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The Future Of The Volcker Rule

Two billion dollars lost in a flash by JP Morgan. Is this an argument for the Volcker rule – cracking down on speculative bets by the banks?

People arrive at JPMorgan Chase headquarters in New York Monday, May 14, 2012. JPMorgan, the largest bank in the United States, is seeking to minimize the damage caused by a $2 billion trading loss, disclosed Thursday by CEO Jamie Dimon. (AP)

People arrive at JPMorgan Chase headquarters in New York Monday, May 14, 2012. JPMorgan, the largest bank in the United States, is seeking to minimize the damage caused by a $2 billion trading loss, disclosed Thursday by CEO Jamie Dimon. (AP)

Wall Street blew up in 2008, and it was clear to just about everybody that we needed a change.  Some boundaries.  A lot more transparency.  No more taxpayer bailouts for zillionaire bankers.  And what happened?  A whole lot of nothing.  A big bill, Dodd-Frank, was passed. 

And an army of Wall Street lobbyists went to work to strangle it in its cradle.  Last week, news that – whaddaya know! – JP Morgan Chase has lost billions with “egregious” bad bets.  The system’s still at risk. 

This hour, On Point:  Voldemort, the “London Whale”, JP Morgan Chase, and when will the U.S. fix its banking?

-Tom Ashbrook

Guests

Matt Taibbi, a contributing editor at Rolling Stone. His latest book is Griftopia: A Story of Bankers, Politicians, and the Most Audacious Power Grab in American History. His article on the JP Morgan loss is here.

Gregory Zuckerman, financial columnist and reporter at the Wall Street Journal. He’s the author of The Greatest Trade Ever: The Behind-the-Scenes Story of How John Paulson Defied Wall Street and Made Financial History. His take on the JP Morgan case is here.

C-Segment: Obama at Barnard

Check out President Obama at Barnard College. And the transcript here.

From Tom’s Reading List

Click here for an explanation of the Volcker Rule..

Rolling Stone “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.”

Reuters “This time around, the basis-trade disaster has happened at JP Morgan, where the famous London Whale seems to have contrived to lose $2 billion on what was meant to be a hedging operation. And once again, although the details are still very murky, the culprit seems to be the CDS-cash basis.”

Wall Street Journal “Even though the blunder won’t come close to breaking J.P. Morgan, Mr. Dimon deserves thanks for unwittingly reminding regulators of the need for clear playbooks to wind down failing financial behemoths without bringing the system down.”

New York Times “So there’s a large heap of poetic justice — and a major policy lesson — in JPMorgan’s shock announcement that it somehow managed to lose $2 billion in a failed bit of financial wheeling-dealing. “

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  • kafantaris

    The derivative hedging game played by JPMorgan Chase is no different than that played by AIG in 2008.
    Yet Jamie Dimon tells us that JPMorgan had merely “made a terrible, egregious mistake.”  He might as well have said that the bank was wrong to keep raising in a poker game when it was apparent it should have folded.
    And why was JPMorgan busy betting in the first place — right after our economic meltdown, and while fighting government regulation?
    One answer is that it knew it could bear the gambling losses.
    That’s right.  With $2 trillion at hand, JPMorgan can yawn when $3 billion goes down the tube.
    Nonetheless, Dimon tells us that he sees no problem with the government dismantling big failing banks.  This is good to know because the government might have to start dismantling big banks before they fail — and before they have another chance to take us down with them.
    The important lesson from the JPMorgan fiasco is not that stringent regulations are still needed to reign in on derivatives, but that banks big enough to remain standing after taking huge hits are ripe enough for us to chop down to size.

    • NewtonWhale

      As usual, our press has failed to adequately report the story.

      Most people think that JPM made and lost a $2billion bet. They didn’t.

      They made a $100billion bet, and the market moved against them by 2%. Their losses could reach $4billion.

      The point is, they gambled a lot more than most people realize:

      “Iksil apparently bet heavily on the US economic recovery, accumulating a derivative position of $100 billion that began to show losses as the US economy slowed. Iksil was not a “rogue” trader, but worked closely with supervisors to execute strategies that conformed to the bank’s risk management model, according to press reports. His managers “were happy to sign off on the trades,” according to press reports.

      The financial instrument used by Iksil was a CDS, or credit default swap, the same type of transaction that plunged the world economy into free fall in September 2008. Iksil was selling CDS contracts tied to a basket of companies.

      When the one-sided bet on US economic growth was first reported last month by Bloomberg News and theWall Street Journal, JP Morgan Chase executives dismissed suggestions that this represented an undue risk. CEO Jamie Dimon called the criticism “a complete tempest in a teapot.”

      http://www.greanvillepost.com/2012/05/13/jp-morgan-chase-hit-by-2-billion-derivatives-loss/

  • Iconoclast

    They should have nipped this nonsense in the bud a long time ago. If Romney gets in, greed will prevail over people’(s) need.

  • Joe

    The number of Americans on food stamps has increased by 14 million since Barack Obama became President

    http://theintelhub.com/2012/01/31/making-money-on-poverty-jp-morgan-makes-bigger-profits-when-the-number-of-americans-on-food-stamps-goes-up/

    That’s good news for JP Morgan Chase which issues food stamp debit cards in 26 states and D.C..

    So the more Americans who find themselves out of work due to Obama’s failed economic policies, the more money JP Morgan Chase earns.

    ‘Obamanomics’ has definitely been good for JP Morgan Chase.

    • MadMarkTheCodeWarrior

      You really mean failed republican lazy fairy economic policies which put the bus in the ditch in the first place don’t you?

    • NewtonWhale

      From 1970 until about a decade ago, average annual enrollment rose or fell roughly with economic conditions. The figure has declined only once since then, partly because policies adopted under President George W. Bush encouraged more eligible people to apply for aid, said David Armor, a professor emeritus of public policy at George Mason University in Fairfax, Virginia. 
      http://www.businessweek.com/news/2012-01-25/gingrich-calling-obama-food-stamp-president-draws-critics.html 

      Gingrich often cites the number of persons on food stamps to support his view that the U.S. is becoming an “entitlement society,” increasingly dependent on government aid. And he has a point. One out of seven Americans is currently getting food stamps.
      But Gingrich strains the facts when he accuses Obama of being responsible. The rise started long before Obama took office, and accelerated as the nation was plunging into the worst economic recession since the Great Depression.
      The economic downturn began in December 2007. In the 12 months before Obama was sworn in, 4.4 million were added to the rolls, triple the 1.4 million added in 2007.
      http://www.factcheck.org/2012/01/newts-faulty-food-stamp-claim/ 

    • TomK in Boston

      The job losses and use of food stamps were caused by the Bush crash, the Bush crash was caused by deregulating the financial sector. Voodoo econ has been very good to JPM.

  • observer
  • Yar

    Read the story of the first hedge fund here. Luke 16
    The Parable of the Shrewd Manager
    16 Jesus told his disciples: “There was a rich man whose manager was accused of wasting his possessions.2 So he called him in and asked him, ‘What is this I hear about you? Give an account of your management, because you cannot be manager any longer.’3 “The manager said to himself, ‘What shall I do now? My master is taking away my job. I’m not strong enough to dig, and I’m ashamed to beg— 4 I know what I’ll do so that, when I lose my job here, people will welcome me into their houses.’5 “So he called in each one of his master’s debtors. He asked the first, ‘How much do you owe my master?’6 “‘Nine hundred gallons[a] of olive oil,’ he replied.“The manager told him, ‘Take your bill, sit down quickly, and make it four hundred and fifty.’7 “Then he asked the second, ‘And how much do you owe?’“‘A thousand bushels[b] of wheat,’ he replied.“He told him, ‘Take your bill and make it eight hundred.’8 “The master commended the dishonest manager because he had acted shrewdly. For the people of this world are more shrewd in dealing with their own kind than are the people of the light. 9 I tell you, use worldly wealth to gain friends for yourselves, so that when it is gone, you will be welcomed into eternal dwellings.

  • Terry Tree Tree

    Anyone that would gamble the half of their mortgage money, that they HAVE, in hand, at a casino, or the race track, knows how ‘secure’ this ‘hedge’ was!
       Bring BACK Glass-Stegall, WITH the Volker-Rule!

    • 5pb5@queensu.ca

      Quick question, what are you hoping to achieve by reinstating Glass Stegal and implementing the Volvler Rule? Specifically, what features of them do you feel will benefit you in this case?

  • Terry Tree Tree

    MANAGEment, that can’t MANAGE, weren’t ment to manage!
       Using criminal methods to run a business, should NOT be rewarded, except with REAL jail time!

  • NewtonWhale

    There are three dirty little secrets that Romney and the banksters don’t want us to know:

    1) Supply side economics is a lie: always has been. Demand creates jobs, not supply.

    2) Capitalists aren’t job creators, they are job destroyers. Jobs are an expense: eliminating any that are not needed to meet demand is the first thing Romney & Bain did. (That’s because they understand 1).

    3) IBG-YBG: I’ll be gone, you’ll be gone”.

    “In recent years, there was no legal liability for extreme recklessness. Take a healthy company, roll the dice and if it comes up snake eyes, all you lose are your unvested stock options. Most management does not have significant capital at risk.The cost for pushing a healthy firm into insolvency by excessive risk-taking is some snickering at the golf course. In terms of lost monies, it is minimal.”

    In his book “The Accidental Investment Banker,” Jonathan Knee described this mercenary attitude with the phrase “IBGYBG.” As bankers signed off on increasingly risky deals, IBGYBG meant “I’ll be gone, you’ll be gone” by the time the really messy stuff hit the fan. Call it what you will – smash and grab, take the money and run. 

    http://www.washingtonpost.com/wp-dyn/content/article/2011/03/12/AR2011031204299_2.html

    • JustSayin

      My friends and I were discussing our own version of IBG-YBG, back before the crash started. It seemed to us  the parasites (Wall St. and politicians) having grown  both in number and size, decided that they would kill the host body (the US economy), and after that morph back into fat blow flies and seek other hosts…

      I believe there is a bill in congress with the intent to keep defense funding at a continuous high level in spite of the mandated cuts. And still… that’s over twice what the rest of the world combined pays for their defense.

      • Terry Tree Tree

        THEY can move to Switzerland, and Costa Rica, AFTER they destroy the U.S.?

        • JustSayin

          Bankers are like locusts.

