Subject: File No. S7-22-10
From: Doug Morgan

September 20, 2010

After reviewing JPM's 2008 10-K, it occurred to me that it was possible and would still be possible, under the new rules, for a firm to arbitrarily overweight resales as financing transactions and repurchases as "sells" and thereby still engage in artificial window dressing. Furthermore, it was not and still is not clear what criterion, if one exists, is used to distinguish between revenue and balance sheet transactions.

Here is how JPM divied it up for 2006 2007:
December 31, (in millions) 2007 2006
Securities purchased under resale agreements(a)
$ 169,305 $ 122,479
Securities borrowed 84,184 73,688
Securities sold under repurchase agreements(b)
$ 126,098 $ 143,253
Securities loaned 10,922 8,637

Resales as finance transactions: 49.7% 60.1%
Repurchases as finance transations: 7.9% 6.0%