Big banks cashing in on oil (and other commodities)

Big Banks Cash In on Commodities

A group of 10 large banks-including Goldman Sachs Group Inc., Morgan Stanley, J.P. Morgan Chase & Co., Citigroup Inc., Bank of America Corp. and Barclays PLC-saw their commodities revenues increase by 55% in the first quarter, according to Coalition, a firm that analyzes the performance of investment banks. After a disappointing 2010, commodities was the fastest-growing segment in banks' fixed-income businesses in the first three months of this year, even though it still accounts for just 7% of banks' total fixed-income revenues, Coalition said.

J.P. Morgan has emerged as one of the biggest beneficiaries of the commodities boom sweeping Wall Street. The bank's commodities unit-which employs about 1,800 people, more than any of its rivals-made more money during the first quarter than through all of last year, according to people familiar with the matter. So far this year, the unit has earned roughly $750 million and is on course to beat its 2011 internal target of $1.2 billion, these people added. The J.P. Morgan unit earned just $514 million for all of 2010, falling far short of its goals.

The performance at J.P. Morgan is largely the result of a recent acquisition and the run-up in prices and volatility levels. But the early results are being celebrated inside the halls of J.P. Morgan after the bank struggled through defections, miscues, bad press and a coal trade that cost the firm $130 million in 2010. The New York bank is making a bold and costly bet that a recent string of commodities-trading acquisitions will transform the operation into an industry leader and unseat rivals Goldman Sachs and Morgan Stanley. A bank spokeswoman declined to comment on any commodity-trading dollar figures, which it doesn't make public.

sanders.senate.gov...

What to say really?

How or why can this possibly be legal? Didn't we just bailout these SOB'S a few years ago? now they are making a killing off of higher oil prices??

Those are some ballsy people. Commodities are very very volatile and very risky so it's neat to see people play it and not get wiped out.

Pretty smart folks over there.

reply to post by kro32

Commodities are very very volatile and very risky so it's neat to see people play it and not get wiped out.

yeah, great to see they are still taking insane risks and also profiting on higher prices for oil....even after we bailed them out....all while I pay 4.00 a gallon for gas.

Originally posted by kro32
Those are some ballsy people. Commodities are very very volatile and very risky so it's neat to see people play it and not get wiped out.

Pretty smart folks over there.

It's not ballsy when the game is rigged, wtf?
2nd

Q: What's a bigger commodity than oil?
A: Humans!

Humans addicted to oil = big money!

It's genius to play one commodity off of another commodity!

Kind of boggles the mind, doesn't it?

Originally posted by Rockdisjoint

Originally posted by kro32
Those are some ballsy people. Commodities are very very volatile and very risky so it's neat to see people play it and not get wiped out.

Pretty smart folks over there.

It's not ballsy when the game is rigged, wtf?
2nd

edit on 2-6-2011 by Rockdisjoint because: (no reason given)

It's not rigged. Those banks took huge gambles and could have lost a bundle. Heck my 401k is spread around some of those and it makes me a bit nervous to see them taking huge gambles like that.

Trust me I know that they've taken some heavy losses in the past with bad decisions so it's nice to see them finally call it right for once. I hope they don't do this too often however as it is very risky.

Oh goody...

The banks are gambling playing investing in the stock market with our debt derivatives hedge funds money.

Weeeeeee !

Originally posted by kro32
Those are some ballsy people. Commodities are very very volatile and very risky so it's neat to see people play it and not get wiped out.

Pretty smart folks over there.

Not VERY VERY volatile if you have enough capital to move entire markets, not a very ballsy perspective.

Originally posted by Janky Red

Originally posted by kro32
Those are some ballsy people. Commodities are very very volatile and very risky so it's neat to see people play it and not get wiped out.

Pretty smart folks over there.

Not VERY VERY volatile if you have enough capital to move entire markets, not a very ballsy perspective.

Tell that to my 401k over the last 10 years.

I haven't looked at how much moved but I doubt they manipulated the entire oil commodity market. They took a gamble and it paid off simple as that.

.....its all fun and games until the value of the dollar falls off the side of the planet.

reply to post by Janky Red

Not VERY VERY volatile if you have enough capital to move entire markets, not a very ballsy perspective.

Not much risk when they are guaranteed bailouts.

Can't believe this bs is going on...STILL.

What a joke.

Originally posted by CranialSponge
Oh goody...

