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trackstar
Posts: 27426
Joined: August 28th, 2008, 1:53 pm

JP Morgan- 2 billion trade loss

May 23rd, 2012, 1:06 pm

Soon to be a major motion picture, no doubt.Cannes 2013.
 
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frenchX
Posts: 5911
Joined: March 29th, 2010, 6:54 pm

JP Morgan- 2 billion trade loss

May 23rd, 2012, 1:14 pm

QuoteOriginally posted by: trackstarSoon to be a major motion picture, no doubt.Cannes 2013. The Avengers 2 LOL Bruno Iksil is IronMan, Fabrice Tourre is Thor and Jerome Kerviel is Hulk
 
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daveangel
Posts: 17031
Joined: October 20th, 2003, 4:05 pm

JP Morgan- 2 billion trade loss

May 23rd, 2012, 1:14 pm

QuoteOriginally posted by: frenchXQuoteOriginally posted by: daveangelQuote Not to laugh at you but for this time (a rare one you may say) it's more based on a past experience... you mean "laugh with you"... I assumed that you had been conversing with Jerome KervielNo no. But seriously I would have enjoyed such a meeting. Jerome Kerviel, Fabrice Tourre and Bruno Iksil should create a new superleague of superheroes called "The ex superstar french traders who believed they could rule the world and where f*cked in the back by their bank".I am glad you spotted the common theme amongst those names
knowledge comes, wisdom lingers
 
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frenchX
Posts: 5911
Joined: March 29th, 2010, 6:54 pm

JP Morgan- 2 billion trade loss

May 23rd, 2012, 1:18 pm

QuoteOriginally posted by: daveangelQuoteOriginally posted by: frenchXQuoteOriginally posted by: daveangelQuote Not to laugh at you but for this time (a rare one you may say) it's more based on a past experience... you mean "laugh with you"... I assumed that you had been conversing with Jerome KervielNo no. But seriously I would have enjoyed such a meeting. Jerome Kerviel, Fabrice Tourre and Bruno Iksil should create a new superleague of superheroes called "The ex superstar french traders who believed they could rule the world and where f*cked in the back by their bank".I am glad you spotted the common theme amongst those namesYes they are french, that's what you mean ? But well maybe that means that also a big proportion of derivative traders in big desks are french, don't you think ?
 
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daveangel
Posts: 17031
Joined: October 20th, 2003, 4:05 pm

JP Morgan- 2 billion trade loss

May 23rd, 2012, 1:20 pm

Quote Yes they are french, that's what you mean ? But well maybe that means that also a big proportion of derivative traders in big desks are french, don't you think ? no I dont think - perhaps its just that most of the rogue traders are french
knowledge comes, wisdom lingers
 
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frenchX
Posts: 5911
Joined: March 29th, 2010, 6:54 pm

JP Morgan- 2 billion trade loss

May 23rd, 2012, 1:26 pm

If you want some stats just look herehttp://en.wikipedia.org/wiki/List_of_trading_lossesUS is very well represented in my opinion ...
 
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ppauper
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Joined: November 15th, 2001, 1:29 pm

JP Morgan- 2 billion trade loss

May 23rd, 2012, 2:04 pm

QuoteOriginally posted by: trackstarSoon to be a major motion picture, no doubt.Cannes 2013. whatever happened to matthew (mdubuque) ?Sundance Film Festival
 
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daveangel
Posts: 17031
Joined: October 20th, 2003, 4:05 pm

JP Morgan- 2 billion trade loss

May 23rd, 2012, 2:51 pm

QuoteOriginally posted by: frenchXIf you want some stats just look herehttp://en.wikipedia.org/wiki/List_of_trading_lossesUS is very well represented in my opinion ...But in $ (or Euro) your country men win, non ?
knowledge comes, wisdom lingers
 
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trackstar
Posts: 27426
Joined: August 28th, 2008, 1:53 pm

JP Morgan- 2 billion trade loss

May 23rd, 2012, 2:58 pm

QuoteOriginally posted by: ppauperQuoteOriginally posted by: trackstarSoon to be a major motion picture, no doubt.Cannes 2013. whatever happened to matthew (mdubuque) ?Sundance Film FestivalI have never seen mdubuque here - would be cool to know how this was received and has he made any other films since then.**Here is my new legislative proposal: FacebookThis could be a good motion picture too - Apocalypto meets Margin Call.
 
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loooooo
Posts: 75
Joined: October 7th, 2009, 3:28 pm

JP Morgan- 2 billion trade loss

May 24th, 2012, 8:14 am

Maybe I'm the only one not getting it right, but please kindly help me understand this issue...I read from an article it was supposed to be a hedge while the WSJ article someone posted the link to says it's not an hedge. If JPM invested in some highly rated securities using their excessive deposits (some say IG corporate bonds and some others say it's TIPS but anyway regardless...), their position in the CDX IG index - a bet on the flattening of the long-maturity end of the term structure - is not a hedge but speculation most obviously. Am I correct? Looks to me like it was the stupid mistake the London Whale made - confusing speculation with hedging - and it was meant to be speculation in the first place, but just can't get why the media says it was meant to be a hedge but turned out to be the opposite...
 
