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    “Unless you run a financial institution whose business model is built on cheating consumers, or making risky bets that could damage the whole economy, you have nothing to fear from Wall Street reform.” – President Obama, in his weekly address, calling for stricter reform after J.P. Morgan’s multi-billion dollar loss. – Political Wire

    (Source: underthemountainbunker.com)

    — 1 year ago with 4 notes
    #news  #politics  #president obama  #jp morgan  #wall street reform  #regulation 
    Sure, JP Morgan lost $3 billion but Romney says that’s “the way America works” →

    “I would not rush to pass new legislation or new regulation. This is, in the normal course of business, a large loss but certainly not one which is crippling or threatening to the institution. This was not a loss to the taxpayers of America; this was a loss to shareholders and owners of JPMorgan and that’s the way America works. The $2 billion JPMorgan lost, someone else gained.” – Mitt Romney, during a Wednesday interview with Hot Air blogger Ed Morrissey, discussing JPMorgan’s $3 billion loss (it’s no longer ‘just’ $2 billion)

    It’s too bad that Mitt Romney, as a presidential candidate, doesn’t know what he’s talking about. Further as Matt Taibbi asks, are these places still banks or are they now casinos?

    If you’re wondering why you should care if some idiot trader (who apparently has been making $100 million a year at Chase, a company that has been the recipient of at least $390 billion in emergency Fed loans) loses $2 billion for Jamie Dimon, here’s why: because J.P. Morgan Chase is a federally-insured depository institution that has been and will continue to be the recipient of massive amounts of public assistance. If the bank fails, someone will reach into your pocket to pay for the cleanup. So when they gamble like drunken sailors, it’s everyone’s problem.

    Activity like this is exactly what the Volcker rule, which effectively banned risky proprietary trading by federally insured institutions, was designed to prevent. It will be argued that this trade was a technically a hedge, and therefore exempt from the Volcker rule. …Hedge or no hedge, we don’t want big, federally-insured, too-big-to-fail banks making giant nuclear-powered derivatives bets.

    […] If J.P. Morgan Chase wants to act like a crazed cowboy hedge fund and make wild exacta bets on the derivatives market, they should be welcome to do so. But they shouldn’t get to do it with cheap cash from the Fed’s discount window, and they shouldn’t get to do it with money from the federally-insured bank accounts of teachers, firemen and other such real people. It’s a simple concept: you either get to be a bank, or you get to be a casino. But you can’t be both. If we don’t have rules to enforce that concept, we ought to get some.

    University of Maryland professor and former regulator Michael Greenberger argues that if Dodd-Frank had been in effect:

    As the trades lost value, margin would have been called for on a regular and systematic basis. (The losses would never have reached $ 2B without much earlier and corresponding regular calls for margin.) The losing nature of the trades would have been transparent to market observers and regulators for quite some time and the losses would not have piled up opaquely. It is almost certain that, at the very least, the Fed (not wanting to exacerbate its reputation for throwing taxpayer money at TBTF problems), would have backed JPM off these trades long ago.
    Continue reading…

    — 1 year ago with 2 notes
    #class war  #income redistribution  #news  #politics  #unemployment  #vote!  #war on the middle class  #$3 billion loss  #401ks  #casinos  #Dodd-Frank  #ed morrissey  #emergency fed loans  #federally insured  #hot air  #jamie dimon  #jp morgan  #jpmorgan  #Mitt Romney  #retirement funds  #volcker rule 

    Massachusetts Senate candidate Elizabeth Warren (D) is calling for JPMorgan CEO Jamie Dimon to resign from his position at the New York Federal Reserve Bank to acknowledge that he was in a position of trust after his company revealed that it had recently lost $2 billion as a result of bad bets on derivatives. “I’d like to see some real accountability here,” Warren told CBS host Charlie Rose on Monday. “I’d like to see Jamie Dimon, for example, resign from his position as a Class A director of the New York Federal Reserve Bank.” – Raw Story

    — 1 year ago with 1 note
    #news  #politics  #economy  #jp morgan  #elizabeth warren  #jamie dimon  #resignation 

