SP 500 and NDX Futures Daily Charts - Facebook Face Plant

The Commencement Address That Won’t Be Given
By Robert Reich
Friday, May 18, 2012

Members of the Class of 2012,

As a former secretary of labor and current professor, I feel I owe it to you to tell you the truth about the pieces of parchment you’re picking up today.

You’re f*cked...

Read the rest here.

Facebook closed largely unchanged from the IPO price after an initial pop up to 42. On the first day of trade the underwriters are obligated to support the IPO price. Let's see how it does on Monday.  They seemed to be eating a lot of High Frequency Inventory into the close.

As a point of order, Facebook really went quietly IPO about a year or so at $15, and was being traded on 'private exchanges.' Today was its general public IPO.

NASDAQ blew the open of trade on Facebook in several ways. The NYSE was touting their human backup systems in response.

I think Bernanke will wait until the market is begging before he throws them the next QE bone.

See you Sunday evening.

Bill Moyers Interviews Simon Johnson on JP Morgan Chase and the Next Financial Crisis

“The signs that I see, the body language, the words, the op-eds, the testimony, the way these bankers are treated by certain congressional committees, it makes me feel very worried. I have a feeling in my stomach that is what I had in other countries, much poorer countries, countries that were headed into really difficult economic situations. When there’s a small group of people who got you into a disaster and who are still powerful, you know you need to come in and break that power and you can’t. You’re stuck.”

Simon Johnson


"Financial institutions such as JPMorgan love to buy derivatives because they are opaque, create fictional income that leads to real bonuses and when (not if) they suffer losses so large that they would cause the bank to fail, they will be bailed out."

William K. Black

Are JPMorgan’s Losses A Canary in a Coal Mine?
By Bill Moyers
May 16, 2012

That sound of shattered glass you’ve been hearing is the iconic portrait of Jamie Dimon splintering as it hits the floor of JPMorgan Chase. As the Good Book says, “Pride goeth before a fall,” and the sleek silver-haired, too-smart-for-his-own-good CEO of America’s largest bank has been turning every television show within reach into a confessional booth.

Barack Obama’s favorite banker faces losses of $2 billion and possibly more – all because of the complex, now-you-see-it-now-you-don’t trading in exotic financial instruments that he has so ardently lobbied Congress not to regulate.

Source

See also: Senate Banking Chairman Calls Jamie Dimon to Testify, But JPM Is His Largest Contributor!

Net Asset Value Premiums of Certain Precious Metal Trusts and Funds

Jim Rickards On JP Morgan's Trading (Gambling) Loss - The Hypocrisy of Plutocrats

JPMorgan, the nation's largest bank, receives an explicit federal subsidy (deposit insurance) and a much larger implicit federal subsidy. It's improper for the megabank to use these subsidies to speculate in derivatives. And yet it can do so with hardly any serious regulatory consequences.

Financial institutions such as JPMorgan love to buy derivatives because they are opaque, create fictional income that leads to real bonuses and when (not if) they suffer losses so large that they would cause the bank to fail, they will be bailed out.

The Dodd-Frank Act's Volcker Rule was designed to solve the problem.

However, JPMorgan led the effort to gut the Volcker Rule and the provision that requires transparency. JPMorgan is the world's largest proprietary purchaser of financial derivatives -- precisely what the Volcker Rule sought to end. The bank claims that it does not engage in proprietary trading and that it purchases derivatives solely to hedge. That claim is an example of what Stephen Colbert meant when he invented the term: "truthiness."

William K. Black

What the spokesmodels deftly avoid is the discussion that JPM is not a privately financed hedge fund, but a government supported entity using insured deposits, subsidized funds, and the protection of the Federal Reserve as a bank holding company.

Why was it that the investment banks like Goldman suddenly wanted to become bank holding companies during the financial crisis? Oh yeah, that.

If these jokers want to gamble fine. But Jamie Dimon's mentor Sandy Weil led a lobbying effort that spent hundreds of millions to overturn Glass-Steagall, and now JPM is leading the fight aginst the Volcker Rule.

People don't mind if you bet and lose. They do mind if you cheat and win, and they mind it even more if you keep the money when you win, but you charge it to the public trust when you lose. And that is exactly the game that Wall Street led by JPM is playing right now. And these people know better.

Here is an antidote to the faux market hystrionics on CNBC and Bloomberg TV. Investigating JP Morgan Chase - Simon Johnson
and also Bill Moyers Interviews Simon Johnson on JPM and the Next Financial Crisis