          Wherever there is a working man without debt — they will be there.
          Wherever there is a successful small business — they will be there.
          Wherever there is a well fed child in a secure home — they will be there.

          They move where the money is. They gorge themselves on the resources and leave ruin and starvation in their wake.

          I believe that banking institutions are more dangerous to our liberties
          than standing armies. If the American people ever allow private banks to
          control the issue of their currency, first by inflation, then by
          deflation, the banks and corporations that will grow up around [the
          banks] will deprive the people of all property until their children
          wake-up homeless on the continent their fathers conquered. The issuing
          power should be taken from the banks and restored to the people, to whom
          it properly belongs.
          -Thomas Jefferson

        • Alan in NH

           I’ve had this theory, that I’ve had for several years now, that to the investment giants, the United States no longer exists, and what happens to it doesn’t matter. There are much more lucrative investments to be made elsewhere. The fickle finger of financial fate has moved on. Back to the 60-70 hour week at low wages for the rest of us. Get those lower east side tenements ready…we’re coming back.

    • NewtonWhale

      If we ever send another Pioneer spacecraft on a voyage outside the solar system, instead of Carl Sagan’s plaque we should include a video clip of Dancin’ Dave Gregory playing a Pip to Karl Rove’s Gladys Knight at the 2007 White House Correspondent’s dinner. It will save their scientists a lot of time figuring out just exactly how we destroyed ourselves.

      http://www.youtube.com/watch?v=KdvHwtRdg_I

  • http://www.richardsnotes.org Richard

    It’s one thing to make regulations and laws but what about enforcing them? What’s the difference between now and 2007-8? We have Dodd/Frank and the Volker rule but this stuff continues.

    If in fact the regulations are in place that should have prevented this investment, why weren’t they enforced? If they weren’t, then we’ve learned nothing since 2008.

    In a way (a small way) I agree with many Republicans who say we don’t need more laws, we need to enforce the laws we have. But, if we don’t have laws that regulate this kind of investment then we need to make them.

    • Terry Tree Tree

      NPR news this morning said that Volker Rule AND Dodd-Frank are NOT in effect, and won’t be for MONTHS.
          Too much money going to wealthy Congressmen?

      • http://www.richardsnotes.org Richard

        Terry, no doubt. But, if they were in effect what would that have done to curb this situation if they weren’t enforced? We also need to build up the enforcement side of regulations.

        The ratings agencies continue to rate this junk stuff as AAA yet no one has done a thing about it.

        I have to say, Obama has not led aggressively on this issue and backing down on appointing Elizabeth Warren to head the consumer protection side of this made me really mad. He may regret that if she’s elected to the Senate and goes against the grain of big money Senators on both sides of the aisle.

      • Adks12020

        They are not in effect yet because, like most other laws, they are being implemented in stages over time.  That was the only way to get them passed.  Unfortunately the strategy for the side that didn’t really want it passed usually uses that time to water down the provisions. The Volcker rule is supposed to be in effect starting in July.  Dodd-Frank is being implemented in chunks also, a few of which are also scheuduled for July.

        It similar to the healthcare bill that conservatives are trying to blame for a lot of problems but yet, the vast majority of the law’s provisions won’t be in effect until 2014.

  • Lichtenf

    Looking forward to this show. I love Matt Taibbi. He speaks for the people who get trampled over and over again by the new world of Amercan finance. He says what a majority of Americans are saying; he tells it like it is. NPR, you have my contriution.

  • Hidan

    “The Future Of The Volcker Rule”

    Watered down in the name of bi-partisanship

  • AC

    <–embarrassed :P
    I had to wiki the Volcker Rule -
    In any case, I benefited from this immensely as it showed me how stoopid i was to use credit cards at all. I paid them all off and have 0 balances on EVERYTHING now. 
    One card had 17. something interest rate & they were charging me 20 dollars a month interest on a minimum payment of 30something dollars. No more free money from me! Stinkers!! Now if only they'd stop calling me and letting me know i can purchase anything between Mon to Wed in some month interest free!! Woohoo. Not falling for that -
    I like all the changes. They better not go anywhere!!

    • Guest

      uh oh – something weird happened to this post – hope you guys can read that!!

    • JustSayin

        Excellent. Get everyone you know to do the same. You are now what the banks call a deadbeat, and so am I.

      Watch: Frontline history of the CC industry) http://www.pbs.org/wgbh/pages/frontline/shows/credit/

      But the Marquette decision should be overridden with a national usury law that caps interest rates to maybe 5% over prime, and no more.

      If we had a government by the people and for the people a national usury
      law would be in place right now, and the personal debt problems of this
      nation would be in massive decline.

      Banks making federal laws that force people into abject poverty… even back then they were controlling this nations laws for profit.

      • jefe68

        I agree, we need a usury law ASAP.
        It wont happen though.

        • Adks12020

          Most states in this country already have usury laws.  The problem is that there are so many exceptions to them that they are basically unenforceable.

  • JustSayin

    Are lobbyists in DC discussing (AKA bribing with cash), the congress to get taxpayer funding to cover the JP Morgan losses right now? 

    That would be a really safe bet. They will get very likely get it too, either publicly, or as part of a one line earmark in some obscure farm bill or food stamp bill with some euphemistic label like the save America’s farms, or Feeding America’s hungry.

    There is no difference between Wall St. greed and DC greed.

    • Terry Tree Tree

      That works GREAT, with ‘conservatives’, that claim the moral high-ground!

  • Still Here

    It kills me that you can’t get a practitioner on these shows, only journalists and one of them is from a music magazine.  You’re kidding.  Aren’t there any banks or derivative trading desks in Boston?  How about a regulator?  Or is this more about having loud and discredited people who don’t know what they’re talking about on.

    Plus, “lost in a flash,” really?  Do you have to lie to hype this show.  Maybe if you showed part of a woman’s breast you could get some attention for this show.  Oh, shoot, you’re using that for the next show.  Oh well back to misinformation.

    • Guest

      Maybe because the ‘journalist from a music magazine’ is the only one who’s pulled back the curtain on the layers of criminality and fraud that still go unpunished.

      The question you should be asking is: Why doesn’t the corporate media cover this more in-depth, naming names as to who the perpetrators are?  Why does is Congress beholden to the same criminal corporate interests? 

      • Still Here

        Please, tell me what the crime is, use specifics.

    • TFRX

      “Only journalists and one of them is from a music magazine.”

      What, a “music magazine” like Tiger Beat?

      RS has a history of good, incisive writing since the ’60s.

      You really are grasping at straws to discredit Taibbi.

      • Steve

        Wisconsin Public radio at the same time.
        Dunn does not have quite the breadth of Ashbrook but perhaps the guests may have a different take.

        - Mark Williams, Executive-in-Residence/Master Lecturer, Boston University School of Management and is a former Federal Reserve bank examiner.- Roger Lowenstein, Columnist, Bloomberg. Author, “The end of Wall Street,” and “When Genius Failed: The Rise and Fall of Long-Term Capital Management.”

        • TFRX

          I sorta remember reading “When Genius Failed”, (not during the crisis, but years before 2008), so in my estimation that makes that fellow worth my time. Thanks for the hint.

    • JGC

      I wonder if Harry Markopolis would have any wisdom to share, be being a person who is an expert in forensic accounting.  But I don’t have any problem with the journalists chosen to report on their findings.  Journalists are our first line of defense against excesses in government and enterprise.  Look at the Bain Capital executive that was on yesterday’s program. If he could string 20 words together that felt like an insight into the essential truth of the finance world, I don’t recall them. Banksters and their lobbyist minions are just there to obfuscate. (And confiscate.)

      • Still Here

        I’m all for Markopolis doing the forensic analysis, but in this case no one but Morgan knows what the positions are.  I think a market maker or participant would be able to provide some color to what the CIO was buying, what is trading down and therefore what Morgan might be exposed to.

        • JGC

          That sounds plausible, as a way of understanding the root of their interests.  Please see my comment way,way above, around 9:00 tonight, because I don’t understand what the banks’ arguments are concerning breaking up their positions. (Concerns shareholder value…)

    • Roy Mac

      You are a known troll.  Any reason for being such a dolt?

      • Still Here

        Please you’re some ignorant hack who adds nothing.

        • JGC

          Guys, guys… I feel like I am at Thanksgiving dinner with my extended Southern family…

  • Hidan

    JPM also makes a boatload of money off of Mass Forced Health Care Cigna Plans requiring Cigna Customers to create a health saving account than taking fees for “managing ” it than after 1000k JPM charges fees for investing that money into the stalk market. And this is backed by the state of Ma. Since Cigna is often the cheapest Health Care plan this will mostly effect the poor and middle class. It started at 2k to invest and reduced since.
    http://newsroom.cigna.com/article_display.cfm?article_id=481

    Now the likes of JPM will gamble with  your health .

  • Victor Vito

    Rolling Stone “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.”

    I’m very tempted to go to the easy analogy of bankers and the wealthy being like greased pigs.  Nearly impossible to grab and hold accountable.

    I think a better analogy is of an ultra slick and fast boxer in the mold of Muhammed Ali or Sugar Ray Robinson.  They pepper you with stinging punches, and when you try to counter they dance out of reach and make you look slow and foolish.  Ultimately their illusiveness makes you believe you can’t win and you give up.  At just that moment, they close the distance and come in for the KO. 

  • MadMarkTheCodeWarrior

    JPM is yet another example of fundamental problem with our economic system. American capitalism used to be characterized by Warren Buffett’s strategy: base long term investments on the fundamentals: sound investments will survive cyclic storms and pay off well in the end.

    Today’s crony capitalism is characterized by short term speculation (not investing).  Program trading and day traders created huge volatility in the market.

    How on God’s green earth can Republicans call themselves fiscally conservative when they call for less regulation and open the chicken coup door even wider for the foxes to sneak through?  They strive to expose our future to ever greater risks and losses.  How ironic that Republican economic policies promote the very “uncertainty in the market” that they demonize as the root of our economic malaise?

    How ironic, Warren Buffett, a Democrat, is the epitome of a fiscally conservative capitalist!!! … AND… he is lobbying for the wealthy to be asked to contribute more to America: he is asking that his tax burden be increased, not lessened…. the epitome of a patriot as well: he still believes in making long term investments in America itself and the American people!

