Blythe Masters Interview on CNBC

This sure sounds like 2007--only the interview took place in 2012.  Perhaps Blythe can explain the derivatives blow up in 2008, and JPMorgan's $6 billion "whale trade" loss last year.  JPMorgan is always "flat", eh?  Sure--so is the earth.

http://blythemasters.blogspot.com/2012/11/blythe-masters-interview-on-cnbc.html

CNBC: And you're looking at growth not only in agriculture and in metals and in oil, but across the board in all facets.  That's what you're investing in.  A lot of concern has been placed though about JPMorgan particularly its positions in the metals space.  And looking at your positions in silver, we talked earlier about the volatility in the silver market.  Can you talk about JPMorgan's positions and price volatility and how are they related?

Blythe Masters:  Yeah. that's a great question. And you're right, there's been a tremendous amount of speculation particularly in the blogosphere about this topic. I think the challenge is that that speculation represents a misunderstanding as to the nature of our business. As I mentioned earlier, our business is a client-driven business where we execute on behalf of clients to achieve their financial and risk management objectives.  The challenge is that commentators don't see all of that activity simultaneously.  So, just to give you a specific example, we store significant amounts of commodities -  for example, silver - on behalf of customers. We operate vaults in New York City, in Singapore and in London.  And often when customers have that metal stored in our facilities, they hedge it on a forward basis through JPMorgan who in turn hedges itself in the commodity markets. If you see only the hedges and our activity in the futures market, but you aren't aware of the underlying client position that we're hedging, then it would suggest inaccurately that we're running a large directional position. In fact that's not the case at all. We have offsetting positions. We have no stake in whether prices rise or decline. Rather we're running a flat, or a relatively match book.