A NATIONAL DISGRACE
by Rob Kirby
KirbyAnalytics.com
October 28, 2007

As a Canadian, I would first like to voice my disgust with actions taken by my fellow countrymen [Alberta’s Provincial Government] on Thursday – who saw fit to ‘rewrite’ royalty agreements they had entered into with the oil industry.

A very sad day for Canada’s honor and reputation.

As disgusting as all of this is, it still pales in comparison to an even bigger, much more preposterously glaring disgrace that I’d like to draw your attention to.

A little over a year ago I penned an article titled, Everyone Loves A Parade. The article chronicled the growth of J.P. Morgan derivatives book from Q4/05 to Q1/06 of 5.5 Trillion.

On Friday, the Office of the Comptroller of the Currency released their latest Qrtrly. Derivative Fact Sheet for Q2/07. In the latest reporting period [Q2/07], J.P. Morgan Chase’s derivatives book has swelled by a cool 10 Trillion in notional:

[Source: table 2 on page 23 of pdf doc – Quarterly Derivatives Report]

In case any of you are wondering how big new growth of 10 Trillion in notional really is:

10,000,000,000,000 / 66 business days = 151 Billion per day [NEW BUS]

Can anyone tell me how or where it is possible to generate 151 Billion in new business per day – for 66 straight business days - in ANYTHING?

J.P. Morgan Chase is widely viewed to be the Federal Reserve’s proxy institution in the marketplace.

Instead of a ticker-tape-parade, perhaps there should be a National Holiday named for this disingenuous feat – like, maybe a permanent bank holiday?

© 2007 Rob Kirby
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Rob Kirby
Kirby Analytics
Toronto, Ontario, Canada
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