Obama and Wall Street

[Weinosker]

What a sad, sad existence it must be to wake up every morning and spend the day posting as nasty things as possible, true or not, fair or not, logical or not, intelligent or not, about another person.

HUH?

[Inflation]

All hedging is speculative - even the hedge that's intended to reduce risk. If you re-read the intent behind the trade that lost JP Morgan $2 billion, they were trying to accomplish both.

Isn't the reason JP Morgan is losing money is that they control almost all of the position and other investor's are taking advantage of that fact.

[Inflation]

All hedging, by definition, (a) reduces risk and (b) requires speculation. Defining and regulating what types of hedges are OK and what types are not would be an inherently arbitrary exercise.

Could we start with hedges that are leveraged 30 to 40 times? Any investment has a certain about of risk, an airline hedging the price of fuel, or a farmer hedging the price of corn is much different than the hedging that brings down an investment firm.

[Huskerwirejay]

Agreed. The legitimate criticism of Obama is that his policies have been bad for both Wall Street and Main Street. I am convinced that Dodd Frank, if and when it goes into effect, will be the cause of another major market crash.

Thus the delicious irony of this ad.

Instead of being too cozy with Wall Street, as the commercial complains he is, most think that he is on the verge of over-regulation with potentially very harmful outcomes.

Bumper Stickers From MAKESTICKERS.COM

[Weinosker]

Isn't the reason JP Morgan is losing money is that they control almost all of the position and other investor's are taking advantage of that fact.

Before, I start, I want to make sure you saw my other posts and make sure that we are clear about the history of JP Morgan and its solvency.

1. JP Morgan is not losing money... They lost money on one big trade (they are still profitable overall). In fact, the link below details that the unit of JP Morgan responsible for the trade is still profitable - let alone the company as a whole. This is not a crisis.

2. I don't know the answer to your question about how much of the position JPM controlled though. I haven't seen detailed enough information about it. This market is still not a real liquid market for these type of securities, so even if they didn't have a big % of the position, some big bets against the position could hurt them.

Here's the closest thing I could find that addresses your question: http://dealbook.nytimes.com/2012/05/...e-at-least-50/

[Inflation]

Before, I start, I want to make sure you saw my other posts and make sure that we are clear about the history of JP Morgan and its solvency.

1. JP Morgan is not losing money... They lost money on one big trade (they are still profitable overall). In fact, the link below details that the unit of JP Morgan responsible for the trade is still profitable - let alone the company as a whole. This is not a crisis.

2. I don't know the answer to your question about how much of the position JPM controlled though. I haven't seen detailed enough information about it. This market is still not a real liquid market for these type of securities, so even if they didn't have a big % of the position, some big bets against the position could hurt them.

Here's the closest thing I could find that addresses your question: http://dealbook.nytimes.com/2012/05/...e-at-least-50/

http://www.cnbc.com/id/47469753

JP Morgan is a bank and their depositor's are insured by the taxpayers. If they want to trade in these types of off the books derivatives they should give up their government back stop protection and become a private hedge fund with no taxpayer back stop.

The article is pretty good. JP Morgan has also layered CDO on top of CDO.

[COsker]

What a sad, sad existence it must be to wake up every morning and spend the day posting as nasty things as possible, true or not, fair or not, logical or not, intelligent or not, about another person.

Speaking of posting things that are true or not, fair or not, logical or not, intelligent or not, about another person.....

I understand it may hit a sore spot with those committed to looking away and supporting Obama no matter what, but don't see a good reason to go after me for posting a commercial pointing out the irony of what President Obama has said about Wall Street bankers versus what he has done.

[COsker]

Thus the delicious irony of this ad.

Instead of being too cozy with Wall Street, as the commercial complains he is, most think that he is on the verge of over-regulation with potentially very harmful outcomes.

B- for effort. A for tenacity. F for content.

Obama is a run-of-the-mill, garden variety politician. Mr. Obama says what his followers and milk-toast undecideds want to hear, shuffles them out the front door, while greeting those he just criticized with a nod and wink through the back door.

Welcome boys. You know, *wink* *wink*, that was for the "little people". Now, about those campaign contributions....

