A year ago in May 2012 JP Morgan made a loss on credit derivatives trading, which chief executive Jamie Dimon blamed on errors,sloppiness and bad judgement” and warned “could get worse”. Understanding JP Morgan Loss .
Here are some of the findings by The U.S. Senate Permanent Committee on Investigations, which launched an inquiry into the trading loss last fall, is looking into the how different divisions of the bank wound up on opposite sides of the same trade, said one of the people familiar with the matter. source Reuters View full article »
The world financial market where already under pressure from the Euro crisis, untill yesterday late night when the news broke out JPMorgan has trading loss of at least $2 bln, reputation hit . The CIO unit is where Bruno Iksil was making $200 billion-sized bets. Basically JPM has suffered massive losses at its CIO group most likely due to its IG/HY positions held by Iksil.
Below quotes from Mr Jamie Dimon
- “…Errors, sloppiness, and bad judgement.”
- “Bad strategy, badly executed and poorly monitored”
- “It could get worse. This could go on for a little bit.”
- “Badly executed, badly monitored. I’m not going to repeat it 800 times” View full article »
Those of you who have not heard this name recalling for them. Jérôme Kerviel,who became famous in January 2008 as the junior trader who’d lost €4.9 billion at French mega-bank Société Générale.
The Fraud and factors against him :
- The fraud consisted of the taking by the trader of unauthorized directional positions on equities or futures traded on regulated markets, which he concealed by a series of fictitious transactions having no other aim . These transactions for the purchase or sale of equities or warrants with deferred start dates, futures transactions with a pending counterparty, View full article »
The way derivatives have evolved over the years they attracted criticism along with the praise.Corporates continues to take advantage of leverage with them many went belly up and some made fortunes out of them.
Here are some of the Jargons these days the firms uses :
- Diversification : Lets do several things that we don’t know any thing about badly
- Sticking to the knitting or Focus : Lets get back to doing what we once did if any body can remember what it is and how it is to do it
I would like to dedicate today’s post to Rahul Dravid but the time is constraint will write for him soon :- I just don’t like that he is retiring, and people are talking about Sachin tendulkar! The Tragedy of his Life. Few more thing for him If Sachin Tendulkar was the Best thing to happen to Indian Cricket :Rahul Dravid was the Best thing to happen to Sachin tendulkar. ( I think that describes all for him)
The post is for my juniors, who wanted to have few jargon’s simplifications here you go :-
LEASE -BACK : Its an arrangement under which a company, in order to raise cash, sells a piece of equipment, ‘ land, or building on condition. that the buyer will lease it back to the seller for an agreed rental for a fixed term.
LEVERAGED BUYOUT : Taking over a company, using borrowed funds.
LEVERAGED COMPANY : If a company with borrowed funds in its capital structure. if the debt component is more than a third of the capitalization it’s called a highly leveraged company. View full article »
International Swaps and Derivatives Association is the body corporate to make over the counter (OTC) derivatives market safe and efficient.
It has 815 members from 58 countries including global, international and regional banks, asset managers, energy and commodities firms, government and supranational entities, insurers and diversified financial institutions, corporations, law firms, exchanges, clearinghouse and other service providers.
The Key areas of ISDA are
* Reducing counterparty risk
* Increasing the Transparency
* Improve the OTC operational infrastructure.
The details are provided on the ISDA Brochure
Recently ISDA came under criticism on its decision that based on current evidence the Greek bailout would not prompt payments on the (CDS)credit default swaps. View full article »
What is common between the IPOs of Facebook and MCX ?They both have the Morgan Stanley as a lead manager for the IPO.
Both of them in the market since 8 years.
Both the IPO’s will try to revive their moribund IPO respective market.
Well not more things should be compared since the nature of both the entities is
different and there functioning is different. As always IPO’s has more critics as well
as well wishers. Valuations are always on the upper side and the initial investors
(promoters) are set to become millionaires, as India’s first ever share sale by an
exchange opens the next week. Crisil the rating agency graded MCX IPO 5/5 .
MCX has not left no stone – unturned as they failed to launch the IPO 2 times in the past.
MCX is valued at 24.8 times its year-end earnings as on March 31, 2011 at 860 and at29.8 times at 1,032. Its counterparts, the US-based CME and ICE, are valued comparatively cheap at around 16 times their estimated earnings for 2012, (source Blomberg)
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Continuing where I left in my last post Face book all set to fire . As on Feb 1st the social network confirmed its plans for an Initial Public Offerings (IPO) confirming its valuations between $75 billion and $100 billion. The valuation reflect an extraordinary belief that a start-up hardly 8-year-old firm is more valuable than Boeing , the world largest airraftmaker. Are they nuts ??
$100 Billion? 100:1 PE ratio?
I like Facebook but hard to imagine an upside there.
$100B is the same value as Verizon, Cisco, Pepsi or McDonald’s.
Would like to share three things that leaped out at me from Facebook’s financial filing. They involve marketing, hypocrisy and arrogance — in other words, standard Wall Street fair.
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On my way from Mumbai to Bhopal last saturday was fortunate enough to watch the movie Other People’s Money . As I was more curious to know about the heated debate in US whether Private Equity to be termed as Hero or Villan. Those of you who has seen the Wall street series and remember Gordon Gekko,a character resembling popular culture for unrestrained greed (with the signature line, “Greed, for lack of a better word, is good”), often in fields outside corporate finance.
Let us try to understand Private Equity (PE) :
Private equity generally make investments in the operating companies through a variety of loosely affiliate investment strategies leveraged buyout, venture capital and growth capital.Typically, a private equity firm will raise pools of capital, or private equity funds that supply the equity contributions for these transactions.
They have been always in news as people see them as , private equity and job destruction aren’t the source of our employment woes. Rather, it is the clampdown on innovation. Some of the research claims that Private equity ownership resulted in both more rapid job destruction and faster job creation than other forms of ownership.
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a) Blacking out is just your brain clearing it’s browser history. RKNXNDJDXWJJ
b) Europe is starting to make African leaders look competent.
c) In the words of Benjamin Franklin, ‘if we say that money doesn’t buy happiness, it might stop poor people from robbing us.
d) US college kids shouldnt complain. China churns outs 3MM engineers every year, many of whom go back to their parents DVD stall.
e) If you have a job where you have to wear a nametag, nobody gives a shit what your name is.
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