The London Whale Guy Would Like To Have A Few Hundred Thousand Words With Jamie Dimon
Bruno Iksil, the trader who rose to infamy as JPMorgan’s London Whale in 2012, has finally decided to
tell his whole story.
It’s not a simple tale. Nor is it a brief one. In fact – at more than
150,000 words spread across a half-dozen pdf documents uploaded to a
website called the
London Whale Marionette (first reported by
Financial News London)
– it’s longer than most novels. But if one overriding theme can be
gleaned from the rambling and minimally organized welter of information
Iksil has regurgitated into the web, it’s this: Jamie Dimon is a jerk.
But it takes a heroic expenditure of time and concentration to get to
that conclusion. Single-spaced paragraphs that go on for pages at a
time spell out a stream-of-consciousness narrative that is only loosely
chronological. As Iksil writes early on:
Many readers will find the text dense and at times
difficult to grasp. I apologize for that. What makes it difficult is not
the underlying trading and banking universe that is pictured in the
background. The real challenge is that this case is just a series of
smokes and mirrors.
He later apologizes that “my English is sometimes quite clumsy.” This
is true, but sometimes his diction sings. E.g., this sentence: “Who
could gobble such a gross bluff?” Really, who?
In his version of the London Whale story, Iksil was a patsy, or, in a
characteristic gallicism, a “marionette.” He was simply a tool for
higher-ups in JPMorgan’s Chief Investment Office, swallowing
his own misgivings to
wind and unwind massive and risky trades whose ostensible purpose was
to hedge the bank’s overall risk profile but in actuality functioned as
soon-to-be-verboten proprietary trades intended solely to make money.
When the music stopped, he was discarded.
This much can be reasonably inferred from previous overviews of the
London Whale imbroglio, including the 2013 Senate investigation and, to a
lesser degree, JPMorgan’s own, somewhat
exculpatory self-examination. But the full story hasn’t been understood yet, Iksil writes, thanks to a credulous press and lazy regulators:
Only a small fraction of the existing evidence on that
matter is available today for the public eye through the US Senate
report exhibits…. And this small fraction itself is sort of buried in
the middle of 2500 pages with no thread to guide the reader.
Apparently seeking to outdo the incomprehensibility of the Senate’s
muddled report, Iksil’s saga weaves together emails, court documents,
press clips and personal reflections into what is either a post-modern
literary masterpiece or a length demonstration of the importance of
having a good editor.
Anyway, the short version is this:
The “London Whale” is a genuine scandal. It appears to be a genuine manipulation
of the markets, a genuine manipulation of the bank accounts, and a
genuine manipulation of the media. It may be even worse than that if the
final outcome on the “London Whale” is the one that prevails today in
2017.
Contrary to public perception, the ill-fated maneuver that caused
such embarrassment for Dimon et al didn’t leave JPMorgan $6.2 billion in
the red, Iksil writes, but some $25 billion in the black. That’s
because the synthetic credit derivative shorts that the CIO had piled
into so heavily were balanced out by long positions in the investment
bank. The whole thing – minus the whole
losing-billions-on-a-single-position-and-paying-huge-fines part – had
been planned all the way back in 2010, Iksil writes. Taken as a whole,
the Whale days were actually a good time for JPMorgan:
The year 2012, far from being a catastrophe, was quite a
unique successful vintage for JpMorgan since 1999 and would still look
like the best one year on the record in 2017 when the tangible capital
generation is considered. One would then better understand why, back in
2012, the bank simply did NOT plan to unwind the position of the ‘CIO
hedge‘ in the markets…It was already positioned to make a profit on the
long planned “CIO tranche book” transfer to the IB and to hedge funds.
This sheds quite a different light upon the events that are described
through the media coverage part before. This implies for example that
the positions offsetting those of CIO were already present in the firm,
valued by the IB (the Investment Bank of JpMorgan), and this suggests
that the loss at CIO was not such a worry as far as the bank earnings
were concerned throughout the period covering Q1 and Q2 2012. One may
then rightly conclude that the losses at CIO were balanced everyday by
quite equivalent known gains somewhere else inside JpMorgan. Hence
nothing had been left to chance way before the rumor and the articles
got to press in April 2012.
This is just the 30,000-foot view. Iksil goes into lugubrious detail
about his own side of the story – the warnings he sent upper management,
the
browbeating
he received for those warnings, his sole and fleeting interaction with
Jamie (“ Iksil will reply that he is dealing day to day with the
‘nuclear wastes’ of the markets in credit”), his being told that “we
manage the optics for regulators here” at the CIO, his acute case of
“Burn Out” that took him out of commission during the worst of the
fiasco, his unsatisfying interactions with the regulatory state, etc –
but we’ll leave it to others to comb through for anything truly
revelatory.
The real
takeaway, I think, is this. Let’s assume that Iksil is right, that
JPMorgan promoted him into a fake position so that they could later lay
the blame for the CDS trading losses at his feet. The most important
criterion in selecting a good patsy isn’t just whether they’ll play
along at first, but whether you can count on them not to (a)
blow a whistle, nor (b) prove to be a real liability when everything
shakes out. That relies on believability and media savvy, among other
things. So go ahead and visit www.londonwhalemarionet.monsite-orange.fr and decide for yourself whether Iksil fits the bill.
Topics
Bruno Iksil,
Jamie Dimon,
London Whale,
post-modern literary masterpieces,
Who could gobble such a gross bluff
Source: https://dealbreaker.com/2017/06/the-london-whale-guy-would-like-to-have-a-few-hundred-thousand-words-with-jamie-dimon/
Revised on May 25th 2018 (initial version June 12th 2017)
This account of the “London Whale” case is based on 5 years of
continuous in-depth analysis. The study was based on the documents
available in the public domain. I have cross-referenced them with my
experience of the time. This is my story. It has not changed over the
years...
