If you notice JP Morgan’s 2019 Interest Income , you will see that 12.8% of it came from Trading – assets of debt securities and 11.4% of it came from Trading assets – Investment securities. Together they contributed interest income of $20.4 billion, computed on a Tax-Equivalent basis (see our earlier post on how 1 + 1 is not equal 2).
So what is in a Trading Book?
Trading Assets / Trading Book.
As of end 2019, JP Morgan had trading assets of $411 billion and Investment Securities of $398 billion. For its trading book, on average $334 billion were debt securities, so JP Morgan is a big debt shop, with the remainder being mainly stocks. While the loans is overwhelmingly US based, the debt securities potion trading book is split $223 billion US based (66% US based) and $111 billion.
JP Morgan is definitely a debt-sweat-shop.
So before we go further, lets clarify something : Why this violence?