couple of Israelis are running the "Black Box" for Derivatives Trades by JPM/Goldman Sachs   .  It only figures at this point that Globally Jewry will try and bankrupt "Goyim" Globally with the $60 Trillion in Derivatives... they probably all attended the same Yeshiva... at least in evil spirit if not in fact. This is epic in terms of JEW SCAMS.  The Israeli "Orchid Developments Group Limited" stock has dropped from 167 EU in 2007 to 2.5 EU today.   From ZeroJewsEventually...  --CSR

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Non-existent internal controls!

Because while JPM can blame an entire prop trading office for a pair trade gone wrong, it will have a very tough time explaining how marks impacting billions in P&L could have sneaked past the middle and back office.

Which, however, is possible, at least in theory.

This brings us to MarkIt - a company that has long been in the public eye for being the primary source of CDS marks, which would be great if not for one small glitch: it is also partially owned by the same banks which stand to benefit if MarkIt "nudges" the market in one way or another.

The following report from Mark Mitchell from 2009 does a great job of exposing some of the potential dirt that MarkIt may be involved in, and raises some critical questions that have never been answered, and which if addressed in the past could have spared JPM shareholders, and potentially US taxpayers, billions in losses:

    Did The Markit Group, A Black-Box Company Partially Owned By Goldman Sachs and JP Morgan, Devastate Markets?

    Last year, the media reported that New York Attorney General Andrew Cuomo had sent subpoenas to Markit Group as part of an investigation into possible manipulation of credit default swap prices by short sellers. This investigation, like Mr. Cuomo's other investigations into market manipulation, have yielded no prosecutions.


    The Department of Justice is reportedly investigating Markit Group for anti-trust violations. This investigation (which is reportedly focused on how Markit Group packages and sells its information) seems to acknowledge that Market Group has near-monopolistic control of information about credit default swap prices. However, if the press reports are correct, the DOJ has not considered the possible appeal of this monopolistic control to market manipulators.

    Meanwhile, Henry Hu, the director of the Securities and Exchange Commission's division of risk, has said that it has been nearly impossible for the SEC to conduct investigations into any matter concerning credit default swaps because the commission does not have access to any data on the trading of CDSs. In itself, this is a shocking admission.  It is all the more shocking when one considers that the necessary data exists and might be in the hands of The Markit Group – a black box company based in London.

    A thorough investigation of Markit Group is urgently required.

    Here is what we know so far:

Markit Group was co-founded by Rony Grushka, Lance Uggla, and Kevin Gould. Prior to founding Markit Group, Mr. Grushka's main line of business was investing in Bulgarian property developments. He recently resigned from the board of Orchid Developments Group, an Israeli-invested company based in Sophia, Bulgaria. Messrs. Uggla and Gould formerly worked for Toronto-Dominion Bank in Canada.

        Markit Group's founders also include four    hedge funds.  However, Markit Group refuses to disclose the names of those hedge funds. In response to an inquiry, a Markit Group spokesman said it was "corporate policy" to keep the names of the    hedge funds secret, but he would not say why Markit Group had such a policy. It seems worth knowing whether those hedge funds have any influence over Markit Group's published information or indexes, and whether those hedge funds are trading on that information. It would also be worth knowing whether those hedge funds or affiliated hedge funds have engaged in short selling of public companies whose debt and stock prices were profoundly affected by the information that Markit Group published.

Goldman Sachs (NYSE:GS), JP Morgan Chase (NYSE:JPM) and several other investment banks also have ownership stakes in Markit Group. The investment banks received their stakes in exchange for providing trading data to Markit Group. It would be worth knowing whether these investment banks engaged in short selling ahead of Markit Group's published indexes and price quotations.