    BREAK UP BIG BANKS: A message from Bernie Sanders – J.P. Morgan Chase revealed that its in-house trading operation lost $2 billion in the past six weeks. “The debacle at J.P. Morgan Chase reaffirms my view that the largest six banks in this country, including J.P. Morgan Chase, which have assets equivalent to two-thirds of our GDP, must be broken up. This is important in order to bring more competition into the financial marketplace and to prevent another ‘too-big-to-fail’ bailout,” Sen. Bernie Sanders said. “At a time when 23 million Americans are either unemployed or underemployed, huge financial institutions should not be involved in ‘making wagers or high-stake bets.’ They should be investing in the productive economy creating jobs and improving our standard of living.” —Crooks & Liars

    — 1 year ago
    #news  #politics  #jp morgan  #wall street reform  #bernie sanders  #dodd-frank 
    Obama Camp Ties Romney To JP Morgan Scandal – The Obama campaign is seizing on the news that financial giant JP Morgan lost billions of dollars trading derivatives with customer funds to attack Mitt Romney for wanting to repeal the 2010 law meant to curtail these kinds of risky bets. “Rolling back Wall Street reform, as Mitt Romney proposes, would be reckless,” says Obama camp spokeswoman Lis Smith in a statement to TPM. “The law promotes transparency, limits the types of risky investments that can be made with deposits insured by federal taxpayers, and prevents investment losses at one bank from threatening the whole financial system. Returning to the failed policy of letting Wall Street write their own rules would put all of us at greater risk of another financial crisis and leave us vulnerable to another taxpayer-funded bank bailout like the one shortly before President Obama took office.” – TPM

    Obama Camp Ties Romney To JP Morgan Scandal – The Obama campaign is seizing on the news that financial giant JP Morgan lost billions of dollars trading derivatives with customer funds to attack Mitt Romney for wanting to repeal the 2010 law meant to curtail these kinds of risky bets. “Rolling back Wall Street reform, as Mitt Romney proposes, would be reckless,” says Obama camp spokeswoman Lis Smith in a statement to TPM. “The law promotes transparency, limits the types of risky investments that can be made with deposits insured by federal taxpayers, and prevents investment losses at one bank from threatening the whole financial system. Returning to the failed policy of letting Wall Street write their own rules would put all of us at greater risk of another financial crisis and leave us vulnerable to another taxpayer-funded bank bailout like the one shortly before President Obama took office.” – TPM

    — 1 year ago with 1 note
    #news  #politics  #president obama  #mitt romney  #jp morgan  #wall street reform  #dodd-frank 
    Dimon On Whether JP Morgan’s $2 Billion Loss Proves Banks Are Still Too Risky: ‘I Don’t Think So’ – [JP Morgan Chase CEO Jamie] Dimon has been one of the biggest critics of the Volcker Rule, which is meant to prevent banks from making massive bets with federally insured dollars. […] Of course, the point isn’t whether JP Morgan, the biggest bank in the U.S., can survive a trade like this. It’s whether the financial system can sustain this sort of trading by all of the big banks, many of which are not in the same financial shape as JP Morgan. As the New York Times detailed yesterday, JP Morgan and the rest of the nation’s biggest banks have been fighting to widen exemptions to the Volcker Rule that would allow banks to continue making risky trades of this sort. ”I hope that the final [Volcker] rule will prevent this,” said Rep. Barney Frank (D-MA), whose name graces the Dodd-Frank financial reform bill, on ABC today. “The Volcker Rule is still being formulated.” — Think Progress
One Month Ago, Dimon Called Critics Of Big Bank Trading ‘Infantile’ And ‘Nonfactual’
RNC Chief: Leave Wall Street alone – Host David Gregory asked a straightforward question: “In light of the losses on Wall Street this week, you think we need less financial regulation rather than more?” In Preibus’ mind, it’s not even a close call: “I think we need less.” The RNC chief added that Democrats have “made things worse” by approving new safeguards and adding new layers of accountability to the financial system. It reminded me of an Upton Sinclair line: “It is difficult to get a man to understand something, when his salary depends upon his not understanding it.” — Steve Benen
Democratic Massachusetts Senate candidate Elizabeth Warren called for JPMorgan Chase CEO Jamie Dimon to resign his position as a director at the Federal Reserve Bank of New York. In a statement posted on her website, Warren said Dimon stepping down would “send a signal to the American people that Wall Street bankers get it and to show that they understand the need for responsibility and accountability.” – The Hill
JPMorgan Chase has been lobbying to make exactly the kind of trades that just lost the company billions of dollars. – Edward Wyatt in The New York Times
JPMorgan Chase’s loss proves the need for bank regulation. – Paul Krugman in The New York Times
More from Ezra Klein…
How Wall Street Killed Financial Reform – The fate of Dodd-Frank over the past two years is an object lesson in the government’s inability to institute even the simplest and most obvious reforms, especially if those reforms happen to clash with powerful financial interests. From the moment it was signed into law, lobbyists and lawyers have fought regulators over every line in the rulemaking process. Congressmen and presidents may be able to get a law passed once in a while – but they can no longer make sure it stays passed. You win the modern financial-regulation game by filing the most motions, attending the most hearings, giving the most money to the most politicians and, above all, by keeping at it, day after day, year after fiscal year, until stealing is legal again. “It’s like a scorched-earth policy,” says Michael Greenberger, a former regulator who was heavily involved with the drafting of Dodd-Frank. “It requires constant combat. And it never, ever ends.” That the banks have just about succeeded in strangling Dodd-Frank is probably not news to most Americans – it’s how they succeeded that’s the scary part. –  Matt Taibbi | Rolling Stone

