Derivative Exposure
Here is the full Derivative exposure for iBanks, via Jesse's Café Américain:
>
click for jumbo table
>
Hat tip Mish
UPDATE: March 17, 2008 1:55pm
Recognize that this does not mean JPM has $92 Trillion in potential exposure, or that Bear has (had) $13 trillion. Remember, the derivatives are ran as offsetting positions -- kinda like a bookie -- where they should be reasonably balanced, regardless of who wins the game.
Remember, Bookies & iBanks make their money on the spread, not betting on who is going to win the big game . . .
Monday, March 17, 2008 | 12:45 PM | Permalink
| Comments (71)
| TrackBack (0)
add to de.li.cious | 
digg this! | 
add to technorati | 
email this post
TrackBack
TrackBack URL for this entry:
http://www.typepad.com/services/trackback/6a00d8341c52a953ef00e5512d61778833
Listed below are links to weblogs that reference Derivative Exposure:
Comments
I'm in banking compliance why didnt I think of looking there.
Primero
Posted by: JS | Mar 17, 2008 1:01:17 PM
OMG...what happens if JPM implodes?
They have way too much derivative risk to be bailed out in any way.
...is it time to run for the hills yet?
Posted by: blin | Mar 17, 2008 1:11:10 PM
So, if I understand Mish's article, BSC may have presented on the order of $12Trillion (notional) in illiquid OTC derivatives counterparty risk.
JPM might well have bought them just to keep this particular can of worms unopened.
Posted by: Estragon | Mar 17, 2008 1:16:58 PM
To put this into physical perspective, JPMorgan's derivative exposure (91 trillion $) is almost four times greater than the number of miles to the nearest star system: Alpha Centauri.
4.37 light years * 6 trillion miles (1 LY) = 26.22 trillion miles.
Pass the Chalice !!!
Posted by: Douglas Watts | Mar 17, 2008 1:19:48 PM
Even scarier than the whole system collapsing is who is in charge to rectify the situation.
BTW, CNBC teaser just asked if Fed is actually making things worse with all their moves. Funny story...7 years ago, I met a chief economist from one of the top brokers. I told him the Fed should be abolished. He looked at me like I had 3 heads and walked away mumbling.
Posted by: Dee Leverage | Mar 17, 2008 1:24:23 PM
In a word: SCARY
Posted by: Peter Davis | Mar 17, 2008 1:27:53 PM
Does anyone think that it might be a good idea to regulate derivatives, at least to the point that we know whose balance sheet they are sitting on? Or maybe we do not want to know that the organizations do not know either. As Bush said this morning in another one of his brain farts, "the capital markets are operating smoothly". I thought Mark Haines was going to explode after that one.
Posted by: larster | Mar 17, 2008 1:31:08 PM
Thanks, Barry for the Jesse's Cafe Americain link. In looking through some of the earlier posts, I saw this very well-stated comment that sums up where we are headed:
"The deceit and fraud will continue until stopped by an external regulatory force not controlled by special interests."
Bingo.
The only question is how much pain and wealth destruction we must endure to get to the point where this arms-length regulatory group can be assembled and put to work doing the REALLY heavy lifting.
Posted by: tradahmike | Mar 17, 2008 1:31:35 PM
The US and Mexico are going to do a default swap of standards of living.
This is how it starts.
Posted by: Mike | Mar 17, 2008 1:34:44 PM
"I might sound like an idiot, but why on earth is JP Morgan's 'State' listed as Ohio. And Merry Lynch listed as Utah??"
JPM is descended from Bank One which was hq'ed in Ohio.
Posted by: TempusFugit | Mar 17, 2008 1:35:16 PM
Who, besides the Fed and Treasury signed off on JPM's buyout of BSC? Who else was in the room (or on the conference calls)? The four remaining IBs, right? The SEC? Reps from the Senate and House banking committees? Who else? Who's rigging our "free-market system" for the benefit of their millionnaire/billionniare pals on Wall Street and the Hill?
Posted by: MitchN | Mar 17, 2008 1:43:58 PM
Well, that makes the quote on CalculatedRisk's page make a lot more sense.
"Bill Winters - JPMorgan Chase - Co-CEO, JPMorgan Investment Bank
That's right. In fact what we've -- we were very pleasantly surprised to see that [Bear Stearns] was a very well run, tight operation with good risk controls and a risk discipline that was very similar to our own."
Posted by: Mikkel | Mar 17, 2008 1:44:12 PM
Anyone know what an OTC forwards are?
Posted by: Eric Davis | Mar 17, 2008 1:46:48 PM
I've never been a big Dylan Ratigan fan...but his report from the exchange floor just now was brutally bad. He said "what is going on is a battle of optimists and pessimists", then they brought on Jeff Macke to talk to him to basically promote their Fast Money Show. On an important day, Ratigan comes up small.
Posted by: Dee Leverage | Mar 17, 2008 1:47:18 PM
Now who has the greatest self-interest in keeping the derivatives business not falling apart?
Posted by: Aurora Borealis | Mar 17, 2008 1:47:22 PM
Currency Report should be relabeled "Pain Train Schedule"
Now departing...Bear Stearns.
Posted by: Tim | Mar 17, 2008 1:49:56 PM
Thoughts on gold and oil? I would not be long here in a deflationary crash.
Posted by: Dee Leverage | Mar 17, 2008 1:57:09 PM
Barry, nothing like lots of leverage right up until the time it turns on you, and then you have Hell to pay with it snapping at your arse night and day. There is no way this ends well.
Posted by: SPECTRE of Deflation | Mar 17, 2008 1:57:35 PM
"Anyone know what an OTC forwards are?"
OTC - over the counter
http://en.wikipedia.org/wiki/Forward_contract
Posted by: mhm | Mar 17, 2008 1:57:47 PM
OT- Jim Cramer on BSC. Classic
http://www.redlasso.com/ClipPlayer.aspx?id=ae47b67d-2523-4946-a2ad-aadc68176f67
Posted by: saltwater | Mar 17, 2008 1:59:07 PM
Dee, you and I are on the same page concerning commodity prices and a deflationary crash. When you fail to generate enough new credit/debt to service the existing credit/debt, game over, and even worse when destruction of credit/debt is occuring. Few see it, but it will hit like a Tsunami.
Posted by: SPECTRE of Deflation | Mar 17, 2008 2:01:54 PM
Discrimination I protest
Posted by: Alfred | Mar 17, 2008 2:02:14 PM
Roman, some of us have been saying this for quite awhile although board concensus seems to be stagflation. Tell that to the 20,000 CA teachers who will be laid off.
Posted by: SPECTRE of Deflation | Mar 17, 2008 2:03:58 PM
great Cramer clip...NO WAY to weasel out of that one...not a good week for Jimbo, what with his friend, what's his name...oh Spitzer.
Here they are in some happier times
Posted by: Dee Leverage | Mar 17, 2008 2:06:19 PM
Saltwater,
love the Cramer piece. I knew he had said that but now watching it, BSC was trading at $62.97 and he was so adament, "no,no,no dont sell it!". I'm not always right either, but I wonder how many of his stooges lost a bundle on that call. I have to watch him tonight just to see him squirm.
Posted by: B.B. | Mar 17, 2008 2:08:40 PM
