Tag: finance

JPMorgan may have had zero trading loss days in 2013 but 2014 is not shaping up well for Jamie Dimon’s firm. Just out from Reuters and BBG, which is reporting what the firm just announced at its investor day:

• JPMORGAN CHASE & CO EXECUTIVE: MARKET REVENUE YEAR-TO-DATE DOWN ABOUT 15 PCT VS YEAR AGO
• JPMORGAN CHASE & CO EXECUTIVE: MARKET REVENUE DOWN BROADLY YEAR-TO-DATE, BUT WORSE IN FIXED INCOME
• JPMORGAN SAYS HAS SEEN LOWER CLIENT ACTIVITY, ESP FIXED INCOME

And if the company feels compelled to report this now, one can only imagine what ridiculous addbacks JPM will have to do on earnings day: we can certainly expect at least $2 billion in loan loss reserves releases to make up for a reality that firmtly refuses to comply with Ph.D. economist models. And what is really funny, is that judging by the stock reaction, it is almost as if the algos don’t know that nobody trades bonds when it snows outside. Duh.

via Zero Hedge http://ift.tt/1ljBTbD Tyler Durden

The most stunning chart from today’s plethora of JPMorgan investor day presentations was this one derived from the expense chart on page 22, listing the firm’s various non-corporate and corporate legal expenses, as well as foreclosure related matters: in other words, the amount of money the company pays to continue operations as an implicit criminal enterprise, however without ever having to admit or deny guilt to the US department of justice, and without the resulting incarcerations. Think of it as racketeering money by Uncle Sam to allow JPM to continue operations. The number: since 2010 JPM has paid a mindblowing $29.8 billion in “one-time, non-recurring” legal fees, charges, settlements, and otherwise expenses that in theory at least should not be part of its ongoing business operations…. but are.

 

If nothing else, this chart explains why Jamie Dimon’s bonus was hiked by 74% in 2013 to $20 million, and why, on the one year anniversary of his legendary quote explaining why he is richer than you, he is, well, just that.

 

One other thing the chart explains is this news from the WSJ:

J.P. Morgan’s Chief Compliance Officer Leaves Firm

 

JPMorgan’s chief compliance officer has left the nation’s largest bank as J.P. Morgan grapples with a variety of regulatory headaches, lawsuits and investigations, according to a memo reviewed by The Wall Street Journal and people familiar with the move.

 

Cindy Armine, who was in the post for roughly one year, exited for a position with another company, according to the company memo. The new company wasn’t named in the memo, but people familiar with the move expect her to take a job with First Data Corp., the Atlanta payment processor run by former J.P. Morgan executive Frank Bisignano. A First Data spokeswoman couldn’t be reached immediately for comment.

 

Mr. Bisignano has recruited several former colleagues since leaving J.P. Morgan last April, angering some old counterparts at J.P. Morgan. First Data agreed last month to pay millions of dollars to J.P. Morgan in exchange for a pledge from the bank that it wouldn’t challenge any new hires, said people familiar with the deal.

 

The exit of Ms. Armine is the latest in a string of high-profile departures as the bank works to improve controls and satisfy regulators. Her role involved direct dealings with U.S. regulators and monitoring of J.P. Morgan’s compliance with all laws and regulations.

At least no nail guns were involved in this termination after just one year.

via Zero Hedge http://ift.tt/1etI98x Tyler Durden

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Bill Gross, by his own admission, is a demanding boss; but as the WSJ reports, one day last June (amid the bond sell-off), things went a little turbo (leading to Mohamed El-Erian's recent resignation):

Gross: "I have a 41-year track record of investing excellence… What do you have?"

 

El-Erian: "I'm tired of cleaning up your shit."

While careful to deny that El-Erian's departure had anything to do with 'friction' although even Mr.Gross admits he can be difficult to work with,"sometimes people will say 'Gross is too challenging,' and maybe so. I would say if you think I'm challenging now, you should have seen me 20 years ago."

Funny what happens when a 30 year bull market for bonds starts to stall out..

 

Tension increased at Pacific Investment Management Co.'s headquarters here last summer. The bond market was under pressure, losses grew and clients pulled billions of dollars from the firm.

Last summer, bonds came under pressure because investors were worried the Federal Reserve would reduce its bond purchases. In June, investors withdrew $9.6 billion from Mr. Gross's fund. "Don't jump ship now," Mr. Gross wrote clients that month.