    Dimon On Whether JP Morgan’s $2 Billion Loss Proves Banks Are Still Too Risky: ‘I Don’t Think So’ – [JP Morgan Chase CEO Jamie] Dimon has been one of the biggest critics of the Volcker Rule, which is meant to prevent banks from making massive bets with federally insured dollars. […] Of course, the point isn’t whether JP Morgan, the biggest bank in the U.S., can survive a trade like this. It’s whether the financial system can sustain this sort of trading by all of the big banks, many of which are not in the same financial shape as JP Morgan. As the New York Times detailed yesterday, JP Morgan and the rest of the nation’s biggest banks have been fighting to widen exemptions to the Volcker Rule that would allow banks to continue making risky trades of this sort. ”I hope that the final [Volcker] rule will prevent this,” said Rep. Barney Frank (D-MA), whose name graces the Dodd-Frank financial reform bill, on ABC today. “The Volcker Rule is still being formulated.” — Think Progress

    • RNC Chief: Leave Wall Street alone – Host David Gregory asked a straightforward question: “In light of the losses on Wall Street this week, you think we need less financial regulation rather than more?” In Preibus’ mind, it’s not even a close call: “I think we need less.” The RNC chief added that Democrats have “made things worse” by approving new safeguards and adding new layers of accountability to the financial system. It reminded me of an Upton Sinclair line: “It is difficult to get a man to understand something, when his salary depends upon his not understanding it.” — Steve Benen
    • Democratic Massachusetts Senate candidate Elizabeth Warren called for JPMorgan Chase CEO Jamie Dimon to resign his position as a director at the Federal Reserve Bank of New York. In a statement posted on her website, Warren said Dimon stepping down would “send a signal to the American people that Wall Street bankers get it and to show that they understand the need for responsibility and accountability.” – The Hill
    • JPMorgan Chase has been lobbying to make exactly the kind of trades that just lost the company billions of dollars. – Edward Wyatt in The New York Times
    • JPMorgan Chase’s loss proves the need for bank regulation.Paul Krugman in The New York Times
    • More from Ezra Klein
    • How Wall Street Killed Financial Reform – The fate of Dodd-Frank over the past two years is an object lesson in the government’s inability to institute even the simplest and most obvious reforms, especially if those reforms happen to clash with powerful financial interests. From the moment it was signed into law, lobbyists and lawyers have fought regulators over every line in the rulemaking process. Congressmen and presidents may be able to get a law passed once in a while – but they can no longer make sure it stays passed. You win the modern financial-regulation game by filing the most motions, attending the most hearings, giving the most money to the most politicians and, above all, by keeping at it, day after day, year after fiscal year, until stealing is legal again. “It’s like a scorched-earth policy,” says Michael Greenberger, a former regulator who was heavily involved with the drafting of Dodd-Frank. “It requires constant combat. And it never, ever ends.” That the banks have just about succeeded in strangling Dodd-Frank is probably not news to most Americans – it’s how they succeeded that’s the scary part. –  Matt Taibbi | Rolling Stone
    — 1 year ago with 30 notes
    #news  #politics  #jamie dimon  #jp morgan  #volcker rule  #dodd-frank bill  #elizabeth warren  #reince preibus