His first word of advice is to “un-love” money. The contributing factor to this fiasco was the love of money. Large financial institutions saw the option to make money not only from lending, but also from selling off the loans to investors for greater profits. Each time a get rich quick scheme fails, they move onto another. For JPMorgan Chase, the scheme that followed was the London Whale.
Hyman’s second word of advice is “look well into your investments.” When JPMorgan Chase chose to use excess money which typically would have been used for lending to invest in a hedge fund, they took a $6 billion loss. Some banks make money through credit default swaps, betting on companies to fail. Bruno Iksil, JPMorgan Chase trader, took the opposite side of the coin betting on an index of companies he felt were too strong to default. JPMorgan Chase owned numerous junk bonds that they countered with a hedge fund. In the end, Fannie and Freddie were a part of the index Iksil bet on to succeed. That was not the best gamble when the bank themselves were aware of the toxic securities that were part of the index. (Moore, 2012)
Hyman suggests this code allows him to give away thousands a year, and not through losses. Sean Hyman suggests there’s a three pronged analysis to the “Biblical Money Code.” The first prong is “Fundamental Analysis,” which is ensuring a company is stable. The second prong is “Technical Analysis,” which is to buy at the right time. The third prong in the triangle is “Sentiment Analysis,” which is to understand the true value of the stock. (NewsmaxTV, 2013) His orthodox view sounds an awful lot like common sense.
Had JPMorgan Chase used a little bit of common sense in their lending and investing, they wouldn’t currently be agreeing to settlements of $13 billion for the justice department, as well as possible $6 million settlement for investors. God Bless.
Moore, H. N. (2012, 05 11). JPMorgan Loss: The Explainer. Retrieved 10 23, 2013, from Marketplace: http://www.marketplace.org/topics/business/easy-street/jp-morgans-loss-explainer
NewsmaxTV (Director). (2013). Christian Investing With Sean Hyman's Biblical Money Code [Motion Picture].