http://www.cbsnews.com/video/watch/...=Feed:+CBSNewsVideo+(News+Video:+CBSNews.com) They deserve to be bankrupt, but the central bank and the politicians keep them in business while the rest of us subsidze their loses through inflation and debt. The system is indefensible.
At least Dimon didn't make excuses and just admitted stupidity. That's a little refreshing compared with the usual bs spin that we're usually fed. [I like the the commercial at the beginning - for Goldman Sachs - lol]
"We" deserve it too. We let Barney Frank and Sen Dood back up the Acorn pressure group that marched poor people into the Banks and threatened legal troubles and Attack Group tactics even though these people had been taught to lie about their incomes and assets. Obama was the legal arm ready to carry out the thrreats againstthe banks. Don't forget how we supported Clinton when he mandated that Banks did not need to check out the claims made by borrowers who claimed high incomes in order to get the mortgages they thought they could sell before the ARM loan came due. "We" have accepted these liberal soft hearted pleas about poor poor people who can't buy a home because of the evilankers. Look how you are promoting this same hate the bankers right here.
The monetary system is a monopoly that benefits big banks like JP Morgan at our expense. Their special privileges need to be revoked. No corporate welfare. They deserve to be out of business.
JP Morgans' $2 Billion Dollar and counting trading meltdown is symbolic of Romneys top campaign promise *Financial De-Regulation as Economic Freedom* JPMorgan's blunder amplifies calls for tighter regulation http://marketday.msnbc.msn.com/_new...r-amplifies-calls-for-tighter-regulation?lite Wall Street probably is wishing it never heard of the "Dimon Principle." Major banks hoping to thwart calls for tighter banking restrictions were dealt a blow by news that JPMorgan Chase lost $2 billion in a trading blunder that proponents of new rules say more stringent regulation would curtail. The spectacular trading meltdown came despite assurances from bankers that existing layers of regulations, internal safeguards and proper oversight are adequate to prevent such disasters. Those critical mechanisms failed to surface a sprawling series of bad bets that reverberated through the global financial markets. JPMorgan's shares were slammed Friday after Jamie Dimon, CEO of the largest bank in the U.S., said in a conference call late Thursday that his bank's trading losses resulted from a 'flawed' hedging strategy that was "poorly constructed, poorly reviewed, poorly executed, and poorly monitored." Dimon has been a vocal opponent of a regulation that would restrict certain types of risk-taking by banks, aka the Volcker rule, proposed in the aftermath of the financial crisis by former Federal Reserve Board Chairman Paul Volcker. This may not have violated the Volcker Rule, but it violates the Dimon Principle, Dimon said in the conference call. The losses apparently originated in the banks London-based Chief Investment Office, where a trader named Bruno Michael Iksil, nicknamed the 'London Whale,' reportedly accumulated a large holding of investments that hedge funds began betting against. The full scope of the financial meltdown is unknown. Unlike a loss on a single trade, JPMorgan is holding investments that could continue to shed value. Until the web of interconnected hedges is fully unwound, the $2 billion figure could rise, perhaps by $1 billion more this quarter or next, according to Dimon. Some analysts suggest that investors could line up on the other side of JPMorgans bad bets and widen the banks losses. The bank is well-positioned to sustain the loss. Before the news broke, analysts were estimating the company would earn more than $4 billion in the current quarter alone. At the end of last year, JPMorgan had more than $2 trillion worth of assets on its books, including $380 billion in cash. But the loss has already amplified calls for tighter regulation on risky banking, more than three years after a wave of losses from bad mortgage bets swamped the global financial system and brought about the worst recession since the 1930s. JPMorgans losses are the latest evidence that what banks call 'hedges' are often risky bets that so-called 'too big to fail' banks have no business making, said Sen. Carl Levin, D-Mich., chairman of the Senate Permanent Subcommittee on Investigations and an author of the Volcker Rule. The final version of the Volcker Rule, included in the sweeping 2009 package of bank regulations known as Dodd-Frank, has yet to be implemented. Last week, Dimon and leaders of other large banks met Federal Reserve Governor Daniel Tarullo in New York to argue against trading restrictions, which bankers have suggested would burden them with costs that will eventually have to be passed to customers. But on Friday, the co-author of the law, Rep. Barney Frank, D-Mass., noted that, at $2 billlion, JPMorgan's losses from risky hedging would amount to "five times the amount they claim financial regulation is costing them." "The argument that financial institutions do not need the new rules to help them avoid the irresponsible actions that led to the crisis of 2008 is at least $2 billion harder to make today," Frank said. The Securities and Exchange Commission said Friday it was looking into JPMorgan's $2 billion botch for potential civil violations, the New York Times reported, citing people briefed on the matter. JPMorgans multibillion-dollar losses