Posts from Friday Mar 22 2013

“I thought, I thought that was, that was not realistic, you know, what we were doing” – The London Whale

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

About that M&S bid rumour …

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

Getting Cookie Monster to eat carrots

Starring A. European Banker as the Cookie Monster and Mario Draghi as Ernie:

Ernie gets Cookie Monster to eat a carrot Read more

Love is a many splendoured thing…

… 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

Intransigence in the face of Cyprus

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.

 Read more

This is the CIO! Take your silly market-making prices and [redacted] — Part 2

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

Markets Live: Friday, 22nd March, 2013

Live markets commentary from 

CONTROLS (in Cyprus)

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 MouzakisRead more

Cyprus – just pop the red pill, please

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?

 Read more

The (early) Lunch Wrap

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

Further reading

Elsewhere on Friday,

– TARGET2, the ECB and Cyprus.

The end of gold. Read more

The 6am Cut London

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