    • JustSayin

      Maybe because today’s Republican has NOTHING in common with republicans of 40 years ago. …and the memory of that transformation is dying out, and soon the entire nation will only know the Republican party as supporters of pseudo-fascism and oligarchy.

      • MadMarkTheCodeWarrior

         Yes… those who don’t learn from the past are doomed to repeat it. The Reagan Mythology has been changing continuously since 1982 to the point where Reagan is revered, but the same man with any other name would be drummed out of the Republican party: Can you believe it, by today’s definition, their political god, Ronald Reagan, is not a true conservative!!!

    • TFRX

      Half the problem is that they don’t have to make the claim about “fiscal conservativeness” for themselves.

      Our liberal media simply awards the honorific, like how nobody needs to tell a BBC announcer to refer to the queen as “Her Royal Highness”. It’s merely understood.

    • Hillarion

      Good message. However, his last name is not “Buffet”.

      IIrc, that’s the name of a French maker of very good clarinets (Buffet-Crampon?)

      • MadMarkTheCodeWarrior

         Whoops. :^)

  • Michiganjf

    Republican Senator John Kyl says JP Morgan can will absolutely handle the problem which resulted in its 2 billion dollar loss internally, and banks “don’t need the ‘guvment’” interfering with business…

    …yes, obviously.

    The last several years have proven these boneheaded Republicans right about business needing only bailouts, handouts and subsidies, NOT “guvment” interference, RIGHT REPUBLICANS???!!!!!

    • TomK in Boston

      BTW there is no guarantee that the loss stops at $2bil.

  • Ezra Abrfams

    When B Frank and Sen Dodd passed their reform bill, they had two choices:
    a) simple, short, clear brightline rules (as advocated b many at the time, most notably in a full page op ed in the N Y Times)
    or
    b) Long, complex rules that would be decided in drawn out discussions between regulators and interested parties.
    Dodd frank is mostly (b)
    Those of us paying attention at the time said that the result would be that the banks, esp the TBTF banks were the only ones with resources to go , day after day, to argue with the regulators and the result would be, after public and media attention had passed, that the banks would get the regulators to do what the banks wanted

    waddya know, it has come to pass – we have learned that just prior to the loss, JPM people were in fact bending the regulators to their point of view

    Thanks Barney, your parting gift, toothless regulations

    • TomK in Boston

      How could there be a simple, strong bill with the GoP who’s theology is “regulation is bad” trying to kill it every step of the way and the corporate pols doing whatever bank lobbyists wanted? It’s a great tactic to make the bill a mess and then attack it for being a mess. That’s SOP for the GoP, they screw up gvt agencies and say the resulting poor performance proves that gvt can’t do anything right.

      I agree that BHO and BF should have fought harder, but getting any bill past the TeaOP is something. Question now is will even this weak bill be further weakened by the right.

      • TFRX

        I’d say “President Obama is captain of a ship with loose cannons”, but loose cannons sometimes discharge into the water, not straight down into one’s own hull.

  • PI Resident

    Did anyone notice that Elizabeth Warren called for Dimon’s removal from the Board/as a Governor  of the NY Federal Reserve?  Talk about the fox in the henhouse.

    And please do recall that Geithner was the Chairman of the NY Fed Reserve when the financial crisis first caught the public’s attention.  In my opinion Geithner’s friends at the Fed of NY have been and are well served by Geithner. . .

    Says You?

    • JustSayin

       That means both programs today are essentially the same. Large entities who want to be considered independent, but continue to suckle for a sense of security.

      Mr. Dimon  has proven himself as perfect for government appointment to banking issues.

  • Yar

      
    I would like to hear a discussion on why the concept of a year of Jubilee was introduced into banking.  There must be an economic rational that explains why loans were forgiven, I will believe the economic reasons before I will believe religious ones.  I believe it was intended to prevent cyclic revolution.    
    In thinking about banking and money, Facebook’s value is said in the 100 billion range.  What does this say about the value of 100 billion US dollars?  Another way to look at the JP Morgan’s loss: it is only 2 instagrams.  

    • Tina

      Yar being brilliant again!

  • TFRX

    If I contracted JP Morgan Chase to bring my cow to market, how many of magic beans would they skim off the top?

    • john in danvers

       One out of every fifteen, the cartel rate for IPOs. 

  • J__o__h__n

    What is with the recent uptick in censorship?  I’d like to decide for myself if a comment is stupid. 

  • feettothefire

    Let’s count how many comments are made today criticizing, yet again, the choice of guests. I’ve already seen one, posted at 7:46, two hours and fourteen minutes before the show even began.

  • TomK in Boston

    Of course we need strong regulation of the banks. It’s obvious. The red flag was the Bush crash, not  what just happened at JPM. If we weren’t in an insane period dominated by the extreme right and the corporate media, we would have had a FDR-like response to the Bush crash. The question is, what can be done with the far right pawns of the superrich holding so much power?

    As with most things, we don’t need a new system, we should start by restoring our old system that served us so well for so long and was washed away in the insane tide of ideological deregulation. Restore Glass-Stegall! Treat CDS like insurance so the seller is capable of paying off a loss. Stop bashing gvt and get the best “reformed” scam artists into gvt agencies, like when FDR put Joe Kennedy at the SEC.

    The banksters are calling the JPM loss a “hedge”. This is a joke. They are now going to call all their speculating hedging as there are exceptions for hedging in dodd-frank. If the loss was on a hedge, it would be offset by the gain on the instruments it was supposed to be hedging. No such gain has been discussed. JPM was just putting camo on gambling by calling ti a hedge, like the romney types call all their income capital gains to get the 15% rate.

  • Greyman

    “When will the US fix its banking?” When will the US fix its STATES? JPMorgan: $2 billion. California: $16 billion.

    • TomK in Boston

      Maybe when we start collecting taxes again?

      • Greyman

        Right: that’s immediately subsequent and consequent to cutting actual expenditures and rates of growth in existing expenditures and curbing and cutting anticipated outlays, the whole kit, the whole kaboodle. And yes: collectible taxes.

      • Hillarion

        Taxes are the membership fee in a civilized society. Considering the many instances of de-civilizing, one might conclude that we don’t value civilization.

        Many also want something for nothing, or for too little to support public services such as police, fire, etc.

        The latter are things the government does for the people that they can’t do for themselves.

  • Greyman

    In this environment Scott Walker would appear to be saving Wisconsin from the shameful fate of California, would he not?

    • TFRX

      Wisconsin wasn’t in crisis until Walker gave his cronies dump trucks and keys to the state treasury.

  • ana

    Let us not forget the role Scott Brown played in weakening the Volker Rule, the very part that would have prevented this latest loss, in return for his vote on the refom bill.

    • J__o__h__n

      But he drives a truck.

      • Tina

        And people fall for that!!!

  • Charles A. Bowsher

    We either need to bring back Glass Steagall or we need to let the Insurance Commissioners and Insurance Departments of the various states regulate these types of trades.  Pretty soon it would be obvious that there is no reason to allow this gambling to continue.

  • Michiganjf

    Tom,

       Please ask Matt Taibbi who he sees as PRIMARILY responsible for the repeal of Glass-Steagall.

    … I beleive Republican Phil Gramm is PRIMARILY to blame for spear-heading the effort and twisting arms to get it through a REPUBLICAN Congress, but Republicans fault Clinton because he was the President who signed it into law.

    Please clear this up ON AIR for Americans!

    • Guest

      Republicans created it and sold it:

      Senator Phil Gramm (R-TX) Rep Jim Leach (R-Iowa)Rep. Thomas J. Bliley, Jr. (R-Virginia)(FWIW Gramm’s wife Wendy Lee Gramm was on Enron’s board, so financial chicanery clearly runs in the family.)Blaming Clinton is laughable. 

      • Worried for the country(MA)

         Yup.  They forced his hand to sign the repeal.

        Also, Robert Rubin went down fighting the repeal too.

        Ooops.

        Any honest analysis will show the repeal of Glass-Steagall was a bipartisan debacle.

      • Tina

        But Clinton should not have signed!

      • Greyman

        Democrats who co-sold and co-created it: Clinton Treasury Secretary Robert Rubin, repeal advocate from 1995 onwards; Rep. Nancy Pelosi (D-CA) signed off for repeal as did many other Democrats in the US House.

      • Greyman

        Liberal conscience Paul Krugman served Enron briefly in an advisory capacity, I have heard, even got paid for it. Surely that association does not impugn his credentials?

  • john in danvers

    What I don’t get, in this contest of corporate Princes and representative Sovereign (the President), why it is that the President doesn’t recognize that the Sovereign is losing the contest.  The Princes continue to gain power.  And they’re aiming to elect on of their own to the Oval Office. 

    If there’s a true existential threat to the state, this is it. 

    • Tina

      John, You nailed it!  

  • http://pulse.yahoo.com/_Y6CO5C2HE4WM2OYGCDVWGPRXXM oldman

    We need strong regulation – for banks protected by FDIC and “too big to fail”. If JPMorgan wants to make risky unregulated investments, let them – but no government protections and required clear presentation of that to investors.

    The problem with the current system is the myth that you can run regulated and unregulated commerce in the same business and retain the same safety of a regulated business. Which is nonsense. Don’t straightjacket these businesses – but if they want to fly without a net, they fly without a net.

  • Julia

    ….and the bankers just go off and retire…to thier mansions and their yachts. Disgusting.

  • Michiganjf

    Matt is THE REAL DEAL!!!!

    Please have Matt Taibbi back as often as you can get him as guest!

  • Drew (GA)

    http://en.wikipedia.org/wiki/Gambling_in_the_United_States

    Someone needs to edit this Wiki so that it includes the most prevalent form of gambling.

  • janice

    The bankers just keep making more and more money and say ooops when they make a 2 BILLION dollar mistake – what is going on here?

