If those bets were $100,000 on each side, I'd say that was a profitable bookie.
Obamanomics. Hope and change.
“Right now, JPMorgan Chase (NYSE:JPM) has more than 67 trillion dollars in exposure to derivatives but it only has 2.5 trillion dollars in assets...”
The usual misunderstanding between notional value and value at risk.
If I bet you $10 the stock market will go down tomorrow, the notional value of that derivative is the billions of dollars that the Dow stocks trade every day. However, the most I can win or lose is still only $10. So do I call this a $100 billion bet? No, I call it a $10 bet.
The actual value at risk from all of JPM’s derivatives, according to the CEO, is about $80 billion. But most of them are hedged to offset each other.
This theory was actually tested when Lehman Brothers failed. There notional value of all the Lehman bets was about twice the assets of Lehman, about $800 billion. But when the 60 biggest players settled up, only $400 million changed hands.
With their interest rates at or near zero and them charging borrowers 4, 5, 6 percent or more they are in paradise.
Give it a few years & we'll witness yet another neat little Government-led/sponsored transfer of assets.
The game is rigged & we're the marks.
But if there was a bet that had a 99% chance of me making $100 MILLION, and a 1% chance of me losing $20 billion, I would take the bet. If I win, I make $100 million. If I lose, I say "I don't have $20B, talk to my bankruptcy attorney".
That's the game the banks are playing. They are betting that an event that would make them lose, would be an event which would bring down the whole banking system, and the feds would have to step in to save things, like they did in 2008.
They’re not too big to fail, they are just the right size now for Lord Foul and holup to blackmail for billions.