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rmax
Posts: 6080
Joined: December 8th, 2005, 9:31 am

JP Morgan- 2 billion trade loss

May 24th, 2012, 8:44 am

QuoteOriginally posted by: frenchXQuoteOriginally posted by: rmaxQuoteOriginally posted by: ppauperindeed, it is in part prop trading.The example you give is making best use of intimate knowlege of the market to know when the cheapest time to hedge risk will occur to realise benefits for the shareholder.Prop trading is just betting the farm on Red.That's the point. "Yes I was hedging the risk my regulator. portfolio hedging I swear. Ok I knew the house will burn so I wanted to be protected against it. Ok I lock in a profit on my customer back but it was a hedging profit (I love the word) not a speculative one".I was being ironic...
 
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daveangel
Posts: 17031
Joined: October 20th, 2003, 4:05 pm

JP Morgan- 2 billion trade loss

May 24th, 2012, 8:46 am

QuoteOriginally posted by: rmaxQuoteOriginally posted by: frenchXQuoteOriginally posted by: rmaxQuoteOriginally posted by: ppauperindeed, it is in part prop trading.The example you give is making best use of intimate knowlege of the market to know when the cheapest time to hedge risk will occur to realise benefits for the shareholder.Prop trading is just betting the farm on Red.That's the point. "Yes I was hedging the risk my regulator. portfolio hedging I swear. Ok I knew the house will burn so I wanted to be protected against it. Ok I lock in a profit on my customer back but it was a hedging profit (I love the word) not a speculative one".I was being ironic...you should have a little man with a red flag come out every time you try one of those irony things
knowledge comes, wisdom lingers
 
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rmax
Posts: 6080
Joined: December 8th, 2005, 9:31 am

JP Morgan- 2 billion trade loss

May 24th, 2012, 8:54 am

QuoteOriginally posted by: daveangelQuoteOriginally posted by: rmaxQuoteOriginally posted by: frenchXQuoteOriginally posted by: rmaxQuoteOriginally posted by: ppauperindeed, it is in part prop trading.The example you give is making best use of intimate knowlege of the market to know when the cheapest time to hedge risk will occur to realise benefits for the shareholder.Prop trading is just betting the farm on Red.That's the point. "Yes I was hedging the risk my regulator. portfolio hedging I swear. Ok I knew the house will burn so I wanted to be protected against it. Ok I lock in a profit on my customer back but it was a hedging profit (I love the word) not a speculative one".I was being ironic...you should have a little man with a red flag come out every time you try one of those irony thingsStalin
 
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bearish
Posts: 5614
Joined: February 3rd, 2011, 2:19 pm

JP Morgan- 2 billion trade loss

May 24th, 2012, 10:14 am

QuoteOriginally posted by: looooooMaybe I'm the only one not getting it right, but please kindly help me understand this issue...I read from an article it was supposed to be a hedge while the WSJ article someone posted the link to says it's not an hedge. If JPM invested in some highly rated securities using their excessive deposits (some say IG corporate bonds and some others say it's TIPS but anyway regardless...), their position in the CDX IG index - a bet on the flattening of the long-maturity end of the term structure - is not a hedge but speculation most obviously. Am I correct? Looks to me like it was the stupid mistake the London Whale made - confusing speculation with hedging - and it was meant to be speculation in the first place, but just can't get why the media says it was meant to be a hedge but turned out to be the opposite...None of us outside of JPM really has much of a chance to know exactly what the positions were. But, my understanding based on general market chatter is that they were a combination of short and long positions in both the underlying indices (IG and HY) and tranches across the three traded maturities. If that is roughly true, there are two pertinent observations: 1) you need a model to analyze whether you are net long or short "credit risk", let alone your exposure to credit curve steepening/flattening, correlation changes, and other higher order risks; 2) simple-minded terms like "hedging" and "speculation" are not remotely adequate to describe the reshaping of your risk profile inherent in such positions.
 
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deepdish7
Posts: 45
Joined: October 16th, 2010, 6:57 pm

JP Morgan- 2 billion trade loss

May 24th, 2012, 3:59 pm

QuoteOriginally posted by: bearishQuoteOriginally posted by: looooooMaybe I'm the only one not getting it right, but please kindly help me understand this issue...I read from an article it was supposed to be a hedge while the WSJ article someone posted the link to says it's not an hedge. If JPM invested in some highly rated securities using their excessive deposits (some say IG corporate bonds and some others say it's TIPS but anyway regardless...), their position in the CDX IG index - a bet on the flattening of the long-maturity end of the term structure - is not a hedge but speculation most obviously. Am I correct? Looks to me like it was the stupid mistake the London Whale made - confusing speculation with hedging - and it was meant to be speculation in the first place, but just can't get why the media says it was meant to be a hedge but turned out to be the opposite...None of us outside of JPM really has much of a chance to know exactly what the positions were. But, my understanding based on general market chatter is that they were a combination of short and long positions in both the underlying indices (IG and HY) and tranches across the three traded maturities. If that is roughly true, there are two pertinent observations: 1) you need a model to analyze whether you are net long or short "credit risk", let alone your exposure to credit curve steepening/flattening, correlation changes, and other higher order risks; 2) simple-minded terms like "hedging" and "speculation" are not remotely adequate to describe the reshaping of your risk profile inherent in such positions.I would hardly imagine someone in the counterparty exposure hedging department of the bank doing their hedges via bets on curve steepening/flattening. it was a speculation, let's put true names on things
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