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The risk here is likely capital flight. I doubt sophisticated investors really believe the event to the derivative loss is limited to $2b. It is thought that JPM's derivative exposure in the derivative market is into the 100's of Trillions, but that is hearsay for now.
Add to this, "surprise" disclosure that JPM suddenly realized it lost $2b, a downgrade Friday by Fitch and it gets more interesting. http://www.businessweek.com/ap/2012-05/D9UMPQN80.htm
This downgrade will cause JPM to have to come up with another $1b to satisfy capital requirements. I would think Jamie Dimon is holed up this weekend with Bernanke and company doing some discovery and due diligence with regards to what risk is REALLY out there.
The run on the banks at Lehman and Bear Stearns in the financial crisis were acerbated by hedge funds pulling out their money from the Prime Brokerage businesses of these banks as they had concerns about the safety of their capital (the assets of the hedge fund). As the "sudden" $2b loss was the talk of the hedge fund community this week, and then a downgrade the next day, expect some hedge funds to pull their money next week and this could cascade into a run on the bank. If capital exits and these derivative positions that are essentially the market (see stories of Bruno Iksil at ZeroHedge.com) then lookout below. It could be a very interesting week next week.
Then imagine (GUFFAW) going cashless, completely. Nobody needs money, everything is free. A truly MATURE society can handle that: go to the grocery store and get what you need; don't get twelve cases of every canned food they have just because it's free. That'd work, too.
Washington Times Reporter Discusses Investigation Into Obama's Forged Selective Service
Yuppers. I am also waiting for the other shoe to drop. I think Drake said that the time frame went through May 23rd and could extend, if need be. I think I will just stay prepared because I don't see us making it to the election without civil disorder whether from Drake's people or a banking collapse or a racial war or Obummer's people or something else.
I agree Captain Huggy. Something is surely headed our way and I believe it will be prior to November elections as well. Hope for the best but, stay prepared for absolutely ANYTHING!
TO: Joshua Rowe
Sir, they have....I just posted more info on the arrests happening....if you start doing research or just looking you would find the proof that I have already posted and MORE IS COMING ~
Didn't you hear the GEIHNER has already been arrested and an ankle monitor on him?
It was TELEVISED on FOX NEWS 1 month ago...IT IS HAPPENING....
Apparently this was from 2010 and not current.
That is disgusting. I shudder to think what the OWS crowd had in mind for that! I am SO glad that I am nowhere near Chicago.
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great work all..."We The People are ready which ever way the wind blows...
Fox News is like MTV and The Weather Channel: No music, no weather.