What if you lose $100,000 on ten separate occasions?
What if you lose $1,000,000 one day and make $2,000,000 the next? Or make $2,000,000 today and lose $1,000,000 tomorrow?
What if all your losing positions in one day add up to $1 million but your P&L for the day is up $1 million?
You eventually have another AIG event. One which cannot be staunched. Then AIG makes a claim against its counterparts and then that counterpart against its counterpart....and on and on. If it cannot be stopped everything unwinds. It is true that JPM may or may not be the counterparty to other demand of performance but if they are and cannot satisfy the counterparty claim they are screwed, their investors are screwed and the payor of last resort (the taxpayer) under the careful direction of Obama, Geitner, and the ben bernanke will print towards infinity....and with that the Republic will have failed. Right now it is a slow-motion trainwreck. If that accellerates with a dozen JPM-like events, at some point there are not enough fingers to put in the dike.