**UPDATE: **A friend pointed out that this illustration is in fact a dishonest misrepresentation of the figures. If it really is from Bloomberg then I am shocked!

He noticed that the illustration uses the **diameter** of the circles to illustrate the relative market caps. In other words the height of each circle represents the market cap – not the area (size) of the circle.

This is a problem because we naturally compare the sizes (areas) of the circles. However, if you double the height of a circle you actually increase the area of the circle four times!

To see what I mean consider the graph below of the shrink in JP Morgan’s market cap. On the left is the original graph with **diameter **representing market cap. On the right is the correct graph showing market cap as **area.**

This shows clearly why the original graph is so shockingly bad. Could be a mistake, but I doubt it.

*I recently received this graphic view of the massive shrinks in the market caps of major global banks. The source is supposedly J.P. Morgan via Bloomberg, but I can’t vouch for its accuracy.*

*Click for a larger version.*