By now, it should be well understood that the credit derivatives book in JPMorgan’s chief investment office was woefully mismarked. Worryingly, the practice of marking at the extremes of the bid-offer, giving the most favourable result, was rubber-stamped as acceptable practice by both the bank’s controller and the outside auditor.
The restatement of first quarter earnings in July 2012 only happened as a result of investigators from JPMorgan’s special Task Force discovering that the traders hadn’t supplied the marks “in good faith”. We’re not sure what place “faith” has in decent account practice. The whole Street seemingly disagreed with the marks, as demonstrated by large collateral disputes. In any case, let us examine this lack of good faith by reviewing some of the things the traders said about their marks. Read more
The universe is for sale. Haven’t you heard? It was on the front page of the FT, so it must be. Apparently the Qataris are favourite to buy it. Read more
Starring A. European Banker as the Cookie Monster and Mario Draghi as Ernie:
Ernie gets Cookie Monster to eat a carrot Read more
… but regally proportioned, unemployed gents with untreated gonorrhoea and mother issues generally find it tough going.
Not so with Aim-traded online dating specialist Cupid according to Bronte Capital’s John Hempton who threw up a rather extreme fake profile — Fat, lazy, poor sick guy wants support — to see if he got many bites. Read more
The single currency, and financial markets generally, have been stubbornly stable in the face of the Cypriot mess (ongoing, obvs) and it’s not really clear why.
There were some pretty massive collateral disputes with counterparties that should have set alarm bells ringing around JPMorgan’s chief investment office.
The biggest disputes in absolute dollar terms were with a Morgan Stanley entity (MSCS) and Bank of America (BOA), with several other counterparties out by tens of millions. Read more
Live markets commentary from FT.com
This is being reported as the capital control bill that’s close to being enacted in Cyprus (Greek speakers do please step in if needed) and a very welcome translated list courtesy of Yiannis Mouzakis: Read more
Kinda strange that markets should get all a-jitter just as the Cyprus crisis is moving towards a resolution.
Simon Derrick of BNY Mellon asked on Friday: “The red pill or the blue pill.” The answer — choose reality — seems pretty obvious, but let’s first run through Derrick’s handy re-cap…
What’s the problem?
Cypriot parliament debates banking bills today || BP to use TNK-BP cash for $8bn buyback || Blackstone weighs up potential Dell bid || German business confidence falls || Europe weighs iPhone sale deals with carriers for antitrust abuse || Top StanChart executives called before US regulators || BBVA plans $3.5bn Mexican push || Rosneft and BP announce Arctic projects || Chicago moves to Close 11% of elementary schools in fall || Rajaratnam’s younger brother charged || Blackberry chief confident as Z10 enters US market || Markets roundup || FTAV’s latest Read more
Elsewhere on Friday,
– TARGET2, the ECB and Cyprus.
– The end of gold. Read more
Asian markets lower on Cyprus fears || Cypriot parliament to vote on banking bills as clock ticks || StanChart executives meet US regulators || Loophole in Buy to Help || BP, Rosneft to team up in Arctic || BBVA plans big investment in Mexico || Hedge funds are back Read more