JP Morgan Chase CEO forgotten past derivative transactions.

FDL:

In his testimony to the Financial Crisis Inquiry Commission, Jamie Dimon devoted a sentence or to two to the risks of derivatives, but said nothing about the past, only proposing to do something in the future. This suggests that he isn’t concerned about JPMorgan’s derivatives.

Here are some reasons for concern, and stories about people who didn’t worry enough.

Derivatives include futures, options, forwards, swaps and credit default swaps

At September 30, 2009, JPMorgan Chase was a party to $79.0 trillion in notional value of derivative contracts, against which it had total capital of $1.67 trillion.

Table 3 to 9/30/09 Report of Office of Comptroller of the Currency.

The OCC doesn’t address bankruptcy of counterparties, as in the case of Lehman Brothers.

JPMorgan has 75,000 derivative contracts with Lehman. Paragraph 3, page 2 of bankruptcy pleading viewable here, enter “Lehman Brothers Holding in the box for Debtor and 4325 in box for Docket #.