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 Jacob Wolinsky. Originally published at ValueWalk.
In this discussion, students from the University of Nebraska got to ask Bill Gates and Warren Buffett questions of their choosing. The questions vary widely and can be found below. Warren Buffett and Bill Gates are two of the richest people in the world and their answers and advice are invaluable to anyone looking for success.
Date: September 2005
Location: University of Nebraska
We continue to receive requests for updates to the "Best Stock Market Indicator", which used to be a regular guest post from John Carlucci. Here is an update of the "Carlucci" indicator along with a summary of John's explanation on how he uses it.
As John described it: "The $OEXA200R (the percentage of S&P 100 stocks above their 200 DMA) is a technical indicator available on StockCharts.com used to find the "sweet spot" time period in the market when you have the best chance of making money."
I have mixed feelings about Brexit today. Clearly the European institution need reforming. The addition of so many countries in the last 20 years has created a top heavy administration. The Euro adds more complexities to the equation as the ECB policies cannot fit every country's problem. On the other hand, a unified Europe has advantages as well – some countries have benefited from the integration.
For Britain, it's hard to say what the final price will be. My guess is that Scotland might now vote for independence as they supported staying in Europe overwhelmingly. Northern Ireland might be tempted to leave as well so possibly RIP UK in the long run. I was talking to some French people and they were saying that now there might be no incentive for France to stop immigrants from crossing over to the UK like they do now and simply allow for travel there and let the UK deal with them. The end game is not clear to anyone at the moment....
One week ago, when bitcoin first crossed above $700 on the seemingly insatiable Chinese buying which we forecast last September (when bitcoin was trading at $230) would take place as a result of China's capital controls (to much pushback by the "mainstream" financial media), we tried to predict what may happen next. We said that "it could go much higher. That said, anyone who bought last September when the digital currency was trading at $230 may be advised to take some profits, and at least make...
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After a three-year bull run that more than quadrupled its value by its peak last July, IBD’s Medical-Biomed/Biotech Industry Group plunged 50% by early February, hurt by backlashes against high drug prices and mergers that seek to lower corporate taxes.
This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible. Feel free to contact me directly at email@example.com with any questions.
Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts. After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.) Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.
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