24 October 2008

OCC Derivatives Report: The Four Horsemen of the Apocalypse

In the latest Report from the Office of the Comptroller of the Currency, Derivatives Holdings in the United States have reached some lofty levels as of June 30, 2008.

If Derivatives are Weapons of Mass Destruction, Here Are the Dealers

The even worse news is that the exposure is increasingly concentrated in the top four US Banks. With their intended acquisition of Wachovia, Wells Fargo gets to move up in the charts.

Commodity Derivatives are proving to be a popular preoccupation for some of the frat boys of Wall Street. As you may recall, commodity prices have been taking a wild ride up to about the middle of this year, and then collapsed spectacularly.

So what are we looking at here: the winners or the losers?

Two players seem to hold the biggest hands, JPM and Bank of America.

A special thanks to our friends at The ContraryInvestor who created the graphics from this OCC report. The site is invaluable to anyone who is serious about the US markets and the economy.