    • Tina

      Is it all about interest rates, really?  Is the thing the bankers do this:  borrow money from the Fed at close to zero interest rates and then lend out that money for much higher rates?  If so, all they need, as has been said by the bankers themselves, are the high-speed computers who help with the computations and some staff to figure out which algorithms to use.  No overhead other than that.  The world is also a PHYSICAL place, our bodies are physical, yet these bankers think that their mode of operating can be seen as the paradigm for everything in the economy, and they see the economy as the paradigmatic aspect of all life, when in fact, it is not.  It IS a basic of life, but its form and parameters are NOT the model for all other aspects of life.  So, the Fed gives them access to cheap money and they change us an arm and a leg to borrow from them!  Could we borrow from the Fed, giving the Fed smaller interest rates directly, and giving it to them for the running of our government itself — without the middle men called the banks?  That’s a question — not a true proposal.  It’s a question that really asks HOW the bankers get access to our federal money so easily and then act imperiously.  I admit I’m wading in where I don’t have enough real understanding.  In the meantime, the banks main strategy seems to be that “money makes money”:  that is NOT a broad enough basis for an economy.  And, meanwhile, many pension plans, money markets, etc., are not allowing the individual investor to make any money from their money because interest rates are low.  Will that STILL be true for individuals if interest rates go up:  will there we inflation without increase in the funds that some individuals have in various “vehicles”?  

  • Terry Tree Tree

    CRIME PAYS!   BIG CRIME PAYS BIG!! 
       If they have caught a low-level employee making similiar, but less-money ‘mistakes’ like this, they fired them, I’ll bet!
       Probably sent them to jail, too
       Resign, or retire, if you’re big-time!

  • Terry Tree Tree

    It was such a SMALL loss, proportionately, that Jamie Diamon, and the other executives will pay it, from THEIR pay, BEFORE they get any pay?

  • Greyman

    Sorry to trash an American Public Media program on a National Public Media program, but: yesterday, 14 May 2012, APM’s “business show for the rest of us”, “Marketplace”, devoted not one single word to the $16 billion plight of the state of California (even though the University of Southern California is one of the show’s underwriters). Naturally, they led their show with JPM’s $2 billion outrage: but NOT ONE SINGLE WORD about the $16 billion hole in Sacramento’s pocket, at no moment of their half-hour program. If I were to emulate charity, I’d call this an oversight resulting from a distinct lack of editorial oversight. Some radio producers kept their eyes and ears closed if they missed covering that choice item yesterday. I mean: why is $16 billion smaller than $2 billion?

    • Guest

      Can you honestly not see the difference?

      • Greyman

        I see distinctions, yes, both quite germane. I also see scale and note that JPM is still performing profitably in spite of this enormous egregious loss. California’s hole is frankly much more distressing, they have not even begun to feel the effects there. 

    • John in Vermont

      California is a case study in the failure of “no new taxes” while continuing to spend. What no one talks about in the California case is the millstone the correctional system is.  The state has more people per capita in the custody of the commissioner than any other state.  But neither the law and order right nor the left wants to look at this – instead they close libraries.

    • Tina

      NPR has been talking about it many times today.  Perhaps they were gathering FACTS first to guarantee proper reporting.

  • Robin in Vermont

    So, if a person doesn’t want to enable this kind of behavior by the banks, and doesn’t want to fund the ridiculous salaries that these folks receive, what can one do with one’s money? Is there ANYWHERE we can put our retirement savings that won’t help these people?? 

    • Drew (GA)

      “Is there ANYWHERE we can put our retirement savings that won’t help these people??”

      No.

    • AC

      bury it in a box in the backyard!!

      • Drew (GA)

        That was my first thought but then there’s Imminent Domain.

        • TFRX

          Do you mean “eminent domain”? Because if not, “imminent” is a pretty apt description also.

          • Drew (GA)

            Eminent in Legislation, Imminent in practice. Just seems a better fit to me.

  • charles

    On a sarcastic note when looking at todays topic versus Bain Capital’s Ed Conrad yesterday. 

    So what is it risk taking by the 1% of the capitalists or speculative gambling.  Legitimate risk taking by someone working to build their own business is one thing… money mongers risking millions or billions of money that isn’t even theirs is speculative gambling. 

    • Worried for the country(MA)

       The unions, public pension funds and charitable foundations would disagree with you that the investments made by Bain and other funds aren’t ‘legitimate’.

      It also sounds like you don’t understand the private equity and venture capital business and their importance to the overall economy.

  • Charles A. Bowsher

    Insurance regulators use techniques called Rehabilitation or Liquidation for companies that get in trouble.  They are orderly and as fair as possible.  Guess who picks up the tab for losses?  The insurance industry itself.  I have to say the states really do do it better in this case.

  • Irene Moore

    The same ethos operates in bookmaking.  Here’s the thing:  There’s the game, 0-sum, the ref makes the calls – football, basketball, the ump in baseball.  You’re IN, Your’re OUT.  The point is that the referee makes the call.  The people betting on the market need a ref just like all game players – You’re IN, You’re OUT.  Anybody who says THE WALL STREET GAME does not need a ref is nothing more than a bully or a snake oil salesman.

  • John in Vermont

    Put your short-term (cash available) savings in credit unions and CD’s at credit unions. Put your retirement savings into socially responsible mutual funds.  These funds shy away from banks and hold stocks in companies with good business practices.

  • Charles A. Bowsher

    As a Lexingtonian I want to apologize for the caller.  He does not represent our wonderfully diverse and incredible hometown.

  • JustSayin

    The mythology is believing that this financial crisis is over. It is just the beginning, and until these entities are regulated, the crisis will be without end.

    The end comes when, either the thieves will be regulated or they will run out of money to pillage.

  • BHA in Vermont

     So Ina Drew “resigned”. Actually retired. And she will reportedly receive $14.65 million to part ways with the company.

    Not a bad deal. She got paid $15M last year, $10M the prior year. Now she screws up big time and gets another $15M to ‘quit’ plus whatever she made the first 4 months of this year.

    Too big to fail is too big. Break up all the “institutions” that would need govt bailouts if they fail. And no parachutes for the execs of the companies.

    http://www.webpronews.com/ina-drew-set-to-retire-from-jpmorgan-chase-twitter-reacts-2012-05

  • http://gregorycamp.wordpress.com/ Greg Camp

     Let’s have a rule:  If you will take down only yourself, there will be no regulation.  If you will hurt only those immediately around you, you’ll get a little regulation.  If you’ll take out major portions of the country, you’ll have to work within a set of tight rules that the rest of us agree to.

  • Anne in VT

    It’s not a surprise that Jamie Dimon has been all over the news in the last several days.  I’m sure he’s pretty concerned that he and the other Banksters will have to spend even more $$$ to buy off Congress and the regulators to avoid the implementation of any real financial regulatory control.

  • marym

    YES!! YES!! By all means put Glass Steigal back in- & stop an end to this nonsense, unless we can set it up so that if they fall, they fall by themselves.. and not bring the whole system down.!!

  • Greyman

    $16 billion is now construed by our public media outlets as LESS than $2 billion? (Forty-two minutes past the hour and not the first citation of any $16 billion sum in California, but perhaps it is off point.) This computation arguably constitutes a numerational anomaly on the scale of the OPERA anomaly’s superluminal neutrinos. All these anomalies are just breaking out all the time of late.

    • Guest

      Is someone paying you to try to steer the discussion off-topic?  As others have pointed out repeatedly, the way for CA to budget its balance is simple and doable.  Public finance is much more transparent. 

      • Greyman

        (Whyever would you think I’m being paid?) JPM’s egregious loss was also somewhat characteristically much more abrupt, California’s depths have only been getting progressively more cavernous for a decade. And again: JPM looks to be equipped to recover much more deftly than California is about to, or do you disagree?

        • Guest

          Because your points are completely off- topic, seem ideologically rooted, and your constant reiteration strikes me as Rove-ian and mercenary. 

          Rightwing disinformation plants on web discussions is nothing new. Repeating the same facile mantras about how evil the government is isn’t working though; the public is wising up.  

          It’s fun to watch Romney fumble his way through the same old playbook though. 

          • Greyman

            Public sector losses are every bit the issue. The $16 billion hole in California is every bit as much a public concern as a $2 billion in any FDIC-credentialed bank. When government only shows its ability to live beyond it tax collection rates, its ambitions have vastly exceeded its actual reach. Government shows little sign of shortening its own arms, or NPR/PRI/APM/CPB would already have been completely severed from the Federal budget.

    • jimino

       And what about all the sex on TV!  Why isn’t anyone talking about that?

      • Greyman

        A “domino effect in discourse” is already in play in the NPR/PRI/APM/CPB universe of public broadcasting: public radio constitutes Federal subsidization of US journalism, public radio returns the favor by promoting (private) Hollywood film and (private) broadcast and cable fare, even (private) bookselling and publishing, even other (private) businesses and service providers. The corporate sponsorship is arguably more solidly built into the structure of public broadcasting now than even its modest (though perversely continuing) Federal subsidization. I remain struck at public broadcasting’s prowess for telling only 100% of the truth for no more than 50% of the stories, however: e.g., informing the public of Eurozone “austerity austerity austerity” under unchallenged premises of massive (non-existing, per OECD data)budgetcutting without mentioning overmuch that the onset of onerous taxation to support overextended, insolvent states is driving political unrest. Or treating a $16 billion case of US state insolvency (viz., California) as profoundly less dire than a superbank’s glib prodigality with $2 billion it well stands to recoup in succeeding quarters, now that reality has slapped it resolutely in the face. Editorial proportion for public broadcasting, I submit, consists in no small measure of regularly telling more than a single story. (Me myself and I, do not watch television at all whatsoever, no antenna no cable no satellite not interested.)

  • SteveV

    The public, which has the attention span of a young puppy, will pay little attention to this UNTIL it falls apart and hits them directly in the pocketbook. If it doesn’t fall apart, nothing will ever change. A REAL crisis is what leads to change.

  • Julia

    what a bunch of whining. The task is too difficult? Have we become a nation of lazy bones?!

    • Drew (GA)

      If you have to ask…

  • AC

    this analogy to gambling makes me smile – my husband was fooling around with investments & i told him unless he sits on the board of a company, really knows what’s going on and how decisions are made – it’s GAMBLING!

    • Drew (GA)

      Even if he sits on the board of a company, really knows what’s going on and how decisions are made -It’s still Gambling.

  • AndyF

    Generally speaking, the American people have NO clue about what is coming and the JP Morgan failure is just the harbinger of a financial collapse that will make the recent mortgage mess look small.  Brooksley Born warned us about this years ago – the derivatives market is what makes the mortgage mess look in fact, miniscule and when you hear JP Morgan say “2 Billion” dollar mistake – even that is a lie.  Its more like 20 Billion, and that is just the tip of a massive iceberg.

