Home » Opinion » Bloomberg Hates the Big Gulp but Loves the London Whale.

Bloomberg Hates the Big Gulp but Loves the London Whale.

Bloomberg, JPMorgan CIO Swaps Pricing Said To Differ From Bank, here. This is one of the Bloomberg  stories reporting that the CIO used different CDS levels to mark the London Whale positions versus the Credit Desk’s positions. presumably in the same US Corp names. Level of surprise here is zero. Different trading desk almost certainly migrate to their own marks in cases where 1. there is no obvious market close mark used uniformly by everyone that covers the desk’s entire inventory or 2. the risk and valuation analytics used on the desk display idiosyncratic sensitivity behavior wrt the desk’s inventory that can be addressed or ameliorated by massaging the closing marks. Think about hedging corporate loans w CDS, Counterparty Risk Valuation, the Synthetic credit desk, and Flow CDS desk for example. The quant models are all different even though the exposure is to many of the same credit names.

Bloomberg, JPMorgan’s Iksil Said To Take Big Risks Long Before Loss, here. Bloomberg reporters run their story into the weeds.

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