For those who are familiar with this scandal already, they should straightaway save time and read
Confidential Impunity.
This text displays the genuine story based upon my account as it was
done before the authorities.This is the story that Jp Morgan has always
known and still concealed.
For those who are not familiar with this quite interesting scandal, they should first read a useful
Preamble. They next should read quickly but carefully what is below and then turn to
official versions vs facts in order to grasp the lasting misleading representations that still appear on the public stage.
Next they should take some time to read
5 facts -5 realities- 3 dates
. That is really picturing what my role has been. This is going
straight in opposition to the media legend of the "London Whale".
Neither the bank nor any authority involved in the subsequent
investigations will make the effort to clarify what I show here. Yet as
one will see the evidence is already in the public domain since March
2013. Actually some of this evidence will be redacted later on (for that
purpose see
Exhibits amended US Senate report.pdf)
Some more documents below are here for the more curious readers...
- What is the purpose of this website?
The
“London Whale” case is a huge trading scandal that occurred at the CIO
of the US bank Jp Morgan in second quarter of 2012. It is not pictured
correctly by any public report so far.
There are topics that investors, employees, and the public in general should be aware of :
- The bank Jp Morgan had long ordered the controversial trades
that would cause the scandal in 2012. Whatever the loss that burdened
its CIO unit, irrespective of the “element of surprise” that the bank
may allege, the firm as a whole made much, much more money through the
event. The senior executives knew their actions were border line though
since 2010 at the latest. Some events in 2009 and early 2010 are
important clues to that: the VAR reports changed in September 2009, Bill
Winters was fired abruptly next, a “cushion/reserve” of $300 million
was ignored by CFO in December 2009, the book had to be “killed” on the
follow in January 2010, Dimon and Cavanagh came to visit CIO London but
not Iksil in early March 2010, new liquidity reserve rules were enacted
in late March 2010 but were next not enforced, Cavanagh the then CFO
suddenly changed cap in June 2010, the CFO of CIO left 4 months later
for undisclosed reasons in November 2010, right when Iksil got a
“chocolate medal” promotion. Regulators sent warning letters precisely
then….see not reliable
-
The senior executives chose indeed “Iksil” to work as a “screen” for
them in late 2010. It was a complete setup manufactured around RWA
projective but pointless modeled reductions and misleading risk reports
about stress test limits breaches. The executives promoted “Iksil”
without changing his role and responsibilities. They gave him quite
specific paradoxical orders despite his alerts all along 2011 and 2012.
They finally left his name being relentlessly placated through the media
starting on April 6th 2012 as things were just getting worse and worse
for them. (see2013 the morphing tales)
-
Some authorities have not performed their duty, far from it as the
public reports show for those who know the case in depth. The “screen
guy” complains against the UK regulator today, namely the FCA with good
reasons. It may not stop at the FCA…Please have a look at the Tab "One
regulator, One Bank, One Var" and read "VaR History" (see also 5 facts - 5 realities- 3 dates
and 2013 the morphing tales )
-
At the end of the day about $50 bln changed hands in the second quarter
2012 between a mass of investors and some “happy insiders”. Jp Morgan
made about $25 billion or more on the event for itself as its public
accounting reports show through the generation of what is called
“tangible capital” or “hard capital” (10-Q and 10-K reports filed with
the SEC). see Not reliable
-
One may summarize the trading scandal as: when the CIO of JP Morgan had
lost $1 billion dollar, Jp Morgan as a whole had made $4 billion for
itself net of its CIO loss. The Jp Morgan CIO lost in whole $6.3 billion
which led to an ultimate profit at Jp Morgan of more than $25 billion
in 2012. Please look at the next tab "One Regulator, One Bank, One VaR" in particular to the document "JP gains in 2012"
A full disclosure of the existing evidence should be made in the public.
click on "what is the purpose.pdf" for more details
(see official versions vs facts).
What is the “London Whale”?
The “London whale” is a trading scandal that occurred in
2012. It coupled with an accounting fraud, a massive market manipulation
and a unique media manipulation. One name came under the spotlights:
“Bruno Michel Iksil”. Who was he? What was he doing at Jp Morgan Bank? A
clear answer never was given yet 5 years on…Was he just a “marionette”
moved in the financial markets by the bank senior executives like a bait
on the hook? Who could gobble such a gross bluff? The extracts below
will show the ongoing confusion that has been entertained…. see the morphing tales and not reliable
Once upon a time, on the surface of things?......
click on "what is the London Whale.pdf" for more information
see also Var History andJPM gains in 2012
Some
regulators (also called financial markets watchdogs) and potentially
hundreds of millions of savers felt misled by Jp Morgan statements at
the time of events (the bank admitted it for part in September and
October 2013 paying overall a fine of about $1 bln and settling many
other pending litigations with the US government for $13 Bln more). Was
it such a big deal for Jp Morgan now that the CIO and its “tranche book”
were dismantled as planned since late 2010? No it was not a big deal
for Jp Morgan ultimately once the CIO was dead for good in July 2012.
Once they understood that the US bank had never been really endangered
by the well publicized losses, some investors felt rightly so that they
had been stolen some of their savings after they had felt compelled to
engage in panicky trades that they would not have done otherwise. Please
click on the next tab called "
One regulator, One Bank, One Var" next to this Tab... See also
5 facts- 5 realities- 3 dates
Source:
http://londonwhalemarionet.monsite-orange.fr/
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