The banks are gambling playing investing in the stock market with our debt derivatives hedge funds money.

Weeeeeee !

Did you know that the entire stock market is a gamble? Kinda neat huh?

This is kind of how you get a higher return on your money.

Originally posted by David9176
reply to post by Janky Red

 

Not VERY VERY volatile if you have enough capital to move entire markets, not a very ballsy perspective.

Not much risk when they are guaranteed bailouts.

Can't believe this bs is going on...STILL.

What a joke.

Last I heard the majority of the bailout money has been paid back and things are going back to normal.

reply to post by kro32

It's not rigged. Those banks took huge gambles and could have lost a bundle. Heck my 401k is spread around some of those and it makes me a bit nervous to see them taking huge gambles like that. Trust me I know that they've taken some heavy losses in the past with bad decisions so it's nice to see them finally call it right for once. I hope they don't do this too often however as it is very risky.

haha
One day you tell me your a kid in college, but now you have a 401k? Can college kids even have a 401k?

Originally posted by kro32

Originally posted by Rockdisjoint

Originally posted by kro32
Those are some ballsy people. Commodities are very very volatile and very risky so it's neat to see people play it and not get wiped out.

Pretty smart folks over there.

It's not ballsy when the game is rigged, wtf?
2nd

edit on 2-6-2011 by Rockdisjoint because: (no reason given)

It's not rigged. Those banks took huge gambles and could have lost a bundle. Heck my 401k is spread around some of those and it makes me a bit nervous to see them taking huge gambles like that.

Trust me I know that they've taken some heavy losses in the past with bad decisions so it's nice to see them finally call it right for once. I hope they don't do this too often however as it is very risky.

Again, they have enough capital to control any given comodity, they source their money from the money wellspring for the love of mercy, thank you FED. They control Oil and they can predict and ride other fungible comodities based upon that one position, open your eyes, there is no risk to the house, there are write offs which is the cost of doing business, that is the extent.

reply to post by kro32

Last I heard the majority of the bailout money has been paid back and things are going back to normal.

Normal...as in....stealing and plundering everyone else in the damn country.....then yeah...I can agree with NORMAL.

Originally posted by kro32

Originally posted by CranialSponge
Oh goody...

The banks are gambling playing investing in the stock market with our debt derivatives hedge funds money.

Weeeeeee !

Did you know that the entire stock market is a gamble? Kinda neat huh?

This is kind of how you get a higher return on your money.

Or crash and burn ?
Kinda neat huh ?

Did you know that the stock market is just numbers on a piece of paper and holds no physical monetary value ?
Kinda neat huh ?

Did you know that the banks hold the entire economic monetary marketing system in their hands ?
Kinda neat huh ?

Did you know that banks used to just be oversized piggy banks where people entrusted their hard earned monies ?
Kinda neat huh ?

Originally posted by kro32

Originally posted by Janky Red

Originally posted by kro32
Those are some ballsy people. Commodities are very very volatile and very risky so it's neat to see people play it and not get wiped out.

Pretty smart folks over there.

Not VERY VERY volatile if you have enough capital to move entire markets, not a very ballsy perspective.

Tell that to my 401k over the last 10 years.

I haven't looked at how much moved but I doubt they manipulated the entire oil commodity market. They took a gamble and it paid off simple as that.

Mam or sir

Look at the history of the financial collapse

Hoffmeister and now Tillerman have now stated that speculation is inflating the barrel, this speculation is being used to manipulate the primary market, which then fans out control of other positions and the actual violatility
throughout. In 2008 OIL was used to initiate the death spiral, entities were able to position themselves correctly
to anticipate reactions and human nature.

Originally posted by David9176
reply to post by Janky Red

 

Not VERY VERY volatile if you have enough capital to move entire markets, not a very ballsy perspective.

Not much risk when they are guaranteed bailouts.

Can't believe this bs is going on...STILL.

What a joke.

They should have guaranteed capital punishment


But now that we have opened the door for unlimited tinkering of politics and money we are done for.

Ron Paul and Jesus couldn't straighten out this mess

reply to post by Janky Red

They should have guaranteed capital punishment But now that we have opened the door for unlimited tinkering of politics and money we are done for.

Yeah, it's looking pretty bleak isn't it. The entire economy nearly tanked and we still have the same bs that caused it happening years later.

Ron Paul and Jesus couldn't straighten out this mess

I bet Sarah Palin could..lol.