[Warhorse]

Agreed. The legitimate criticism of Obama is that his policies have been bad for both Wall Street and Main Street. I am convinced that Dodd Frank, if and when it goes into effect, will be the cause of another major market crash. The pendulum is going to swing from allowing hedges to become to arcane and complex that no one can understand them to being too restrictive on allowing hedging. That means greater risk exposure for the banks.

And many believe that Dodd-Frank is only the first step in what should have been much stricter regulations including a new version of Glass-Steagall. The greatest risk of another major market crash comes from allowing big banks to speculate. "Too big to fail is too big." Three of the four biggest banks prior to the crash of the economy are even bigger now and JP Morgan Chase clearly demonstrates that the game is still afoot.

[Cardinal]

Speaking of posting things that are true or not, fair or not, logical or not, intelligent or not, about another person.....

I understand it may hit a sore spot with those committed to looking away and supporting Obama no matter what, but don't see a good reason to go after me for posting a commercial pointing out the irony of what President Obama has said about Wall Street bankers versus what he has done.

Don't worry. I am not going after just you. There will be others. And what you guys are doing by being so divisive, as were those before you when W was President, is hurting the country more than anything any President has ever done. Because Obama has not governed all that much differently than W, who did not govern all that much differently than Slick Willie, who did not govern all that much differently than GHW Bush. It takes the greatest intelligence to be able to see both sides of issues and all optional shades of gray in between. Those that can't from either extreme of the political spectrum are killing this country. If we don't begin to work together, we are done.

[Weinosker]

http://www.cnbc.com/id/47469753

JP Morgan is a bank and their depositor's are insured by the taxpayers. If they want to trade in these types of off the books derivatives they should give up their government back stop protection and become a private hedge fund with no taxpayer back stop.

The article is pretty good. JP Morgan has also layered CDO on top of CDO.

No, they should be required to comply with the regulations that exist. They have plenty of reserves to cover $28 Billion in losses without entering any territory. JP Morgan has not had a solvency issue despite your incorrect information shared in other threads.

You do understand that packaging and trading CDOs/CMOs is core to offering loans to customers now, right? So far in this debate you've:

--Confused JP Morgan with Morgan Stanley
--Shown your lack of knowledge around hedging

I think you may want to educate yourself more on this topic before forming such strong opinions.

[Weinosker]

And many believe that Dodd-Frank is only the first step in what should have been much stricter regulations including a new version of Glass-Steagall. The greatest risk of another major market crash comes from allowing big banks to speculate. "Too big to fail is too big." Three of the four biggest banks prior to the crash of the economy are even bigger now and JP Morgan Chase clearly demonstrates that the game is still afoot.

Really? Have you researched this in depth? JP Morgan helped bail out the economy with their purchases of Bear Stearns (and their toxic assets) and WAMU (and their toxic loan portfolio).

Yet, throughout, they've maintained good standing, built incredible reserves, and run a good business. The thing that the cnbc article linked by inflation doesn't tell us is how much of that $100 billion includes legacy CDOs/CMOs that were already on the books before this crisis (many of which came from Bear Stearns). The government is only making it worse with unspecified regulations continuing to limit liquidity in that market.

[Weinosker]

Don't worry. I am not going after just you. There will be others. And what you guys are doing by being so divisive, as were those before you when W was President, is hurting the country more than anything any President has ever done. Because Obama has not governed all that much differently than W, who did not govern all that much differently than Slick Willie, who did not govern all that much differently than GHW Bush. It takes the greatest intelligence to be able to see both sides of issues and all optional shades of gray in between. Those that can't from either extreme of the political spectrum are killing this country. If we don't begin to work together, we are done.

Here's my issue: You attacked COsker for posting a video that could create compelling discussion. Give the personal crap a rest and join the conversation with some substance.

Now to address your post: You are completely right about how W. governed in my opinion, and you are right that Obama has continued down that path. I completely disagree with your opinion of Pres. Clinton. The republicans were quite divisive during that time, but somehow budgets still got passed and we enjoyed several years of incredible prosperity.

And, look at him now, friends with the Bush family. Besides his personal issues that created some drama for a while, he was a very effective President in my opinion. I don't agree with all of his policies, but can apprecaite what he got done and what he left alone.

[Cardinal]

Here's my issue: You attacked COsker for posting a video that could create compelling discussion. Give the personal crap a rest and join the conversation with some substance.

