From The Nation
By Alexis Goldstein
''Bloomberg reported in April that a J.P. Morgan trader dubbed by the media as “the London Whale” had a $100 billion trade that was so large it was distorting the market. Specifically, this trader is said to have sold $100 billion worth of credit default swaps on a group of high-grade North American companies (the NA IG CDX Index). What that means is that J.P. Morgan made a $100 billion bet that investment-grade corporate debt would remain strong or get stronger and that the companies would be free from defaults.
This position is huge for the market in which it trades. Lisa Pollack at FT Alphaville pointed out that the total outstanding notional across the entire market for this index for March was nearly $150 billion. This is interesting because back in February, Dimon said that at J.P. Morgan, “we don’t make huge bets.''
read more
No comments:
Post a Comment