 

But more investors cashed out, adding to the stress. Disagreements between Mr. Gross and Mr. El-Erian became common over trading strategy, personnel decisions, new products and more, employees say.

 

Some of Mr. Gross's decisions struck some employees as unusual. Last summer, during a rough time in the market, Mr. Gross limited the firm's trading, restricting it mostly to sales aimed at raising cash to meet client withdrawals, according to three Pimco employees. Some employees complained to Mr. Gross and Mr. El-Erian that they couldn't buy inexpensive investments and that Mr. Gross didn't seem to trust their abilities. Mr. Gross didn't budge. He had restricted trading during rough patches before. These restrictions were longer, lasting for several weeks, according to the three employees.

 

A Pimco spokesman said the firm's investment committee told employees to limit "nonessential" trading—as it sometimes does during market stress—and that overall trading volume didn't decline during those weeks.

Bill Gross, who co-founded Pimco in 1971 and is largely responsible for building it into a behemoth overseeing almost $2 trillion in assets, struck some of his colleagues as testier than usual. He argued openly with Mohamed El-Erian, Pimco's chief executive—something employees say they rarely had seen.

…

"I have a 41-year track record of investing excellence," Mr. Gross told Mr. El-Erian, according to the two witnesses. "What do you have?"

 

"I'm tired of cleaning up your shit," Mr. El-Erian responded, referring to conduct by Mr. Gross that he felt was hurting Pimco, these two people recall.

In an earlier interview with The Wall Street Journal in January, Mr. Gross denied tension with Mr. El-Erian was a factor in his departure. "It had nothing to do with friction," he said, although he acknowledged he can be difficult to work with. "Sometimes people will say 'Gross is too challenging,' and maybe so. I would say if you think I'm challenging now, you should have seen me 20 years ago."

Interviews with nearly two dozen individuals close to both men and to the firm suggest more-important factors in the departure: a high-pressure work environment that turned less collegial over the past year, a deteriorating relationship between the two senior executives and certain decisions by Mr. Gross that confused some employees.

The environment is 'different'…

Most Pimco investment professionals arrive at the office around 4:30 a.m.—well before trading opens on Wall Street—and stay until 5 p.m. or later. The firm encourages internal competition, current and former employees say.

 

On the trading floor, Mr. Gross doesn't like employees speaking with him or making eye contact, especially in the morning, current and former employees say.

 

He prefers silence and at times reprimands those who break it, even if they're discussing investments, these people say.

But to the future…

Mr. Gross said in a recent interview that he would be stepping back from some investment duties, but others at the firm are skeptical he will give up any control.

 

"I'm ready to go for another 40 years!" Mr. Gross posted on Twitter TWTR -0.88% after Mr. El-Erian's departure.

 

…

 

Since the announcement, Mr. Gross has expressed disappointment and bewilderment over Mr. El-Erian's departure, telling colleagues that Mr. El-Erian was offered whatever he wanted to entice him to stay.

 

Earlier this month, the firm began removing Mr. El-Erian's pictures from Pimco's walls and placing copies of a book he wrote in boxes for storage. They also moved Mr. El-Erian's office to a building far from Pimco's trading floor.

Source: The Wall Street Journal

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Today’s auction of $32 billion in near-cash equivalent 2 Year paper was hardly remarkable. The yield was a somnolent 0.34%, pricing through the 0.343% When Issued courtesy of a strong bid in bonds all day (ignoring the ongoing idiocy of the stock market), below last month’s 0.38% and just modestly above the 0.32% average, which means that despite all the posturing, few are actually expecting the Fed to do much to short-end rates in the next two years. The Bid to Cover did post a bounce to 3.605, above last month’s 3.30, and above the trailing 12 month average which was also 3.30. Perhaps the only thing of note was that the Indirect bid jumped from 28.5% to 34.3%, the highest since June’s 35.83% and well above the 24.7% average, and with Directs taking down 19.3%, it meant that Dealers were stuck with just 46.4%, below the 52.3% 12MMA and the lowest since October.

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A well-placed Morgan Stanley “Utopia” upgrade here, a ‘gigafactory’ promise there, sprinkle in a 37% short-interest and what do you have? Telsa is surging once again (up 17% today)… breaking above a $30 billion enterprise value – just 25% below that of GM, based on Bloomberg’s data.

