JPMorgan has lost at least $2 billion in deranged derivatives trades. Despite all the pretend reform by the government, nothing has changed on Wall Street and the feds are still asleep at the wheel, no doubt deliberately so.
Now we know the truth about Wall Street: It’s just kids playing with dynamite. Yesterday’s JP Morgan implosion has now put any lingering questions to rest. Wall Street banks simply cannot be trusted to manage the massive risks they are taking.
And our government continues to allow them to be reckless.
I’m thinking the real rats are in the executive suites as well as government regulatory agencies.
JPMorgan’s CEO, Jamie Dimon, said on a conference call late Thursday that there were “many errors,” “sloppiness” and “bad judgment.”
Regrettably Mr Dimon misses the point. Banks backed by government guarantees shouldn’t be involved in gambling. Period.
It’s always bad when real life reminds you of a movie with an ominous soundtrack. JPMorgan Chase Jamie Dimon’s conference call on Thursday afternoon apologizing for the bank’s “egregious mistakes” felt eerily similar to the 2011 movie Margin Call. At the start of that movie, a young analyst discovers that the bank has grossly underestimated its risk profile.
Could Jamie Dimon really be as clueless as he sounded on the phone yesterday?
Either Dimon misled the public about the gravity of the festering trades during his company’s first-quarter earnings call last month. Or he didn’t know what was happening inside the bowels of his own company. History tells us the latter is the norm for Wall Street bosses, though it’s hard to say which is worse.
It is always better to appear incompetent than culpable.
Deliberately Dimbulb Dimon also said that the losses could increase which almost certainly means they will.
Let’s review the facts. The TBTF banks were given hundreds of billions which they were supposed to use to rebuild the economy by loaning to busness. Instead they bought zero risk treasuries will government money or used the money to do insane speculation.
No lessons have been learned. The government is still complicit in this looting of the public for the benefit of the few. Instead of being Masters of the Universe, the TBTF banks are incompetent at core, backed up by a similar government, and both are corrupt and uncaring about the economy at large.