        Markit Group is secretive about how it creates its indexes. In early 2008, The Wall Street Journal noted that the CMBX simply "doesn't make sense" and that Markit Group's indexes "might be exaggerating the amount of distress" in the home and commercial mortgage markets. In 2008, the average prediction for defaults on commercial mortgages was 2%. The CMBX implied that the default rate could be four times that level.
        When short seller David Einhorn initiated his famous public attack on Lehman Brothers, one of his central arguments was that the CMBX (the index that was likely "exaggerating the amount of distress") proved that Lehman had overvalued the commercial mortgages on its books.
        In March 2008, the Commercial Mortgage Securities Association sent a letter to Markit Group asking it disclose basic information about how the CMBX index is created and its daily trading volume. "The volatility in the CMBX index, caused by short sellers, distorts the true picture of the value of commercial-mortgage-backed securities," the group said in a statement.

Markit Group is equally secretive about how it derives its "prices" for credit default swaps. A spokesman for the company spent close to one hour talking to Deep Capture. He did his job well and sounded like he was trying to be helpful. But he told us as little as possible.

        However, in the course of this conversation, we did learn that Markit Group's "prices" are not actual, traded prices. They are mere quotations. The Markit Group has what it calls "contributors" – hedge funds and broker-dealers that provide it with information. Markit Group has a grand total of 22 "contributors." Deep Capture asked Markit Group's spokesman for the names of these "contributors." The spokesman said he would try to find out the names and call back later. He never called back.
        The 22 "contributors" provide Markit Group with quotations, and these quotations become the Markit Group's "price." In other words, the "contributors" can quote any price for a CDS that they choose, regardless of whether anyone is actually willing to buy the CDS at that price. Markit Group looks at these quotations. Then it somehow decides which quotations make the most sense. Then it publishes information that purports to represent the actual market price of that CDS. This process is certainly unscientific. And it is ripe for abuse.
        Consider, for example, the Markit Group "price" for CDSs insuring the debt of company X.  The Markit Group price strongly suggests that company X is going to default on its debt in the immediate future. Short sellers eagerly point to the Markit Group CDS "price" as evidence that company X is doomed. Panic ensues, and suddenly, company X really is doomed. But the fact is, nobody ever bought a company X CDS at the price quoted by Markit Group. Rather, that panic-inducing "price" was, in effect, pulled out of a hat. Who pulled it out of a hat? That is matter of immense importance. There are two possible scenarios:
        The first possible scenario is that the 22 "contributors" report their quotations in good faith. They should be sending the actual traded price, not just a quotation, but assume they are just doing what was asked of them. From these quotations, Markit Group somehow decides what the "price" should be. It is possible that this decision is based on some secret formula (which would be worrisome); or it is possible that Markit Group executives sit around a table debating what the price should be and take a shot in the dark (which would be even more worrisome); or it is possible that Markit Group deliberately chooses the most horrifying price possible in order to assist the short sellers who are affiliated with its owners (which would be a matter for the authorities).
        The second possible scenario is that Markit Group acts in good faith (if not scientifically), but one or more of the 22 "contributors" or their affiliates has an interest in seeing company X fail. If just one of those "contributors" sends in an astronomically high quotation, that could be enough. Markit Group factors the absurd quotation into its posted "price" and it suddenly becomes possible to convince the world that company X is about to default on its debt.  Panic ensues, the firm's layer of debt dries up, the stock price plunges, and perhaps the "contributor" or its affiliate make a lot of money.
        As Deep Capture understands it, CDS quotations suggested by the 22 "contributors" also help determine the movement of the CMBX and ABX indexes. The movement of these indexes did serious damage to the American economy in multiple ways. The  indexes prompted write downs at most of the major banks and mortgage companies. They were ammunition for short sellers, like David Einhorn   , who claimed that companies had cooked their books by not writing down to the rock bottom prices suggested by the Markit Group indexes. They helped precipitate the decline in prices of mortgage securities, and contributed mightily to the panic that spread across the markets.  A lot of people made a lot of money as result of those indexes moving downward. So, it is rather important to know more about how those indexes are formulated, and if they can be driven by the same people who are making directional bets on their movements.