 

Tesla is now 60% of Ford’s enterprise value and over 75% of GM’s…

 

Chart: Bloomberg

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Well that escalated quickly. It seems the ouster of Yanukovych, heralded by so many in the West as a positive, has done nothing to quell the fear of further economic collapse in Ukraine:

• *UKRAINIANS WITHDREW AS MUCH AS 7% OF DEPOSITS FEB. 18-20: KUBIV
• *DEPOSIT WITHDRAWALS STILL HIGH IN THE EAST, KUBIV SAYS

This is around a 30 billion Hyrvnia loss (over $3 billion) in just 2 days for the banks and the new central bank chief is considering “stabilizing loans” to help banks deal with the liquidity crisis (though Ukraine’s reserves stand at a mere $15 billion).

Reserves are in freefall… and will only get worse if the bank run continues…

via Zero Hedge http://ift.tt/1mFpZuu Tyler Durden

That didn’t take long: merely weeks since he walked out of the Marriner Eccles building and into the sunset, Ben Bernanke is writing his memoirs. AP reports: “Ben Bernanke, who stepped down last month after eight years as chairman of the Federal Reserve, is planning a memoir. Bernanke told The Associated Press on Monday that he will focus not just on the defining moment of his time at the Fed, the 2008 financial crisis, but on the “Great Recession” that followed. “I want people to understand what we knew, when we knew it, how we made decisions and how we dealt with the enormous economic uncertainty,” said Bernanke, who expects to begin meeting with publishers within the next several weeks. Bernanke, 60, says he will cover his entire career at the Fed, starting in 2002, when he joined the Board of Governors.”

So our question to you, dear readers, is what should the title of Bernanke’s book be? Twitter already has some suggestions as can be seen below:

Tweets about “#bernankebooktitles”

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Psychological studies show that swearing and name-calling in Internet discussions shut down our ability to think.

2 professors of science communication at the University of Wisconsin, Madison – Dominique Brossard and Dietram A. Scheufele – wrote in the New York Times last year:

In a study published online last month in The Journal of Computer-Mediated Communication, we and three colleagues report on an experiment designed to measure what one might call “the nasty effect.”

 

We asked 1,183 participants to carefully read a news post on a fictitious blog, explaining the potential risks and benefits of a new technology product called nanosilver. These infinitesimal silver particles, tinier than 100-billionths of a meter in any dimension, have several potential benefits (like antibacterial properties) and risks (like water contamination), the online article reported.

 

Then we had participants read comments on the post, supposedly from other readers, and respond to questions regarding the content of the article itself.

 

Half of our sample was exposed to civil reader comments and the other half to rude ones — though the actual content, length and intensity of the comments, which varied from being supportive of the new technology to being wary of the risks, were consistent across both groups. The only difference was that the rude ones contained epithets or curse words, as in: “If you don’t see the benefits of using nanotechnology in these kinds of products, you’re an idiot” and “You’re stupid if you’re not thinking of the risks for the fish and other plants and animals in water tainted with silver.”

 

The results were both surprising and disturbing. Uncivil comments not only polarized readers, but they often changed a participant’s interpretation of the news story itself.

 

In the civil group, those who initially did or did not support the technology — whom we identified with preliminary survey questions — continued to feel the same way after reading the comments. Those exposed to rude comments, however, ended up with a much more polarized understanding of the risks connected with the technology.

 

Simply including an ad hominem attack in a reader comment was enough to make study participants think the downside of the reported technology was greater than they’d previously thought.

 

While it’s hard to quantify the distortional effects of such online nastiness, it’s bound to be quite substantial, particularly — and perhaps ironically — in the area of science news.

So why do people troll in a rude way?

Psychologists say that many of them are psychopaths, sadists and narcissists getting their jollies. It's easy to underestimate how many of these types of sickos are out there: There are millions of sociopaths in the U.S. alone.

But intelligence agencies are also intentionally disrupting political discussion on the web, and ad hominen attacks, name-calling and divide-and-conquer tactics are all well-known, frequently-used disruption techniques.

Now you know why … flame wars polarize thinking, and stop the ability to focus on the actual topic and facts under discussion.

Indeed, this tactic is so effective that the same wiseguy may play both sides of the fight.

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