were apparently self-inflicted by a sprawling web of interconnected investments designed to benefit from an improving U.S. economy, which would reduce the odds of defaults on corporate bonds. Those investments were described as synthetic credit because they were designed to mimic the performance of those bonds. Opponents of tougher regulations argue that tighter restrictions on this type of hedging would make it harder for companies to manage risk. That, in turn, would cause them to be more cautious, slowing economic growth and employment and making U.S. companies less competitive globally. Thats what these banks do; you cant regulate them away from taking risk without making banks go away, said Jeff Harte, a banking analyst at Sandler O'Neill. And if you make banks go away, were going to be bartering cows and eggs with our neighbors and the economy is going to be kind of destroyed. But proponents of tighter restrictions argue that allowing banks to make unrestricted bets simply concentrates risk in a just a few of large institutions. Weve got to have real controls and real regulation so this doesnt happen, said Jacob Zamansky, a New York securities lawyer. When I invest in JPMorgan, Im not assuming Im taking this kind of a risk. I think Im taking a modest risk and that the firm is under control. This shows that Dimon doesnt really know whats going on in the coal mine. After announcing the spectacular losses, Dimon conceded that the banks massive hedging failure adds weight to the argument in favor of tighter regulations. It plays into the hands of a bunch of pundits, but you have to deal with that and thats life, Dimon said in the conference call with analysts. The scope of the doomed trading scheme raised wider questions about whether the banks internal controls were adequate to prevent future disastrous bets that could cause wide financial and economic damage. "What concerns me is risk management, size, scope," said Dallas Federal Reserve Bank President Richard Fisher, who has called for the breakup of the top five U.S. banks. "At what point do you get to the point that you don't know what's going on underneath you? That's the point where you've got too big," he told a Texas Bankers Association meeting Friday. Bankers shouldnt appear on the front page of a newspaper, he added, unless it's for Rotary Club or other community work. Video Inside ~ Jamie Dimon, chairman and chief executive of JP Morgan Chase and Co, whose bank announced a massive trading loss of $2 billion, and counting, on Thursday.
Dodd/Frank was passed in 2009, why didn't it prevent this? If this is what Romney was talking about "deregulation" I'm for dumping poorly written, ineffective laws clogging up the books.
Because of this bad trade, the company is only reporting a $4 billion profit for the quarter. That must hurt.
There is no risk for them anymore. Worst case is they would get bailed out and Dimon would receive a nice golden parachute. Or heck get a job as the next Treasury Sec...
We should force them into bankruptcy so their inflated assets can be liquidated at market prices. Troubled homeowners would benefit from the renegotiated terms and prices.
It seems as though JP Morgan created either some form of toxic derivatives. Based upon the limited amount of information I have on this matter, they obviously chose the wrong underlying assets in questionable corporate bonds. So far, I can only narrow down the type of derivatives to options, although I could very well be wrong.
I would agree depending if there was a completely asset based form a bankruptcy. The viable options for corporate bankruptcy, chapter 7 and chapter 11 require massive layoffs.
Oh well. They can find new jobs, I'm sure of it. But the books have to be cleaned and the only way to do that is to let the market sort it out.
This thread invites Willard to comment on this meltdown in terms of his *deregulated financial freedom* campaign slogan ... he'll blame Obama for it while *not taking credit* for it as my hypothesis ... Oh, and laugh about it like everything else like his rooftop dog and beating-up on a gay man ...
Personally, I would create a new form of bankruptcy law specifically designed to deal with such predicaments that JP Morgan is going through. Like chapter 7, this new form of bankruptcy will require a trustee to sell off nonexempt assets to pay off creditors for losses. However, such "nonexempt" assets will be purely financial in nature. In addition, banks will not only be required to pay off creditors, but to deleverage the toxic assets that got them into trouble in the first place, and fully liquidate them to eliminate any future risk, counter-party or not, associated with them. From here, a corporation can resume operations if it has enough nonexempt assets still intact to do so. If not, the corporation will have to enter chapter 11 bankruptcy, and after doing so resume business.
And the economy is slowly improving. How many Wall Street men does Obama have in his cabinet right now?
Just remember folks, these are the guys that are so willing to invest YOUR money for a fee. They are so good at managing their own! Think about it....a bank that can't handle their own money.
I'd rather speak about the President responsible for de regulating then one who might. And that would be Clinton... But you wont go there....
Not only was Clinton responsible for deregulation in accordance with pro-crony capitalist Republicans, but every President since Jimmy Carter has forwarded deregulation policies, including Reagan.
