It looks like you're using an Ad Blocker.

Please white-list or disable AboveTopSecret.com in your ad-blocking tool.

Thank you.

 

Some features of ATS will be disabled while you continue to use an ad-blocker.

 

"JPM Derivatives Monster Grows" - Crash predicted in 2002 by Adam Hamilton

page: 1
0

log in

join
share:

posted on Mar, 26 2009 @ 03:16 PM
link   

"JPM Derivatives Monster Grows" - Crash predicted in 2002 by Adam Hamilton


www.zealllc.com

Ominously, this relatively small equity capital balance is supporting a crushing inverted derivatives pyramid weighing a colossal $30,434b! $30,434b of notional value derivatives controlled by JPM divided by its shareholders� equity of $42.735b (note this is a decimal-point in the equity number, NOT a comma as in the derivatives number) yields a simply unfathomable implied leverage of derivatives to equity of 712 times! �Holy cow!� as they say in the American Midwest.

Also provocatively, it is exceedingly interesting to note that derivatives exposures of this magnitude have never before weathered the violent and unpredictable financial storms of mighty secular bear markets. Derivatives essentially began growing in significance in the 1970s and 1980s, and every investor knows that the greatest bull market in US history ran from 1982-2000 (see �Century of the Dow�). How will the massive inverted derivatives pyramids fare in brutal and unforgiving bear market environments? Only time will tell.

As I wrote back in the original Monster essay, I am still just as flabbergasted today that big institutional investors, who have a sacred fiduciary duty to zealously protect the hard-earned capital entrusted to them by their precious clients, would risk their clients� scarce capital by investing in JPM, not just a Dow 30 superbank but the biggest inverted derivatives pyramid in world history!

A �bank� with $712 of derivatives exposure for every $1 in stockholders� capital, in my humble opinion, is no longer a bank but a de-facto hedge fund.
(visit the link for the full news article)




posted on Mar, 26 2009 @ 03:16 PM
link   
This guy predicted the problems we are in now in 2002 when he wrote this article, which is actually a follow up of his original article written before 9-11. This is an interesting read.

The question I have is who is Adam Hamilton? What is his company ZEAL? And, if he was publishing this information that far back, how can any banking executive, elite investor, or Federal official say that they had no idea that the derivatives market had gotten so out of hand.

The data presented in this article was from 2002... If you follow the link to the JPM quarterly reports you will see that the numbers grow even worse as time goes bye.

By the way, Adam Hamilton said that he took a short on JPM back in 2002. If he held on to that short he must be filthy rich by now.


www.zealllc.com
(visit the link for the full news article)



 
0

log in

join