Accordingly, it sure is a good thing that the world’s biggest derivatives player – J.P. Morgan – has ‘seemingly’ NEVER, EVER made a bet even ‘1 % wrong’ with their 80 Trillion derivatives book. The Morgue has a Market Cap of roughly $180 billion. A wrong bet of a mere 1% on their ‘book’ would translate to a loss of $800 billion dollars eviscerating their entire capital base more than four times over. The knock on effect from such an event would trigger multiple tsunamis reverberating through the global financial system. Sounds absurd, but it’s pure math.

Derivatives: A Capital Markets Gong Show For Whom The Bell Tolls (GoldSeek, July 1, 2011):

Remember folks, Bill Gross [PIMCO] is reputed to run the world’s largest bond fund. Not only was Gross wrong – in investment terms he was SERIOUSLY WRONG – a great many percentage points wrong. Not only did 10 yr. bond rates not go up by 150 basis points – they have indeed FALLEN by more than 50 basis points.

This illustrates a point; namely, that being the biggest in your space [and having former Fed Chairman Alan Greenspan acting as advisor to your company] doesn’t ensure that you NEVER, EVER make a poor market call and “lose-your-shirt” – so to speak.

Accordingly, it sure is a good thing that the world’s biggest derivatives player – J.P. Morgan – has “seemingly” NEVER, EVER made a bet even “1 % wrong” with their 80 Trillion derivatives book. The Morgue has a Market Cap of roughly $180 billion. A wrong bet of a mere 1% on their ‘book’ would translate to a loss of $800 billion dollars eviscerating their entire capital base more than four times over. The knock on effect from such an event would trigger multiple tsunamis reverberating through the global financial system. Sounds absurd, but it’s pure math.

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