    The problem with On Point and most other “talking head” forums is that they are WAY behind the curve on a problem that has been festering for years, many years.  As well, these forums simply do not understand the Banker mindset.  Bankers may be greedy and evil, but at the bottom line, they are grand risk takers who dont think about anything beyond their own revenue and of course, bonuses.

    This is the SAME short-term thinking that has given our country so many problems.  The Republican party underscores this fact quite well – as though they could eliminate the Gay movement simply by foisting their opinion, or they could stop terrorism by spreading the ointment of Democracy in places like Iraq and Afghanistan.  We know these ideas dont work, and worse, we dont learn the lesson so we just keep repeating the same old, tired, well-worn mistakes.

    Although I doubt they could do it – if On Point could get Jamie Dimon and/or Lloyd Blankfeld as a guest and people would finally hear from the ‘Chiefs’ of banking, I think they would faint realizing these guys have the same mindset that threw this country into Depression in the 20′s.

    The point?  We’ve learned nothing, we will never learn anything, and then we will feign shock while we switch on the TV to “escape” to the dumbing down of “Survivor” or “Dancing with the Stars”.  In other words, we have chosen to be idiots and we exercise that choice over and over again every day.

    So – who is the fool?  The Fool?  …Or the fools who ignore getting to the truth and choose to trust the fool?

    • SteveV

      Perfectly said. Thank you.

  • Mbheitz

    Reinstate Glass Steagal regardless! Enough is enough!

  • Terry_sinha

    Can you envision any means of organizing the general electorate to pressure Congress to protect our economy by reenacting the Glass-Steagall Act?

  • Erin in Iowa

    The problem is that these banks are subsidized not once but THREE TIMES!  Once when they’re given loans from the Fed, once when they lose that money, and again when all the saps with 401Ks eat that loss because their trades don’t count until the closing bell.

  • Hillarion

    $Billions can look like “chump change”. Google on two words: quadrillion, and derivatives. Very interesting.

  • http://pulse.yahoo.com/_C2STBLZJK4VKQBV27DVQX3I6CU FAX68

    Future of the banking system of America?

    The banks will continue to gamble with notorious Derivatives.
    401k are again in jeapordy just to feed the greed of wall street.

    • Tina

      AND, Wall Street thinks their “greed” is “innovation”!!!  Yikes and Yuk!!

  • marym

    Break up those companies.. That’s part of the problem!

  • http://gregorycamp.wordpress.com/ Greg Camp

    Here’s another rule:  Any company that ends up needing a government bailout will be publicly administered.  The purpose of the company from then on will be to make life good for the lowest rank of employees first and to benefit the public at large next.

    That would encourage corporate executives to be smarter about the risks that they take.

    • jefe68

      That’s what Larry Summers wanted to happen but Mr. Geithner won that argument. Mr. Summers wanted to break up the large banks and investment houses and have all the CEO’s replaced. 

  • Tvfxheyman

    Tom in RI:
    Please do not continue to tell your listeners that 2008 is the same as when Roosvelt was elected  in 1932 and what he accomplished. First he had an overwhelming majority in the Senate and the House. Obama had only  60 votes in the Senate and many of those were blue dog democrats like Nelson, Bauchus and Landrieux  . Thus from the outset there was no way he could push through the reforms that roosvely pushe through a senate and house that had already lived through a hoover administration that did nothing for four years of depression not recession. The recession arrived as obama was being elected.

    Please clean up your misleading histroy and that of your guests. I am tired of hearing Obama could have done more given the divided legislature he had led by McConnell who vowed not to work with him.

    • William

      But Obama took huge amounts of money from Wall Street, his financial advisors were Goldman Sachs vets…so the perception is he really did not do much because his special interest donors did not want much done.

      • Terry Tree Tree

        WHICH President, Congressman, Senator, Governor, HAS NOT taken money from BIG MONEY ‘interests’? 
            ‘W’s admin. was almost ALL BIG MONEY from BIG OIL, and BANKS!
           Some get BIG MONEY, from BIG, corrupt CHURCHES!  Does THAT make it ‘right’?

        • William

          Ah yes, but we never read much about the huge sums of Wall Street money Obama sucked up do we?

      • Bruce

        I heard Scott Brown traded his pick-up truck for a semi.  He needed something bigger to haul all the cash that he & his buds in the TeaOP are receiving from the investment bank, hedge-fund & private- equity managers in order to preserve the status quo at any cost by shredding as many provisions of Dodd-Frank as possible or delaying their implementation.

        The upcoming election in MA pitting Brown against Elizabeth Warren reflects the forces aligned against meanigful financial reform in the Gen. Election.  Not surprisingly, the last time I checked, donations from the securities industry to the Romney campaign more than triple the amount received to date by Obama.

        In the post-Citizens United era, it will be interesting to see if ordinary citizens & people power can overcome the huge advantage that the Scott Browns, Scott Walkers & Mitt Romneys of the world enjoy in our current system of electoral politics.     

        • William

          You forgot Bill Clinton who now a multi-millionare.

    • Tina

      But, Tom, if you got to see the Frontline that aired about two weeks ago (2 hours each night over 2 nights):  Obama DID have the opportunity to put in some hard requirements onto the banks, but he went with Geitner’s POV, and didn’t.  It believe it was Larry Summers who was also on the team who had a different POV and wanted various requirements put onto the banks, but Obama yielded to Wall Street attached Geitner.  The Frontline set of shows says it so much better than I can: maybe it’s still available on line.  Thanks.

    • ana

      The death of Ted Kennedy and election of Scott Brown to replace gave the Senate 60 for only four months.  Then, the blue Dogs and  Lieberman.

  • Tncanoeguy

    So the Tea Party desire to get rid of any and all regulations will lead to more financial funny business and the people getting the shaft.  Don’t the Tea Party folks realize that big business can be as tyrannical as big government?  

    • Alan in NH

      more so…if allowed. They have no constitution. We theoretically have protections from government. There is a written document. Where are the protections from big business?

  • http://pulse.yahoo.com/_C2STBLZJK4VKQBV27DVQX3I6CU FAX68

    I cannot even get a loan to pay off my other loans and combine those debts in one monthly payments.

    We Bail You Out!!!!

  • sjwa

    Matt is best finance writer in USA> He should be new Sect of the Treasury. Break up these oligarth big banks, stop giving thme free money from the fed, reinstate glass stengal law that worked, and stop bailing them out!

  • BHA in Vermont

    Do the JP Morgan shareholders recognize that the “little” $2B loss takes money away from THEM?

    After all, the purpose of the banks is to return a profit to the shareholders, after paying exorbitant and undeserved compensation to the exec of course.  

    I bet Diamond is mostly unhappy that the value of HIS shares have dropped because of the egregious actions of the bank. Probably cost him millions and millions.

  • SocialHeresy

    The current problem with our government is that these laws and regulations our handled by people in government who have no idea how they work. The same as with internet regulations, if you are not aware of how something functions, how can you regulate/fix it. Something needs to be done in this area in order to move forward into an actual resolution.

  • guest

    Separate from a lot of concerns and issues, I’m wondering who is on the other side of the $2b+ loss?  Are there winners and who are they?

  • http://gregorycamp.wordpress.com/ Greg Camp

     Why do colleges invite speakers who are speaking to an audience that isn’t present?  Romney yesterday and now Obama today–both are talking to the news cameras.

    • Worried for the country(MA)

      That’s politics.

       The irony is Obama bumped a woman who was slated to give the Barnhard address.

      • Ray in VT

        Agreed, and that latter is kindof funny.

  • Quadraticus

    Lovely… a free campaign advertisement for Obama paid for in part with my taxes.

    • Charles A. Bowsher

       I think it is all of 2% of their funding.  I did not support your wars yet had to pay for them.

    • Ray in VT

      Were you likewise offended when On Point ran Governor Romney’s commencement speech yesterday?

  • http://pulse.yahoo.com/_C2STBLZJK4VKQBV27DVQX3I6CU FAX68

    I bet the people who screw up big time in JP Morgan has Ivy League degrees in Greed.

  • Greyman

    “We don’t look back, we look forward,” says the President. Telling: we don’t look at the concrete past, we peer across limitless horizons of the invisible future, positively poetic.

    • Guest

      You missed the key points in the “Art of Distraction” chapter in your disinformation studies.

      Trying to link this to the president is so graspy and, well, amateur.  You can do better.  

      • Greyman

        I appreciate your attempts to credit me with all kinds of semi-professional deviousness, but I assure you I’m only a part-time machiavellian, only part-time, and an amateur to boot, god help us if I took it too seriously. I only read Orwell at least twice.

  • Carole Corsby

    This latest fiasco with JP Morgan is untenable.  Our economy has been skating on thin ice since Congress gave in to the pressure to de-regulate the banking industry.  I believe that the time has come for our federal government to take over all banks.   With government ownership of all banking, the profits of the business would go directly into the public coffers for use in maintaining all aspects of our government operations – social programs, infrastructure, defense……  Lobbying would die a natural death. 

  • Tina

    Tom!  THANK YOU for asking why we can’t bring back Glass-Steagel (sp?).  I don’t feel like we got an answer, besides the fact that the lobbyists far outnumber the representatives of the citizens, with the implication that a return of G-S won’t happen. But thank you for posing the question several times.  Perhaps you could do a whole show on Glass-Steagel.  

    I didn’t get to hear all of yesterday’s show, but your one guest yesterday was so frighteningly into risk-taking, I was shuddering.  He spoke about basing a whole economy on those players who risk failing 99% of the time for the 1% chance that they would “succeed” on the really big, “innovative” venture.  Please:  our bodies are based on homeostasis:  fight or fright are abnormal states that the body can endure while it works to return to homeostasis.  I believe the economy should operate in the same homeostatic way and for all the people.  Big-time risk taking by a few is frightening and, in my opinion, is no way to organize an economy, as yesterday’s guest was suggesting it should.  It’s scary enough trying to understand bills that aren’t fixed, especially health care bills.  Regular middle class people who may own a home, or part of a home that isn’t owned also by the bank with the mortgage, don’t get bailed out when they have a health care crisis.  Their home can quickly become an albatross around their necks with no bailout in sight.  

  • http://www.facebook.com/profile.php?id=100001436729213 Wes Nickerson

    According to William K. Black, former bank regulator and author of ‘The Best Way to Rob a Bank is to Own One,’ on Democracy Now today, the JP Morgan Chase trade which blew up, was not a true hedge but was a double hedge, doubling down on the original bet, resulting in massive losses. This was an illegal trade according to Black. I say Jamie Dimon is a liar, a con artist, a cheat, and a criminal. He should be put in jail.