Now to address your post: You are completely right about how W. governed in my opinion, and you are right that Obama has continued down that path. I completely disagree with your opinion of Pres. Clinton. The republicans were quite divisive during that time, but somehow budgets still got passed and we enjoyed several years of incredible prosperity.

And, look at him now, friends with the Bush family. Besides his personal issues that created some drama for a while, he was a very effective President in my opinion. I don't agree with all of his policies, but can apprecaite what he got done and what he left alone.

Sorry, but I am going to continue to criticize those that drive deeper the wedge in this country. I have nothing substantive to add to this thread because the issue that was attempted to be made has no legitimacy and it was simply a wedge driving post, imo. Every President in modern times surrounds himself with Wall Street minds. Duh. Wall Street is the single largest driver of the U.S. economy.

With regard to Clinton, I agree 100%. I didn't say those four were equally skilled at governing, just that their politics behind their governing positions were very similar, as is the case with the positions of the middle 70%-80% of this country.

[Weinosker]

Sorry, but I am going to continue to criticize those that drive deeper the wedge in this country. I have nothing substantive to add to this post because the issue that was attempted to be made has no legitimacy and it was simply a wedge driving post, imo. Every President in modern times surrounds himself with Wall Street minds. Duh.

With regard to Clinton, I agree 100%. I didn't say those four were equally skilled at governing, just that their politics behind their governing positions were very similar, as is the case with the positions of the middle 70%-80% of this country.

I don't think the politics were similar at all

[Huskerwirejay]

.... don't see a good reason to go after me for posting a commercial pointing out the irony of what President Obama has said about Wall Street bankers versus what he has done.

He said he wasn't running for office to help out Wall Street bankers and based on the additional regulations and restriction placed on Wall Street bankers in the Obama years, he has stood by his pledge.

Even FOX understands that.

[Cardinal]

I don't think the politics were similar at all

Imo, they were all moderates. No Sierra Clubbers. No Tea Partiers.

[Weinosker]

Imo, they were all moderates. No Sierra Clubbers. No Tea Partiers.

Clinton was a moderate (certainly from the last year of his first term and all the way through his 2nd term). I don't believe Bush was a moderate and I don't believe Obama is a moderate.

[Warhorse]

Really? Have you researched this in depth? JP Morgan helped bail out the economy with their purchases of Bear Stearns (and their toxic assets) and WAMU (and their toxic loan portfolio).

Yet, throughout, they've maintained good standing, built incredible reserves, and run a good business. The thing that the cnbc article linked by inflation doesn't tell us is how much of that $100 billion includes legacy CDOs/CMOs that were already on the books before this crisis (many of which came from Bear Stearns). The government is only making it worse with unspecified regulations continuing to limit liquidity in that market.

Researched what in depth?? Have you not been paying attention? The loss at JP Morgan Chase is $5 billion and counting and today Dimon reveals that he knew exactly what was going on but that he "didn't monitor the situation carefully enough." The risk-taking that nearly brought our economy down is still going on. Transparency and accountablity through more regulation, not less is what is needed. "Too big to fail is too big" and these big banks need to be broken up.

[Weinosker]

Researched what in depth?? Have you not been paying attention? The loss at JP Morgan Chase is $5 billion and counting and today Dimon reveals that he knew exactly what was going on but that he "didn't monitor the situation carefully enough." The risk-taking that nearly brought our economy down is still going on. Transparency and accountablity through more regulation, not less is what is needed. "Too big to fail is too big" and these big banks need to be broken up.

It would help you to do some researched this event.

A fact check: The biggest number I've seen is $3 Billion http://www.theatlantic.com/business/...5-days/257312/

Feel free to refute with a link if you can find it.

A few questions for you to consider here:

--Are these assets (CDOs/CMOs) all newly purchased securities?

--Or, is there potential that there are still securities on the books from the Bear Stearns acquisition? (If so, what were they suppossed to do about those securities?)

--How big do the losses need to get before JP Morgan posts a loss for the current quarter?

--How much does JP Morgan have in reserves to cover these losses?

--How are the answers to these questions different than the answers 3 years ago when this crisis began?

These are all important questions to ask before you start throwing out the rhetoric that you are using.