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But that asset value could be wiped out in a nanosecond if some of those Tier III derivatives go to hell, the mortgage book continues to erode as do all the other leveraged credits on their balance sheet. JPM is making a Citadel/E*TRADE type bet, with the hope that the margin of safety is at least as large. The jury will be out for quite some time, but I wouldn’t say that the deal is a slam dunk.
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Information Arbitrage: I Bear-ly Knew You (via fred-wilson)
The evil side of me loves seeing this. All of the investment banks take incredible efforts on security in terms of IT, maintaining compliance, even going so far as having managers read all subortinates email. Meanwhile what takes them down is decisions that a high school senior could have made better.