    The banks are too big and too powerful. They should be broken up. The CEOs should be also held accountable for their actions. Short of breaking up the big banks and regulating them with laws that have teeth, this pattern will continue. The results will be even worse in the future.

    Both the Democrats and the Republicans are responsible for this lack of accountability. They are both bought out by the banks. Obama’s financial advisors are Wall Street criminals. That’s why we need the Green Party to bring some sanity to government.

  • Drew (GA)

    What if we tried this?:

    ANY institution that provides private loans is PROHIBITED from engaging in investment banking of ANY form. Yes I know the profit margin would be unacceptable (to most).

    Replace Wall Street with a heavily regulated NON-PROFIT exchange to provide for direct investment. Incorparate COMPLETE Transparency.

    Eliminate Short Sells. Require investments (bets) to have a reasonable period of retention prior to exchange.

    I can still dream can’t I? Hope for the best but expect nothing.

  • http://pulse.yahoo.com/_C2STBLZJK4VKQBV27DVQX3I6CU FAX68

    Materialism is the only form of distraction from true bliss.

  • http://pulse.yahoo.com/_C2STBLZJK4VKQBV27DVQX3I6CU FAX68

    Lust is all GET—Love is all GIVE.

  • David

    Distinguish between larege and small banks.  I chair the audit committee of a $400 mil bank and we are getting killed by regulation and compliance costs.  The regulation should be appropriate to the those who had the problems (big banks) and the regulators who didn’t catch the problems – of course now we have the same regulators writing the rules again -expletive expletive.  Out here on “Main” street what profits we are able to generate in this environment are getting eaten up with compliance cost, adding almost nothing of value and taking money away from the shareholders.   SOX was bad enough -now we have the DFA.  Your speakers intimate regulations are NOT being implemented and that is incorrect.  The regulators are taking all of it very seriously.   For those of us who are well capitalized, under a billion in assets and have good controls there should be exceptions.  I am a little put off when I hear comments that just refer to “banks” without pointing out that most community banks  are not the problem.
     
    David Gunn, CPA

    • jimino

      That’s the way it always works at the bought-and-paid for federal level:  only the little guy gets watched like a hawk and closely (often ridiculously) regulated. 

       I have never understood why the trade associations that are supposed to be lobbying on your behalf wouldn’t be loudly and publicly demanding that these financial gamblers be absolutely prohibited from calling themselves “banks” with all the benefits that term implies.  That would at least be one simple step to addressing this problem.

    • TheDailyBuzzherd

      I here ya, David, ain’t throwing stones at your lot. I’m throwing stones at those institutions that have undue influence over US law and work to subvert them to their designs.

      Cutting the Big Boyz down to size with capitalization requirements for loans and debt and capitalization limits to entity size would help stabilize the industry and level the playing field.

  • TomK in Boston

    Bring back Glass Stegall, put “reformed” hedgies and other financial operators into the agencies. Treat CDS like insurance. I’d love to see Markopolis, they guy who handed Madoff to SEC, in charge of the SEC. Send the crooks to jail and take their bonuses.

    Regarding the OT post about fixing the states like CA vs fixing JPM:

    There’s no mystery about this class warfare. They call it “starve the beast” and have told us exactly how they plan to use it. Cut taxes, then become extremely alarmed about the resulting deficit, then screw the middle and working class.

    We are now in an ultra low tax environment, and that and military spending are our main problems. That’s how Bush turned a surplus – remember!!! – into a deficit. With dividends and cap gains at 15%, the top tax rate is effectively 15%, lowest since 1929. The top 1% now have 23% of the total income! What more do you need to know? The income of the oligarchs is way under taxed. I often hear the stupid claim that “if you took all the income” of the 1% it wouldn’t fix the deficit. Guess what: 23% of the total income is about $3 trillion.

    The states have not adjusted income taxes to “follow the money” to the top and have engaged in a race to the bottom on corporate taxes. They try to attract business from other states with tax cuts and special deals. Obviously, the endgame is every state with taxes too low and no advantage. Let’s stop racing to the bottom!

    A big part of CA’s problem is tax cuts. From KC star:

     In California, corporate profits are not merely up. They are booming, the Legislative Analyst’s Office reported not long ago. Apple reported profits of about $1 billion a week and is the world’s most valuable company. Twitter expands rapidly, and the fabulously successful Facebook is on the verge of going public, creating large numbers of new millionaires. But while corporate profits are up, corporate tax collections are 6 percent below estimates, the result of corporate tax breaks added or expanded in recent years. The latest numbers come as a surprise to state budget writers, and that ought to sound alarms. “It is pretty clear that something is far off”, said Jason Sisney of the Legislative Analyst’s Office.  “The impact of one or more policy changes is greater than expected”. Gov. Jerry Brown’s office plans to release a revised budget next week. The budget deficit likely will have grown to $10 billion or more, necessitating more cuts to state services. Corporate taxes make up an ever shrinking share of the state budget, accounting for $9.4 billion in the current fiscal year, slightly less next year. Corporations won’t pay the pre-recession high of $11.8 billion for at least another four years. The corporate tax rate is 8.84 percent, but that’s theoretical. The legislative analyst pegs the effective rate at about 5 percent, largely because of various tax break….Various changes have cut corporate tax collections by $1.2 billion compared to what corporate taxes would have been without these changes

    • Bruce

      Your prescription sounds irrefutable, your history solid and your take on the Calif. predicament cogent.  I’d add one thing about Calif.  Under Reagan, didn’t they pass a law that hamstrings the state legislature making it nearly impossible to raise revenue by increasing taxes without some cumbersome referendum or ballot initiative?

      • TomK in Boston

        I think so.

        The University of California is a national treasure. The internet and biotech were developed in large part at UC, and it’s not coincidence that so much hi tech industry is clustered around UC campuses. “Starve the beast” is also starving the golden goose. UC now gets lass from the state than in 1998, when it had 75,000 fewer students:

        “UC’s share of the state budget has declined dramatically over the last decades. In 1980-81, UC received 5.09 percent of the state’s general funds.  In 2011-12, UC’s share dropped to 2.76 percent.As state support has declined, the student share of their education costs has grown. Since 1990, the state’s contribution to educating each UC student has dropped more than 50 percent.In 1990, the state funded 78 percent of the total cost of education per student. Today, the state funds 39 percent. As state support has declined, the students’ share of their education costs, net of financial aid, has more than tripled, from 13 percent to 49 percent.”

        Is this really preferable to collecting taxes on the 1%?

  • TheDailyBuzzherd

    Ten Questions for Jamie Dimon:
     
    1. What is the first and primary role of a bank?

    2. Define the term “free market”.

    3. Define the term “personal responsibility”.

    4. There’s a term making the rounds in discourse regarding the business ethics of major American corporations over the last quarter century. That term is “extraction”. What do you think extraction is and do you think that’s a fair word to use in describing business practices?

    5. Increasingly, banks have incurred a huge negative opinion of them from the average citizen. How can the banks, while working feverishly to defang all attempts to regulate and downsize them, prove to the public that the banks’ interests are truly aligned with the public’s?

    6. In the aftermath of the bank bailouts of 2008-9 and the role risky investments had on the average citizen, define empathy from a taxpayer’s point of view.

    7. All industries have suffered for the internet. Sales at brick and mortar stores have shifted online; people compete for jobs with whomever has a high speed internet connection. Banks and their brokers have suffered as well for the former reason just mentioned. Suffering amongst disparate industries has been unequal – some get nationalized and placed under citizen receivership, others are left to die in the field. How then can we justify reserving public funds to bail out the banking industry at the expense of those who didn’t create the financial crisis?

    8. The demographics are indisputable: We are in the throes of the biggest medical payout in history, the retirement of the baby boomer generation. What do you feel the role of the banks should be in order to make sure the country safely transitions through this crucial period, especially at a time when US public money is under extreme stress caused by long wars and a huge deficit?

    9. Not long ago, the public was outraged that the US Post Office management was getting huge raises at a time when the Office was rolling in debt. Can bank managers assume they can always command such dominion over their own compensation at the same time their institutions have bled so much money, is it hypocritical of them to accuse public institution managers of the same practice and if the public and corporations acting as people can rebuke public institutions for such incompetence, then shouldn’t shareholders of banks that lose much of their value under specific managers have the power to rebuke and control the compensation of those managers?

    10. Objectively, compare the health of the banking industry under the Glass-Steagall Act with the period without it.

    • Zing

       Blah blah blah blah blah blah…why don’t you ask the current Republican president your pedantic questions? 

  • http://pulse.yahoo.com/_C2STBLZJK4VKQBV27DVQX3I6CU FAX68

    iOnePoint:

    $23 Million for the Jamie Dimon for losing $2 billion worth of investment and $8 million for ex-yahoo CEO who lied on his resume.

    • Ray in VT

      Man, I’m such a sucker!  How can I get in on that action?  I can lose a company a bunch of money for a fraction of the cost.

      • http://pulse.yahoo.com/_C2STBLZJK4VKQBV27DVQX3I6CU FAX68

        There is saying the Philippines. If you leave a hundred dollar bill in a blind man’s cup and when you return it will still be there.

    • JGC

      I understand that Dimon released the news of the loss before they started their internal mechanisms of mop-up (which is apparently unusual for a bank).  But did he release it only after most of the JPMorgan shareholders had cast their votes in the recommended “FOR” position concerning executive compensation?  Maybe the Justice Department  or the Congressional inquiry can also look into the timing of the announcement. I don’t think Dimon was personally worried about how the news would affect his own compensation, but I am sure he wouldn’t want to disrupt payments to all his irreplaceable “talent”.

      • JGC

        Then again, I suppose Dimon would have preferred to wait until Dodd-Frank/Volker were sufficiently strangled, then signed into law before adding additional fuel to the Congressional fire. Oh, these things must be treated delicately, delicately…

  • Laura in Santa Barbara

    It’s hard to articulate the disgust I feel for these arrogant financial titans who hold our economy hostage. Please, please, let us use this latest fiasco as an opportunity to finally enact real reforms.

    • Laurence Hauben

       We are not hostages. We can vote with our money. Close your bank account and move to a Credit Union.

