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Top Personal Finance Posts Of The Week – Big Fat J.P. Morgan Losses Edition

Posted May 13th, 2012 in Blog Carnival by Jeremy Waller

Last week JP Morgan Chase announced it was sitting on at least $2.3 billion in paper losses stemming from trading naked credit default swaps. These high risk derivatives are analogous to buying insurance on a house you don’t own – doesn’t make a whole lot of sense.

Initially credit default swaps (CDS) were introduced as a way to hedge against defaults on debt – bonds in particular. However, the practice of trading naked CDS (credit default swaps in which you do not have an interest in the underlying debt) became more and more popular.

JPMorgan Chase, one of the biggest financial institutions in the world, is now facing scrutiny for the huge losses it has amassed from trading these high-risk derivatives.

Top Posts of the Week

Roger the Amateur Financier @ The Amateur Financier writes Book Review – The Art of Non-Conformity – A review of the book The Art of Non-Conformity, which takes a look at ways to live your life that aren’t in line with the normal approach most people take.

MMD @ MyMoneyDesign writes What Did You Learn From Working as a Teenager? – Was your job as a teenager a complete waste of time, or did you learn some incredibly valuable life lessons that prepared you later on in life to be a better working professional? I present to you 17 lessons I learned from my early days of employment that I still carry with me today.

Maria @ The Money Principle writes Politics and economy in the Eurozone part 1 – The people have spoken in France and Greece. They do not like this austerity business one little bit. Can you blame them? After all it was not the people who caused the problem so why should they suffer while the banks get off scot-free?

TRL @ The Retired Landlord writes Different Places to Save a Down Payment – Find out the many different accounts or investment places that you can use to save a down payment for a rental property.

Teacher Man @ Young And Thrifty writes Choosing the Latest Investing Fad – Don’t you love the guys/gals that get their investment advice from the water cooler? You know the guys and gals that are constantly hopping on the bandwagon of whatever terrible investment advice that their co-workers heard on the radio on the way in this morning?

Echo @ Boomer & Echo writes Pitfalls Of Chasing The Highest Dividend Yield – Choosing a dividend stock involves a lot more than simply looking for the highest dividend yield. Here are some of the pitfalls to avoid:

Harry Campbell @ Your Personal Finance Pro writes Traveling on a Budget: A Review of My Vacation to Maui – I never realized the value of a vacation until I started working full time. You could even say I took my travels to Thailand, Hungary & Turkey for granted. My trips during college were an awesome experience that I would recommend to anyone at any age. But for working professionals, who get anywhere from 2-4 weeks off a year, vacation time becomes a precious commodity. I get two weeks a year but I think I would be a lot happier with four

Sean @ One Smart Dollar writes 8 High Paying Jobs Without a College Degree Needed – Not everyone has the means or want to go to college. Luckily for them there are still plenty of jobs that you can make over $100,000 while not having a college degree

Earth and Money @ Earth and Money writes How NOT to Make a Financial Decision – When it comes to making financial decisions, it is imperative that you have a clear and focused mind. Given how hard we work for our money, a poorly made financial decision can come back to haunt us many times over.

SB @ One Cent at a Time writes Top Risks for Investing in Oil and Natural Gas – Every investment opportunity has its share of risks. This article talks about the risks of investing in oil and natural gas sector, geared towards beginner investors.

Lance @ Money Life & More writes Rental Property – The Financial Side – There are many numbers that are important when making a decision on buying a rental property. The first one that we calculated was how much we would offer for the townhouse. It was listed at $73,500 which may not seem like a lot but would probably be about 5,000 under market value IF it was in great shape and ready to rent out. It wasn’t, so we definitely would not be offering anywhere near that amount.

J.P. @ Novel Investor writes Remember Your Investment Horizon – Fears in Europe, slowing economy, unemployment concerns, and a few hundred other data sets all contribute to the daily swings of the market. When the markets start acting crazy, remembering your investment horizon will bring everything back into perspective.

Other Carnivals And Mentions This Week

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4 Responses so far.

  1. Thanks for including me in this edition! I think time almost opportune to put some more money in stocks now, waiting for Dow to drop near 12k

  2. Thanks for including my article Jeremy! Always a pleasure to read through your carnival.

  3. Thanks for including me this week. Shame, shame, shame JP Morgan….

  4. Thanks for including me this week! I really appreciate it!

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