Skip to main content

$2 billion, high-flyers, banks and the GOP

Yet again the finger is pointed at the loose practices - some would say bordering on illegal - of banks and their employees.   This time, it's JP Morgan, which has just "lost" $2 billion in trades which went wrong - and not because of some so-called rogue trader.    No less troubling is the fact that these behemoths in banking sail on regardless of the consequences and in America the GOP seeks to stop legislation which might curb banking excesses.  Katrina vanden Heuvel, editor of The Nation, writing an op-ed piece in The Washington Post, puts it all into context. 

"Consider $2 billion lost on a bad bet, plus billions more as investors dumped the stock, a providential warning. When Jamie Dimon, the imperious head of JPMorgan Chase, revealed that the bank had lost so muchon a derivatives trade gone bad, it was clear warning that, four years after blowing up the economy, the big banks are still playing with bombs.

This was no rogue trader. Dimon admitted to “many errors, sloppiness, bad judgment” in “poorly executed” derivative trades. Heads may role, but these were authorized trades by the bank’s leading — and notorious — trader, Bruno Iksil, the “London whale.”

Dimon, of course, has been Wall Street’s most vociferous critic of banking reforms, deploying an army of lawyers and lobbyists — at the cost of an estimated $7.4 million in 2010 — to try to delay, dilute and disembowel the Dodd-Frank legislation. The unrelenting legal and lobbying campaign has clearly intimidated the regulators, forcing delays beyond the dates mandated by the statute. Most recently, the bank lobby seemed on the verge of defenestrating the Volcker rule that would limit commercial banks from gambling with depositors’ money. That rule, itself a pale shadow of the Glass-Steagall Act repealed during the Clinton years, might have constrained the kind of opaque, risky bets that led to the losses.

Dimon, who was paid $23 million in 2011 (up 11 percent from the year before) has a personal stake in gutting reform. But it is inexcusable for Mitt Romney and Republicans to make repeal of all the Dodd-Frank reforms part of their campaign mantra. Banking is risky, by definition. Markets don’t self-correct. Unless banks are strictly regulated, panics and excesses are inevitable and big banks make them dangerous."

Comments

Popular posts from this blog

Reading the Chilcot Inquiry Report more closely

Most commentary on the Chilcot Inquiry Report of and associated with the Iraq War, has been "lifted" from the Executive Summary.   The Intercept has actually gone and dug into the Report, with these revelations : "THE CHILCOT REPORT, the U.K.’s official inquiry into its participation in the Iraq War, has finally been released after seven years of investigation. Its executive summary certainly makes former Prime Minister Tony Blair, who led the British push for war, look terrible. According to the report, Blair made statements about Iraq’s nonexistent chemical, biological, and nuclear programs based on “what Mr. Blair believed” rather than the intelligence he had been given. The U.K. went to war despite the fact that “diplomatic options had not been exhausted.” Blair was warned by British intelligence that terrorism would “increase in the event of war, reflecting intensified anti-US/anti-Western sentiment in the Muslim world, including among Muslim communities in the

An unpalatable truth!

Quinoa has for the last years been the "new" food on the block for foodies. Known for its health properties, foodies the world over have taken to it. Many restaurants have added it to their menu. But, as this piece " Can vegans stomach the unpalatable truth about quinoa? " from The Guardian so clearly details, the cost to Bolivians and Peruvians - from where quinoa hails - has been substantial. "Not long ago, quinoa was just an obscure Peruvian grain you could only buy in wholefood shops. We struggled to pronounce it (it's keen-wa, not qui-no-a), yet it was feted by food lovers as a novel addition to the familiar ranks of couscous and rice. Dieticians clucked over quinoa approvingly because it ticked the low-fat box and fitted in with government healthy eating advice to "base your meals on starchy foods". Adventurous eaters liked its slightly bitter taste and the little white curls that formed around the grains. Vegans embraced quinoa as

Climate change: Well-organised hoax?

There are still some - all too sadly people with a voice who are listened to - who assert that climate change is a hoax. Try telling that to the people of Colorado who recently experienced horrendous bushfires, or the people of Croatia suffering with endless days of temps of 40 degrees (and not much less than 30 at night time) some 8-10 degrees above the norm. Bill McKibben, take up the issue of whether climate change is a hoax, on The Daily Beast : Please don’t sweat the 2,132 new high temperature marks in June—remember, climate change is a hoax. The first to figure this out was Oklahoma Senator James Inhofe, who in fact called it “the greatest hoax ever perpetrated on the American people,” apparently topping even the staged moon landing. But others have been catching on. Speaker of the House John Boehner pointed out that the idea that carbon dioxide is “harmful to the environment is almost comical.” The always cautious Mitt Romney scoffed at any damage too: “Scientists will fig