  • TheDailyBuzzherd

    Bonus Question worth ten points:

    Mr Dimon, what do you make of the following?

    Cathy O’Neil, former statistician at DE Shaw, was asked by “Frontline”, “Why would a big bank with so much at stake not care about the risks that they were taking?”

    Her response: “Well, at that point, they’d all been bailed out. My feeling at that point was, well, of course they don’t care, because they’re government-backed. They just simply don’t care. And that brings us to this “too big to fail” problem.

    “We have to make it a situation where banks actually, like hedge funds, care about losing money.”

    Mr Dimon, what do O’Neil’s statements say about the popular assumptions regarding the “free market”? Is it fair that those bank representatives who enjoyed the bailout funds have shares in the Federal Reserve, the very institution that ordered the bailouts?

  • Kcontos

    I thought repealing the Glass Steagall Act would lead to this. Insured banks should not be able to do investment banking, market making, etc. Reenact the Act.

    • Grover9

      I remember this as well. It seemed insane at the time.

      • Guest

        It was insane, and the democrats should not have caved. The republican party wheeled out the old shibboleths about the magic of an unimpeded private sector and the limitless upside of all these new financial innovations.

        They forgot to add the upside was only for the  hedge fund managers and Bain Capitals of the world, and that consumers, taxpayers, and retirees would be left to clean up the disaster.

        It’s clear Glass Steagall needs to be reinstated.  Elizabeth Warren is right. Banking should be boring. 

        • TomK in Boston

          Sure, I thought so too, and it was obvious to me that the Bush tax cuts wold lead to soaring inequality.

  • Laurence Hauben

    We can’t wait for the politicians. We the people need to close our bank accounts and move over to Credit Unions. That will get the message through.

    • RChicago

      Agree. Of course they would still have the money of corporations even if they don’t have the money of individuals.

  • Grover9

    The frightening thing is that we are debating this. It’s reminds me of debating whether congress should be able to do indider trading.

    • TomK in Boston

      Agreed. Why do we need JPM screwing up again to focus our attention when we already had the Bush crash, the worst since 1929?

      Unfortunately I know the answer: the power of the romney-types acting through their pawns in congress.

      • Alan in NH

        Well, yes. But one-third of those Senate pawns are up for election, and all of the representative pawns. Is there anyone running anywhere who is not a pawn? Do we know who s(he) is? Is the big money so powerful that we couldn’t change things in two election cycles? Just a thought. Because most of the responses, on this board at least, see a problem with the way things are running now.

        • TomK in Boston

          But very few candidates offer the possibility of change, and a good number who do get bought when they get to DC. I don’t see a lot of Eliz Warrens out there.

    • TheDailyBuzzherd

      Grover9: AMEN.

      Endless debate wastes time, resources, and obfuscates purpose.

       

    • RChicago

      I’m exhausted by the debate.

      Would we sit around debating whether or not Charles Manson should be jailed for his crimes? No. We threw him in jail and threw away the key.

  • Bruce

    I didn’t have a chance to hear the first half of today’s program, but from what I read about it and the comments below, it appears today’s show was a perfect segue from yesterday’s provocative broadcast.  Thanks OnPoint for another stellar effort. 

  • TomK in Boston

    I manage my own money and I know what a hedge is. It’s something that goes up when my other holdings go down, to reduce volatility. For example if I think the stock mkt is going down and I don’t want to sell all my stocks, I might buy puts on the S&P, which will go up if the mkt goes down.

    JPM’s loss was NOT a hedge or we would be hearing about what went up to offset the loss. If the hedge loses, the thing it’s hedging gains.

    I think they are lying because there are exemptions in dodd-frank for hedging. There are some restrictions on prop trading but hedging is OK, so you just call your gambling a hedge.

  • http://pulse.yahoo.com/_C2STBLZJK4VKQBV27DVQX3I6CU FAX68

    The most freightining thing about this news is that the people who made the mess are still out there and even got compensations for doing the wrong thing.

    • http://pulse.yahoo.com/_C2STBLZJK4VKQBV27DVQX3I6CU FAX68

      my bad i meant frightening

      • Zing

         No you didn’t…you were honest the first time.

  • Jack Marshak

    It’s funny how President Obama failed to mention in his graduation speech at (all female) Barnard College,

    that women in his administration are paid significantly less than their male counterparts.
    http://www.dailymail.co.uk/news/article-2128513/Women-paid-significantly-Obama-White-House-male-counterparts.html

  • http://pulse.yahoo.com/_C2STBLZJK4VKQBV27DVQX3I6CU FAX68

    While 25 millions Americans are still out of work. The Greed of wall street continues to destroy the retirement plans of hard working middle class Americans.

    Do we always have to suffer? Do the middle class always will be silent while wall street plunder our retirement funds so they can continue using the silver platters that the American middle class polished for them.

    • Zing

       Most of those imaginary 25 “millions” made poor choices for education and career, as you did.  Yes, you suffer for your mistakes.  You were warned and you didn’t listen.

      • JGC

        Yikes, Zing.  Anger management issues tonight. Maybe we need to employ an out-of-work psychologist to get to the bottom of this. 

  • Adrian from RI

    Why get upset about “Two billion dollars lost in a flash by JP Morgan?” In this era of Too Big to Fail the government keeps losing multi, multi billions of dollars in an explosion of bailouts and stimulus’s. Also the moral hazards created by government insurance are open invitations for banks to gamble. Head, the bank wins; tail, the taxpayer looses.
     
    The conservative “intellectual” believes that God is the answer to all our problems. The NPR kind of “intellectual,” like Tom, believes that government regulations are the answers to all our problems. Regulations like the Dodd-Frank act; but putting the financial industry under the control of Christopher Dodd and Barney Frank is like putting Don Carleone in charge of the police departments.
     
    We are a democracy now and we get what we deserve good and hard. We all would do well to study the Declaration of Independence instead of the Communist Manifesto.

    • J P Fitzsimmons

       So what is your solution?

  • hsumao

    gambling away one’s own $ is called addiction.  gambling away the public’s $ is called crime.  

    • http://profile.yahoo.com/PQOCSU3NJ5J6SSQBEM5YBFCPZY Jason__A

      Welcome to the post Glass-Steagal world of corruption and crime.

      • Still Here

        what crime? except for your criminal ignorance

        • http://profile.yahoo.com/PQOCSU3NJ5J6SSQBEM5YBFCPZY Jason__A

          If it has to be explained then it is lost on you. The comment of a good Republican, I see…DUH

          • Still Here

            Typical Democrat talk, you got nothing but ignorance.

    • Zing

       So where’s the indictment?

      • Still Here

        don’t hold your breath

  • http://pulse.yahoo.com/_C2STBLZJK4VKQBV27DVQX3I6CU FAX68

    Affordable Care Act premium rebate checks will soon be in the mail. How do you like that Obamacare now

    • Jack Marshak

      Obamacare is $111 billion dollars over budget
      http://breezecourier.com/main.asp?SectionID=76&SubSectionID=619&ArticleID=123465

      You’d better enjoy that check now, because after 2012, you’ll be getting a bill in the mail and even less healthcare.

      • http://pulse.yahoo.com/_C2STBLZJK4VKQBV27DVQX3I6CU FAX68

        Obama care is not fully implemented yet. if fully implemented a lot of physician’s private practices will benefit from Obama Care a lot of physicians claims will be reimbursed instead of denied. $111 over budget is better than paying Billions of tax payers money to un-insured Americans to pay their Free care and to reimburse those hospitals that provided healthcare to the un-insured.

        As I predicted before Obama will be re-elected.

      • http://profile.yahoo.com/PQOCSU3NJ5J6SSQBEM5YBFCPZY Jason__A

        I wish you right wing nuts would give up with your stupid “Obamacare” nonsense. The current health system is clearly broken, what do YOU suggest?  Typical rightest…full of slogans and empty words…but no ideas.

        • Jack Marshak

          You’re the one who is incapable of having an intelligent conversation.  You hurl insults,  you make incredulous claims, and you offer no empirical info. to defend your incoherent babble.

          • http://profile.yahoo.com/PQOCSU3NJ5J6SSQBEM5YBFCPZY Jason__A

            An entirely precictable Republican non-answer. You folks are as lame as they come with your empty Frank Luntz focus group inspired slogans.

          • Jack Marshak

            Get ready for two big losses:

            The first coming in June when the Supreme Court strikes down Obamacare,

            and the second in November when Obama permanently moves back to Chicago, after he gets voted out of office.

          • Still Here

            I feel bad for Chicago! The Cubs and now this

          • http://profile.yahoo.com/PQOCSU3NJ5J6SSQBEM5YBFCPZY Jason__A

            Only in your formerly, wet dreams.

  • Sharon Stangenes

    I am listening to a delayed broadcast on the Volcker rule. I am a retired reporter who covered the repeal of Glass-Steagall during the Clinton administration. The argument that the banks used to motivate the change–and to which they would return if there is any movement to re-enact it–is that they would be hamstrung from competing in a global banking market if they cannot use all aspects of financial services to raise money, compete with ever stronger Asian and, in the early 1990s, European bankers.  At that time, a number of Asian (Japanese primarily) and European banks indeed were buying mid-sized to large U.S. institutions from old-fashioned savings and loans to insurance companies.
    While I believe Glass-Steagall should never have been repealed, the fears of that time led to much of the current, recently accelerated, consolidation. And those fears will most likely be exploited again should serious new firewalls be considered serious.
    Sharon in Chicago  

    • Guest

      So were the concerns legit, or just trumped-up excuses to grant them the right to gamble with other peoples’ money? Seems there are better ways for banks to make money. Placing bets isn’t one of them. 

    • http://profile.yahoo.com/PQOCSU3NJ5J6SSQBEM5YBFCPZY Jason__A

      Excellent commentary Sharon, thanks. I agree that Glass-Stegall should never have been repealed. And any excuses/justifications the finance community used to buy off, errr…pressure the Congress to repeal GS were lies.

      This You Tube of Senator Dorgan in 1999 sums it all up nicely, and honestly. What he predicted with the repeal of GS came true. Sadly

      http://www.youtube.com/watch?v=w2nZbo8SKbg

  • Kiep99

    Add in the $20B equity loss in JPMChase stock a/of yesterday & things get interesting.  Add in that we still don’t know what trade(s) & financial instruments are involved, there’s every possibility that this real “reality show” will continue.  + MERS breaking state/county/city laws, etc.

