Elusive Trope's picture

    Another Trope Pondering: Thor, Obama and Haiti

    Many people will spend considerable time discussing that Obama will raise somewhere near a billion dollars. But then I think about this:

    Marvel's Avenger has already through last weekend grossed domestically $389,473,290

    The Hunger Games has already through last weekend grossed domestically $387,870,286

    Together they have grossed $777,343,576.  That is more than Obama raised for his entire 2008 campaign.

    For some perspective.  After the earthquake in Haiti, US donors contributed over a 15 day period $528,000,000+.


    Putting money in perspective is good. 

    Something else to consider -- JPMorgan's $2-3 billion trading loss.

    It sounds gargantuan but according to their website:

    With assets under supervision of $2 trillion and assets under management of $1.4 trillion, we are one of the largest asset and wealth managers in the world

    Notice that is trillions that they manage/supervise.  In one division.  If my rusty calculations are correct, the loss is less one-tenth of one percent of a small part of the money they control.  

    ​Yes, perspective matters. A $2-3 billion loss may give politico and media types the vapors but why is Dimon freaking out?

    Because they are still exposed?

    The biggest U.S. bank by assets has already disclosed $2 billion of paper losses, and Chief Executive Jamie Dimon said it could lose another $1 billion or more.

    The losses will grow, some traders say, because it appears JPMorgan has only sold a small portion of its position, leaving it vulnerable to price swings in a thinly traded market. Others are not so sure the bank will suffer much more than it already has. Dimon said the bank won't rashly sell, and any additional losses could arise throughout the year. A JPMorgan spokeswoman declined comment.

    The source of JPMorgan's problems is an obscure group of indexes that track the performance of corporate bonds. One of the indexes, the Markit CDX NA IG Series 9 maturing in 2017, is essentially a portfolio of credit default swaps - basically contracts that protect against default by a borrower.

    Maybe, but still does not rationally explain Dimon's behavior -- unless he is playing some form of B'rer Rabbit.   At that level of gamesmanship, you are not supposed to let the other side see you sweat.


    The $1.4 trillion is assets under management or custody.  They aren't JPMorgan's assets, they belong to clients.  Dipping into that cash in the pursuit of financial stability is a no-no.  It's what happened at MF Global.

    That said, JPMorgan clearly has sufficient capital to absorb a one time $3 billion loss.  I gather that Dimon is angry to have figured out that the controls are not in place to make sure it's a one time event. Also, his reputation is now tarnished and his opposition to the Volcker Rule now carries a lot less weight (though there is a limit to how lightweight Dimon's opinion can be, when he's writing checks to campaigns).

    Well, duh.  What exactly did you think I was saying?  I would never suggest co-mingling or co-opting client funds.  What sort of compliance officer would I be?

    I used the assets under management to illustrate the size of the loss and to offer some perspective on how much money a bank that size work with.   I am not even sure that $2-3 billion would even be a basis point of one day's flow of funds for them.

    I agree that Dimon's outrage is likely more due to the chink in his amour-propre than any financial loss.


    I forgot you were a CCO. :)

    CCO?  Hardly.

    I did eventually make officer at a small regional speciality shop but that was because regulations required an officer to sign off on stuff that I knew plus I was most the easily scapegoatable of the small group. :-D

    Working in operations at branch offices and in small regional firms you get to be more of a generalist in financial operations and regulations.  Generalist suits me fine.  I bore easily.  


    And in the end, the fact it took Obama an entire campaign - with all the enthusiasm it had - to raise 750 million now has a little more perspective.

    A bit of Br'er Rabbit it is:

    JPMorgan Chase, as crazy as it might sound, could actually benefit from the loss and the hit to the stock price. The bank is currently in the process of buying billions of dollars of its stock. The decrease in the bank's value allows the company to purchase more shares than it would have been able to before, Mosby says.

    That and even more perspective here at USAToday.

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