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Rewrite of Canadian Oil Royalty Agreements a National Disgrace and Surging JP Morgan Derivatives Book

Stock-Markets / Canadian Stock Market Oct 28, 2007 - 02:44 PM

As a Canadian, I would first like to voice my disgust with actions taken by my fellow countrymen [Alberta's Provincial Government] on Thursday – who saw fit to ‘rewrite' royalty agreements they had entered into with the oil industry.

A very sad day for Canada's honor and reputation.

As disgusting as all of this is, it still pales in comparison to an even bigger, much more preposterously glaring disgrace that I'd like to draw your attention to.

A little over a year ago I penned an article titled, Everyone Loves A Parade . The article chronicled the growth of J.P. Morgan derivatives book from Q4/05 to Q1/06 of 5.5 Trillion.

On Friday, the Office of the Comptroller of the Currency released their latest Qrtrly. Derivative Fact Sheet for Q2/07. In the latest reporting period [Q2/07], J.P. Morgan Chase's derivatives book has swelled by a cool 10 Trillion in notional:

[Source: table 2 on page 23 of pdf doc – Quarterly Derivatives Report]

In case any of you are wondering how big new growth of 10 Trillion in notional really is:

10,000,000,000,000 / 66 business days = 151 Billion per day [NEW BUS]

Can anyone tell me how or where it is possible to generate 151 Billion in new business per day – for 66 straight business days - in ANYTHING?

J.P. Morgan Chase is widely viewed to be the Federal Reserve's proxy institution in the marketplace.

Instead of a ticker-tape-parade, perhaps there should be a National Holiday named for this disingenuous feat – like, maybe a permanent bank holiday?

By Roger Conrad
KCI Communications

Copyright © 2007 Roger Conrad
Roger Conrad is regularly featured on television, radio and at investment seminars. He has been the editor of Utiliy Forecaster for 15 years and is also the editor of Canadian Edge and Utility & Income . In addition, he's associate editor of Personal Finance , where his regular beat is the Income Report. Uniquely qualified to provide advice on income-producing equity securities, he founded the newsletter, Utility Forecaster in 1989. Since then, it's become the nation's leading advisory on electric, natural gas, telecommunications, water and foreign utility stocks, bonds and preferred stocks.

KCI has assembled a team of top investment analysts to create the finest financial news service possible. With well-developed research skills and years of expertise in their particular fields, our analysts provide quality information that few others can match.

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