  • http://profile.yahoo.com/BQJUUBAEDNYEKAVOIUIVJRW4BQ Baba Baksheesh

    supposed hedging, but it will probably prove to not be that at all. That was just a way of getting around the Volcker Rule. The irresponsibility continues. When will government finally learn the lesson from what happened in 2008 and implement real reform???

  • RChicago

    The only difference between the bankers and Jesse James is that Jesse James had a gun when he robbed people.

    • JGC

      Memo: Urgent
      From: Banksters
      To: NRA

      Can you bankroll us some guns ASAP? AR-15 if possible. If not, a Roomba armed with a 9mm. 

      • RChicago

        This is how I like my news delivered – with humor. It makes the bitter pill go down so much more easily.

        The Roomba with a 9mm is priceless!

    • Zing

       Don’t worry..the current Republican president is ther to protect you.

  • Terry Tree Tree

    Timed so Dimon had votes to stay in office, BEFORE the news was released!
       Isn’t THAT some sort of FRAUD to investors?

    • JustSayin

       …and don’t think there weren’t proxy put options for everyone who knew the share price would tumble on the news.

      • Zing

         But you don’t know…because you are on the outside and always will be….

    • Zing

       Then let the shareholders sue.  The law says there’s no fraud…you say there’s fraud because you have no stake anywhere…real bravery.

  • JGC

    A question:  At some point when companies become too large and unwieldy, they have discussions about splitting the company into sensical components to release shareholder value, and spur growth of the divided units. Recent examples being Motorola and Conoco Phillips. Most companies, when split, do realize gains. 

    Why are the Big Banks so resistant to this idea? They would probably gain better management over their subunits, be more responsive to their customers; and isn’t this the dream of every good Capitalist, releasing shareholder value?  Big Banks, release the Shareholder Value! Stop holding Shareholder Value hostage now!

    (This message brought to you by Big Banks Anonymous.)

  • resident alien

    I have a different suggestion:
    the problem is to separate legitimate investments from gambling!

    commercial banks should still, but only have the option to do honest longterm investments in stock, commodities & simple financial products. this his beneficial for the economy & the portfolio of their clients.

    all these ultra fast arbitrage transactions, derivatives of derivatives that are just created to obfuscated their non-value, the creation of IOUs after IOUs that are just  representing “virtual” capital and feeding bubble after bubble until they burst, should be highly regulated & taxed like gambling!
    Because it is gambling! Traders don’t make money, they re-distribute money!

    It’s all an illusion unless the underlying values increase in “real  life” , like the value of  companies increases, because the innovate, get more efficient…

    As I stated above, the problem is to separate legitimate investments from gambling!

    One way is by applying very distinct taxation on duration:
    1 year – infinity: definitely longterm INVESTMENT
    6mo -1 year: midterm INVESTMENT
    3-6mo: shorterm INVESTMENT

    anything shorter, i.e. nanosecond arbitrage trading is GAMBLING
    & should be regulated & taxed like gambling.
    Also, how’s about a transaction tax?
    In anycase, trading needs to get slowed down! Way down!
    Traders need some time to think!

    Of course, one has to consider all possible loopholes & unintended consequences….

    but there you have it, just my 2bits
    & sure, you can call it the ralf rule if you want ;-)

    • resident alien

       sorry for the typos…

      • JGC

        Seriously, those sound like solid ideas.  I don’t know enough about the financial world to know if they could be implemented;  I was just trying to appeal to them in Banksterese buzzwords that could perhaps get them under a trance: value, gains, shareholder, units…You are getting verrry sleeeepy…Now you will go to your trading desk and release your bonuses and stock options to the 99%…

    • JGC

      Hmmmm…separate legitimate investments from gambling…(If you could see me now, I am stroking my chin.)  Hmmmm…separate LEGITIMATE investments–from GAMBLING!

      Naahh. It would never work.

    • http://profile.yahoo.com/PQOCSU3NJ5J6SSQBEM5YBFCPZY Jason__A

      Exactly.

      More smoke, and more mirrors…and voila:  a new financial “product” is marketed.  What crap these criminal Wall Streeters try. Put most of them in jail for 50 years and fine them into bankruptcy. Let their wives and children starve and be forced to beg on the street for food. The rest of corporate America will learn real quick.

  • Gregg

    Apologies for going off-topic but this can’t wait until Friday.

    “I don’t usually admire Sarah Palin,” Chomsky said, “but when she was
    making fun of this ‘hopey changey stuff,’ she was right, there was
    nothing there.”

    http://www.nationalreview.com/corner/300039/noam-chomsky-sarah-palin-right-about-hopey-changey-stuff-noah-glyn#

    • Brett

      Well…yes, Obama has come along at a time when we as a country have needed a truly great president who could not only inspire a feeling of hope and change through rhetoric mixed with a few symbolic gestures, but who could also make sweeping changes and who could instill hope through a monumental paradigm shift. 

      What we got was an ostensibly mediocre president who has been, for whatever stones in his passway (to borrow a line from a Robert Johnson song), an ineffectual president in making real changes and in sustaining hope through real, permanent shifts in our systems of government and economic institutions.

      You and I could no doubt argue until the cows come home about the devils in the details regarding the conditions under which those changes take place, what those changes specifically would be and whether or not certain conditions and approaches either need or don’t need changing. But make no mistake, Romney would neither be the harbinger of such changes nor the man who would be up to the task of creating such changes. It is my belief that Romney would not only NOT bring about fundamental changes for the greater good of the US in looking forward, he would not serve to ameliorate our problems. My sense is that he would exacerbate the problems we currently experience with our political and economic systems. 

      P.S.-Thanks for the link to the video. While I haven’t had the time to yet watch it this morning, I’ll take the time.  

  • kdt

    I don’t know if I can listen to another Ashbrook show on economics or finance.  He just hosted an entire show rooted in the 2008 meltdown and subsequent regulation without mention of the intertwined credit and housing bubbles, the Fed’s monetary policy role, Fannie or Freddie.  He asserted that we haven’t had banking crises in the decades since the 1930s FDR crusade, despite the early-80s S&L debacle and a host of other cyclical near-misses, and despite the fact that much of what FDR tried to do was explicitly found unconstitutional and scrapped for that reason or utter impracticality. His guest asserted that the Fed reduced borrowing rates for banks to near zero, but citizens still have to pay ‘market rates’ unfairly, when in fact this was simply the Fed’s mechanism for bailing out over-levered borrowers of all kinds, especially households, which are now able to borrow on a home at favorable rates not seen in 75 years, a Fed gift to them at least as much as to the banks, who are mostly borrowing from each other, not the taxpayer.  As to capitalism frequently needing saved from itself, this is stated as though there is a preferable alternative economic system which will presumably create opportunity and prosperity without bumps and bruises.  Finally, he categorically labelled Dimon’s statement “we don’t take big risks” as “not true,” (essentially, Ashbrook the radio guy calling Dimon the business guy a liar because he holds the mic, not because he understands the derivative trade involved) as though a $2 billion loss at one $2.2 trillion company (eoy 2011 assets) is evidence of a systemic tremor affecting millions of insured depositors and the public purse (it is not; it is just a ding for JPM shareholders, who will collectively earn $17 billion this year, rather than $19 billion).  So many unsupported, erroneous or incomplete statements that I don’t know why I would listen again.       

    • Still Here

      He’s also afraid to have an expert on; instead he goes for generalist journalists.  It’s pathetic but that way his static world view doesn’t get challenged. 

  • Jason Keysar

    Zuckerman makes an argument for Glass Stiegel at 19:35-20:00 but is too much of a shill to just say it.  It’s so frustrating to hear someone admit the truth then argue against it.

  • Brett

    Mixing together the banking needs of we mere mortals, along with real estate investment and securities was a bad move (there never should have been a repeal to protect and keep separate those systems) and it has produced a toxic stew. 

    The slicing and dicing along with an environment allowing (and even promoting) conflict of interests with the whole credit default swaps practices hasn’t done our economic structures any favors (to understate the situation). 

    All that I’ve mentioned, at the very least, have reduced accountability.

  • Romney Bin Bush

    We the people need to wake up. Form the American People Party. No, it will not be “anti job creator”. We will simply hold these glorified “executives” to the same standards as the workers who make them rich. Outlaw golden parachutes. Tie pay to performance. Fire them with no chance of further employment when they do wrong. Tax windfall profits from activities that do not create wealth and jobs at home. That’s what we need to get our country back. Wake up from the corporate sponsored electoral entertainment TV..

  • Nothingboy

    There was an On-Point program a few months ago about Muncie Indiana, and the how the ways its economy and culture has changed over the last century represent a loss of faith in… everything. Things like this JP Morgan incident are why sentiments of faithlessness are rampant in this country. Wealthy bank people can make decisions that have a negative impact on the financial well-being of everyone in the world with no consequences and no one who has the power to change it makes any changes. No one who’s being paid to “represent” me does a single thing that will pave a better future for me and therefore I have a reason to have no faith in my country (and I certainly don’t), nor any faith in the goofy little jesus story so many of the politicians who’ve had the most devastating impact on our country say they believe in (George W. Bush is a better example than anyone else).

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Aug 29, 2014
Ukrainian forces guard a checkpoint in the town of Mariupol, eastern Ukraine, Thursday, Aug. 28, 2014. Ukraine's president Petro Poroshenko called an emergency meeting of the nation's security council and canceled a foreign trip Thursday, declaring that "Russian forces have entered Ukraine," as concerns grew about the opening of a new front in the conflict.  (AP)

War moves over Syria, Ukraine. Burger King moves to Canada. Nine-year-olds and Uzis. Our weekly news roundtable goes behind the headlines.

On Point Blog
On Point Blog
Our Week In The Web: August 29, 2014
Friday, Aug 29, 2014

On hypothetical questions, Beyoncé and the unending flow of social media.

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Drew Bledsoe Is Scoring Touchdowns (In The Vineyards)
Thursday, Aug 28, 2014

Football great — and vineyard owner — Drew Bledsoe talks wine, onions and the weird way they intersect sometimes in Walla Walla, Washington.

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Poutine Whoppers? Why Burger King Is Bailing Out For Canada
Tuesday, Aug 26, 2014

Why is Burger King buying a Canadian coffee and doughnut chain? (We’ll give you a hint: tax rates).

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