According to the following Comptroller of the Currency report (you can download it below), JPMorgan Chase has $91.7 trillion of total derivatives on $1.2 billion of equity, for a ratio of 416x.
Now, I’m no expert, but this sounds just a titty bit excessive. I don’t think I’m going out on a limb when I say we are well passed critical mass. At this point, it sounds like one of those mountains of sand Mark Buchanan talks about in his book Ubiquity: Why Catastrophes Happen.
Talk about the ultimate Butterfly Effect! This thing is primed and ready. I mean, if anyone even blinks in this Mexican standoff, let alone a major counterparty fails, it’s going to come down faster than Paris Hilton’s panties on a Saturday night. Shit, at this point, something as mundane as a mouse farting in the maid’s room at some hedge fund manager’s leafy estate in Greenwich, Connecticut could trigger the “event.”
You can download the entire report here. I haven’t even read through it all yet (and might not). I think I saw enough.