經濟,財務,統計學,數理科學與政治評論

Hello there:

  The latest new in those days are the hedging loss of J.P. Morgan's trading. You know, for me, the financial risk management is  J.P. Morgan. In old days, people from the Goldman Sachs are proud to say that "We are Goldman!!" And I think people from J.P. Morgan are proud to say that "We are the (financial) Risk manager!!" The first class, a decade ago, I learn from the financial risk management is the lecture notes developed by J.P. Morgan. J.P. Morgan is in title of the best trainer of risk manager in old days. How come they lose those money?? They are not hurt from the crisis of subprime mortgage event. They are not hurt from a lot of financial disasters. How come they lose this time?? I  do not know, I just know even I learn and pass "the international certificate of baking risk and regulation" lately, this series of lecture notes are written by the professor who works for J.P. Morgan more than decades. For Me, J.P. Morgan is the TITLE of Financial Risk Management!!

  I know the latest trend is when people try to hedge their financial risks, they do use derivatives. Even Mr. Buffet had lost millions of dollars for his hedge. Face the music, credit derivatives is no one can price!! It means that no one really knows the price of those products these days. Just like in the 80's, no one knows some American options product really worths, especially in the day of non-liquidity and when European faces such a big trouble now. A lot of European banks once join the credit derivatives market have to keep a lot of U.S. dollars for the rainy days. So the problem seems to be the market timing of hedging instead of the complication of those credit derivatives. Because they are lack of liquidity now and no one knows the true price anymore in those days. How come J.P. Morgan does not stop those tradings in the dire moment, especially when YOU KNOW that YOUR ONCE COUNTERPARTIES WILL NOT JOIN THIS GAME RIGHT NOW?? It is a market without SUFFICIENT LIQUIDITY!! So the price is turbulent and uncertain!! 

  Everyone admits that even the sophisticated traders do not know the real worth of those products in these days, so it comes out to a question that how can they trade those products when they do not know their doing in the first place?? I guess it is time for Americans to think HARDER if those hedges are proper. Or if there will be some, standard and easy to have agreements for both traders, credit products in the market for those credit risks to be hedged one day?? I guess it is a hard question just as the CDS causes such a big loss for AIG in 2008. To be honest, I guess there is no one can have the answer even those Nobel prize winners in Physics or Economics. BUT....After all, J.P. Morgan Chase is a bank which receives a lot of banking savings from ordinary American people. Their savings should be PROTECTED instead of wasting on some strange hedgings!!