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JPMorgan unit has $100 billion in risky bonds
By Sam Jones, Tracy Alloway, and Tom Braithwaite
Financial Times, London
Friday, May 18, 2012
The unit at the centre of JPMorgan Chase's $2 billion trading loss has built up positions totalling more than $100 billion in asset-backed securities and structured products -- the complex, risky bonds at the centre of the financial crisis in 2008.
These holdings are in addition to those in credit derivatives that led to the losses and have mired the bank in regulatory investigations and criticism.
The unit, the chief investment office (CIO), has been the biggest buyer of European mortgage-backed bonds and other complex debt securities such as collateralised loan obligations in all markets for three years, more than a dozen senior traders and credit experts have told the Financial Times.
The bank has said its derivative activities were intended primarily to help balance risks on its overall balance sheet, but the revelation that it has built up other large, risky positions is likely to raise further questions about the CIO's remit.
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Sona Discovers Potential High-Grade Gold Mineralization
at Blackdome in British Columbia -- 13.6g over 1.5 Meters
From a Company Press Release
November 22, 2011
VANCOUVER, British Columbia -- With its latest surface diamond drilling program at its 100-percent-owned, formerly producing Blackdome gold mine in southern British Columbia, Sona Resources Corp. has discovered a potentially high-grade gold-mineralized area, with one hole intersecting 13.6 grams of gold in 1.5 meters of core drilling.
"We intersected a promising new mineralized zone, and we feel optimistic about the assay results," says Sona's president and CEO, John P. Thompson. "We have undertaken an aggressive exploration program that has tested a number of target zones. Our discovery of this new gold-bearing structure is significant, and it represents a positive development for the company."
Sona aims to bring its permitted Blackdome mill back into production over the next year and a half, at a rate of 200 tonnes per day, with feed from the formerly producing Blackdome mine and the nearby Elizabeth gold deposit property. A positive preliminary economic assessment by Micon International Ltd., based on a gold price of $950 per ounce over eight years, has estimated a cash cost of $208 per tonne milled, or $686 per gold ounce recovered.
For the company's complete press release, please visit:
A spokesperson for JP Morgan declined to comment.
The CIO sprang into the spotlight with the revelation of more than $2 billion in losses on the complex derivative trades, a turn of events that has triggered a Department of Justice investigation and angered US lawmakers.
But the CIO has also dominated market activity and built up huge positions in other, equally esoteric markets, according to leading traders.
"I can't see how they could unwind these positions because no one can replace them in terms of size. It's a bit of the same problem they face with the derivatives trade," said a credit trader at a rival bank. "They pretty much are the market."
The unit made a deliberate move out of safer assets such as US Treasuries in 2009 in an effort to increase returns and diversify investments. The CIO's "non-vanilla" portfolio is now over $150 billion in size.
"Two years ago they kind of kicked off" renewed market activity in risky assets," said one banker who sells financial debt. "It was like they provided some kind of 'philanthropic' service to the market to encourage it to get going."
In November 2010, even the British Bankers' Association, a lobbying group, explicitly noted the scale of the CIO's activities in a warning on the fragility of the UK mortgage market.
The JPM CIO "has taken more than £13bn (or 45 per cent) of the total amount of UK RMBS" (residential mortgage backed securities) "that has been placed with investors since the market re-opened in October 2009," the BBA said.
The bank is planning to reduce its exposure to more complex products in the CIO and is likely to invest more of its $360bn in "excess deposits" in safer securities such as US Treasuries, according to people familiar with the matter -- a move that will be fraught with difficulties.
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Prophecy Platinum (TSXV: NKL) and Ursa Major Minerals
Sign Combination Agreement
Company Press Release
Friday, March 2, 2012
VANCOUVER, British Columbia, Canada -- Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) and Ursa Major Minerals Inc. have signed a binding letter of agreement for a business combination through a proposed all-share transaction. In doing so Prophecy and Ursa have acted at arm's length and the transaction has been negotiated at arm's length.
Prophecy will issue one common share in exchange for every 25 outstanding common shares of Ursa. Ursa options and warrants will be exchanged for options and warrants of Prophecy on an agreed schedule.
Prophecy's offer represents a value of about $0.15 per each common share of Ursa based on Prophecy's share price of $3.70 as at March 1, representing a premium of 130 percent to Ursa's March 1 closing price of $0.065.
Prophecy is to subscribe for $1 million common shares of Ursa by way of private placement financing at $0.06 per share, subject to regulatory approval. Upon placement completion, John Lee and Greg Hall, current Prophecy directors, will be appointed to Ursa's board.
Prophecy thus will become a mid-tier resource company with a robust and diversified pipeline of platinum nickel projects, including:
-- The fully permitted open-pit Shakespeare PGM-Ni-Cu mine close to Sudbury, Ontario, infrastructure with near-term production capabilities.
-- The flagship Wellgreen (Yukon) PGM-Ni-Cu project with more than 10 million ounces of Pt-Pd-Au inferred resource. Drilling is under way and a preliminary economic assessment study is pending.
-- Manitoba's Lynn Lake Ni-Cu project with more than 262 million pounds Ni and 138 million pounds Cu measured and indicated.
For the complete announcement, please visit Prophecy Platinum's Internet site here: