Employees are being told that they may apply for other positions now.
Speculation is that this is also in response to position limits and other reforms in the Commodity Markets spearheaded by Commissioner Bart Chilton which will make it more difficult for large players to dominate the short term markets through sheer position size.
It is not clear if JPM will be exiting all markets at the same time including gold and silver in addition to other commodities.
We will look for clarification from their official statement which has not yet been issued.
According to a person who has been briefed, JPM will eventually be shutting down ALL proprietary trading in all markets in response to financial reform. This will include fixed income and equities which are much larger departments at the bank.
JPM recently suffered heavy losses in their proprietary commodity trading provoking a high level review by top executives.
JPM may continue to deal in these markets for commercial and private customers. They will cease trading for their own book.
It will be interesting to see what JPM does with RBS Sempra, a commodities company which they acquired earlier this year.
Bloomberg JPMorgan Said to End Proprietary Trading to Meet Volcker Rule By Dawn Kopecki and Chanyaporn Chanjaroen
Aug 31, 2010 4:45 PM ET
JPMorgan Chase & Co., the second- largest U.S. lender by assets, told traders who bet on commodities for the firm’s account that their unit will be closed as the company begins to shut down all of its proprietary trading, according to a person briefed on the matter.
The bank eventually will end all proprietary trading to comply with new U.S. curbs on investment banks, said the person, who asked not to be identified because
“FASCISM SHOULD MORE APPROPRIATELY BE CALLED CORPORATISM, AS IT IS THE MERGER OF CORPORATE AND GOVERNMENT POWER. THE TWENTIETH CENTURY WILL BE KNOWN IN HISTORY AS THE CENTURY OF FASCISM. DEMOCRACY IS BEAUTIFUL IN THEORY; IN PRACTICE IT IS A FALLACY. SOCIALISM IS A FRAUD, A COMEDY, A PHANTOM, A BLACKMAIL. FOR FASCISM THE STATE IS ABSOLUTE, INDIVIDUALS AND GROUPS ARE RELATIVE. IT BELIEVES NEITHER IN THE POSSIBILITY NOR THE UTILITY OF PEACE. FASCISM IS A RELIGION." BENITO MUSSOLINI
Note to Blythe Masters: Sorry to hear about your losses in the coal market because of a ‘rookie error’ in taking on overlarge positions, but an epic short squeeze is coming for your massive and untenable positions in silver and gold, and hell is coming with it.
And the vampire squid and its minions are going to wrap themselves around your neck, and inexorably suck the life from you, while the hedge funds lick your wounds. Your protectors in the government will not even return your calls, because they will be running for their own lives away from the disaster that you created, denying all knowledge of it, any of it.
Blythe Masters, JPMorgan Chase & Co.’s head of commodities, sought to reassure her team on an internal conference call after “extremely difficult” dismissals, defections and a first half in which some results were as much as 20 percent below expectations.
“Don’t panic,” she said in summing up the 35-minute call, a recording of which was obtained by Bloomberg News. “No one’s going to get screwed. We’re not going to do crazy things on compensation at the end of the year.”
Masters, who was named to run the business in late 2006, said the bank began dismissals on July 21, a day before the call, to trim overlap after buying parts of RBS Sempra Commodities LLP. The bank cut less than 10 percent of the combined front office, even as the oil unit lost “key people” who needed to be replaced, she said. She was discussing results with top executives after “we made a bit of
And I have pointed out that (1) the giant banks will make a killing on carbon trading, (2) while the leading scientist crusading against global warming says it won’t work, and (3) there is a very high probability of massive fraud and insider trading in the carbon trading markets.
Now, Bloomberg notes that the carbon trading scheme will be centered around derivatives:
The banks are preparing to do with carbon what they’ve done before: design and market derivatives contracts that will help client companies hedge their price risk over the long term. They’re also ready to sell carbon-related financial products to outside investors.
[Blythe] Masters says banks must be allowed to lead the way if a mandatory carbon-trading system is going to help save the planet at the lowest possible cost. And derivatives related to carbon must be part of the mix, she says. Derivatives are securities whose value is derived from the value of an underlying commodity — in this case, CO2 and other greenhouse gases…
Who is Blythe Masters?
She is the JP Morgan employee who inventedcredit default swaps, and is now heading JPM’s carbon trading efforts. As Bloomberg notes (this and all remaining quotes are from the above-linked Bloomberg article):
Masters, 40, oversees the New York bank’s environmental businesses as the firm’s global head of commodities…
As a young London banker in the early 1990s, Masters was part of JPMorgan’s team developing ideas for transferring risk to third parties. She went on to manage credit risk for JPMorgan’s investment bank.
Among the credit derivatives that grew from the bank’s early efforts was the credit-default swap.
Some in congress are fighting against carbon derivatives:
“People are going to be cutting up carbon futures, and we’ll be in trouble,” says Maria Cantwell, a Democratic senator from Washington state. “You can’t stay ahead of the next tool they’re going to create.”
Cantwell, 51, proposed in November that U.S. state governments be given
By SG Value Investor. Originally published at ValueWalk.
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The next BRICS summit, in Goa, is less than two months away. Compared to only two years ago, the geopolitical tectonic plates have moved with astonishing speed. Most BRICS nations are mired in deep crisis; Brazil’s endless political/economic/institutional debacle may yield the Kafkaesque impeachment of President Dilma Rousseff.
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When one looks back over the past 10-years and compares the performance of Banks to the broad markets, banks look broken. We shared with members last week that since the highs in 2007, banks have under performed the S&P 500 by nearly 77%. Is this under performance about to end?
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Epizyme was founded in 2007, and trying to create drugs to treat patient's cancer by focusing on genetically-linked differences between normal and cancer cells. Cancer areas of focus include leukemia, Non-Hodgkin's lymphoma and breast cancer. One of the Epizme cofounders, H. Robert Horvitz, won the Nobel Prize in Medicine in 2002 for "discoveries concerning genetic regulation of organ development and programmed cell death."
Before discussing the drug targets of Epizyme, understanding epigenetics is crucial to comprehend the company's goals.
Genetic components are the DNA sequences that are 'inherited.' Some of these genes are stronger than others in their expression (e.g., eye color). Yet, some genes turn on or off due to external factors (environmental), and it is und...
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