While Republicans continue to block financial reform
Posted in the Fitchburg Forum
#1 Jun 28, 2012
And bring Jamie Dimon in to basically give him a BJ instead of holding his feet to the fire...
"$9 billion gone. Will anyone care?
by David Atkins
Remember how the financial crisis was supposed to have taught the big money boys such a powerful lesson that they would never overleverage themselves again? Ahem:
Losses on JPMorgan Chase’s bungled trade could total as much as $9 billion, far exceeding earlier public estimates, according to people who have been briefed on the situation.
When Jamie Dimon, the bank’s chief executive, announced in May that the bank had lost $2 billion in a bet on credit derivatives, he estimated that losses could double within the next few quarters. But the red ink has been mounting in recent weeks, as the bank has been unwinding its positions, according to interviews with current and former traders and executives at the bank who asked not to be named because of investigations into the bank...
As JPMorgan has moved rapidly to unwind the position — its most volatile assets in particular — internal models at the bank have recently projected losses of as much as $9 billion. In April, the bank generated an internal report that showed that the losses, assuming worst-case conditions, could reach $8 billion to $9 billion, according to a person who reviewed the report...
More than profits are at stake. The growing fallout from the bank’s bad bet threatens to undercut the credibility of Mr. Dimon, who has been fighting major regulatory changes that could curtail the kind of risk-taking that led to the trading losses. The bank chief was considered a deft manager of risk after steering JPMorgan through the financial crisis in far better shape than its rivals.
“Essentially, JPMorgan has been operating a hedge fund with federal insured deposits within a bank,” said Mark Williams, a professor of finance at Boston University, who also served as a Federal Reserve bank examiner.
A spokesman for the bank declined to comment.
Of course, a bank using its deposits to fund risky speculation is exactly what Glass-Steagall, the Depression-era law preventing institutions with regular insured deposits from making speculative gambles, was designed to prevent. Just nine years after Glass-Steagall was eliminated, an unprecedented crisis was precipitated by banks taking insured deposits and investing them in collateralized debt obligations, supposedly insured with nearly infinite amounts of ultimately worthless credit default swaps. In the wake of the crisis JPMorgan, supposedly among the most responsible of the financial institutions, just lost $9 billion of supposedly safe assets on the Wall Street roulette wheel.
And yet there is still no serious legislative pressure to reinstate Glass-Steagall. It's as if none of this ever happened. In fact, we have a majority of representatives in the House who still claim that we need to reduce regulation of the financial sector.
Historians will look back one day and remark that we lived in a period of gargantuan corruption. It's just that regular Americans don't notice it because the customs official and police officer aren't asking for bribes as they do in less developed countries. But make no mistake: at the top of the chain, the American government is as corrupt as any banana republic."
9 BILLION loss with our backing!!!!!!!!!
#2 Jun 28, 2012
This happened under Obama's watch, clearly his fault.
#3 Jun 28, 2012
yes clearly, the failure of 100's of banks, all their CEO's, Congressional purchasing, Insider trading in Congress, the fact that it happened in 2007-2008, and countless other circumstances mean it is solely the fault of Obama!
Too bad it's simply not that easy, to say such a thing is ridiculous but, whatever, it seems to be the time come for Republicans to spew any insane ridiculousness out of their mouths and none of that matters.
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