Conclusion: Ten years ago, there was no such thing as a credit default swap. Six years ago, a very small number of investors traded credit default swaps as hedges against the long-shot possibility of corporate defaults. Nobody looked to credit default swaps as reliable indicators of corporate well-being.

     

Then, suddenly, there were over $60 trillion in credit default swaps outstanding. That is, over the course of a few years, somebody had made over $60 trillion (many times the gross domestic product) in long shot bets that borrowers would default on their debt. As this derivative risk marbled through the system, the trading in credit default swaps was completely opaque. Nobody knew who bought them, who sold them, or at what price.
    ...

     

    These "prices" were not prices in any meaningful sense of the term.  But, suddenly, these "prices" became perhaps the single most important indicator of corporate well-being. Assuming that those four hedge funds and the 22 "contributors" (or hedge funds affiliated with them) bet against public companies, it seems more than possible that short-sellers got to run the craps table, call the dice, and place bets, all at the same time.

    So perhaps it is not surprising that a lot of long-shot rolls paid off quite nicely.

Bottom line: Jamie Dimon's "tempest in a teapot" just became a fully-formed, perfect storm which suddenly threatens his very position, and could potentially lead to billions more in losses for his firm.

http://www.zerohedge.com/news/second-ac ... ault-swaps

[CrackSmokeRepublican]

Jew-PR (NPR) is blaming "Lyme Disease" instead of traditional rip-off Kosher Talmudism for the "Big Whale"... --CSR

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http://pd.npr.org/anon.npr-mp3/npr/totn ... 4.mp3?dl=1

Tick Talk: Lyme Disease Under The Microscope

May 25, 2012

Banking giant JPMorgan's multibillion-dollar trading loss is blamed on an executive's absence due to Lyme disease. And a mild winter has some scientists predicting a busy tick season ahead. A panel of experts discuss how the infection is contracted, why it's often misdiagnosed and the most effective treatment options.  

Copyright © 2012 National Public Radio®. For personal, noncommercial use only. See Terms of Use. For other uses, prior permission required.

JOHN DANKOSKY, HOST:

This is SCIENCE FRIDAY. I'm John Dankosky, in for Ira Flatow. You've probably already encountered them this year, buried deep in your pet's fur, maybe on your own skin - yes, ticks. These bloodsuckers are often no bigger than a poppy seed, but they can wreak havoc with your health and your pet's.

Infected ticks are the main culprits in the transmission of Lyme disease. It's being blamed for causing a senior banker at JPMorgan to miss a lot of work, leading to a more than $2 billion blunder. Lyme disease can be debilitating. The symptoms can range from fever and fatigue to neurological problems, but there's not agreement about how to diagnose and treat the infection.

After all, Lyme disease has been called the great imitator. Its symptoms often mimic those of many other ailments. So how is Lyme disease transmitted? Why is it so tricky to detect and treat? And are we really seeing more of these nasty ticks than ever before?

If you have a question about Lyme disease, give us a call. Our number is 1-800-989-8255. That's 1-800-989-TALK. If you're on Twitter, you can tweet us your questions by writing the @ sign, followed by scifri. If you want more information about what we'll be talking about this hour, go to our website at http://www.sciencefriday.com, where you will find links to our topic.

Let me bring in our guests. Dr. William Schaffner is professor and chair of the Department of Preventive Medicine and professor of medicine in the Division of Infectious Diseases at Vanderbilt University School of Medicine. He joins us from Nashville today. Welcome back to SCIENCE FRIDAY, Doctor.

WILLIAM SCHAFFNER: Good to be with you, John.

DANKOSKY: Dr. Thomas Mather is a professor of public health entomology and director of the Tick Encounter Resource Center at the University of Rhode Island. People refer to him as the tick guy, and he joins us today on the phone from Kingston, Rhode Island. Hi there, Dr. Mather.

THOMAS MATHER: Hi, John. Glad to be with you today.

DANKOSKY: I'll start with you, Dr. Mather. When exactly is one most at risk of contracting Lyme disease?

   



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