As but one example of a widespread reaction, words like "too cozy" and "ridiculous" were among the adjectives applied to the testimony of Jamie Dimon, Chairman and CEO of JP Morgan Chase, before yesterday's Senate Banking Committee Hearing on CNN that evening (CNN's John King Show). Evidence of the extensive frustration felt by those who wanted hard answers to hard questions.
What we did get was a wonderful performance in contrition -- you know, losing $2 billion is human and that sort of thing. But remarkably, with little pushback from the assembled solons, Dimon would claim, straight-faced, "I don't know what the Volcker Rule is, it hasn't been written yet." This from a man who may not know his rule, but knows enough about Mr. Volcker to have been quoted saying, "Paul Volcker, by his own admission, has said he doesn't understand capital markets. He has proven that to me."
This from the head of a "bank" who seems at loss to distinguish between proprietary trading and hedging, a "bank" that has spent into the billions under Dimon's suzerainty, expanding their proprietary trading capabilities by acquiring the prop trading divisions of Bear Stearns and UBS, RBS Sempra Commodities, becoming the largest investor in the London Metals Exchange, extensively poaching traders and executives from rivals and boosting their trading work force from 125 in 2006 to some 1800 by 2010.
Ironically, the day before the Senate Hearing the "bank" announced it had hired an ex-Goldman Sachs energy trader to "expand its customer flow business amid tightening regulation over proprietary trading." Interesting language from a "bank" known to charter VLCC's tankers (very large commodity carriers of some 200,000 DWT or more), and fill them with millions of barrels crude oil (being termed 'financial transaction' or 'repurchase transaction,' but for all intents and purposes largely 'prop trades'). This means oil taken off the market when it might have had a salutary impact on reducing extortionary oil prices. Then keeping the tankers anchored at sea for months at a time. Immense cargoes paid with funds at near-zero interest rates accessible to the "bank" at the Fed window, all the while being custodian of billions of dollars in deposits guaranteed by the government through the Federal Deposit Insurance Program (FDIC). Their new hire could have been the focus of some interesting questioning at the hearings, but alas!
Oil is not the only gambit in play at Mr. Dimon's "bank." According to the Daily Telegraph, the "bank" was reputed to have speculated extensively in the copper market, purchasing over a billion dollars of the metal and pushing prices to their highest levels since the banking crisis in 2008. Being major players on the very commodity exchange where copper is traded, their investment in the London Metals Exchange must certainly have helped.
As to Mr. Dimon's assertion of "I don't know what the Volker rule is," a suggestion: When trying to look it up, start with the word 'Casino.'
Follow Raymond J. Learsy on Twitter: www.twitter.com/raymondLearsy
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It seems everyone involved in the financial markets worldwide is either a liar or incompetent. I'll admit to occasional incompetence, but I have never been rewarded with multi-million dollar paychecks and multi-billion dollar taxpayer bailouts.
Simply put, if their are, by their own admissions, incompetent, they need to be flipping burgers. If they are lying, they need to be in prison.
It is sad that so much of our public, especially the tea bagging kool aid drinking, Romney supporting Republicans are so cowed by this version of crony socialism that they who scream 'Obama is a socialist' fawn over the reigning princes of socialistic behavior; our bankers and financiers and their Republican congressional stooges.
When you create a corrupt structure, corruption is legal and if 'law' is the only judgment upon the system well then you should read history. For everything that Adolf Hitler did, he never broke the law. That's right, by the time 12 million people were marching off to death camps the State had passed laws making it all legal.
So your 'didn't break the law' argument is...?
The United States is fast approaching these tin horn governments and doing it with the grinning approval of a goodly amount of American voters.
I agree that it is a rigged system but people still have the responsibility to know how their money will be used, if they put their money in a high risk investment and lose it all that is too bad (as long as there was no fraud). The public should not bail them out nor should they bail out the investment business.
http://www.whale.to/b/m_ch5.html
But currently my credit union pays 1.6% on 5 year $10,000 CD's
http://www.rollingstone.com/politics/news/looting-main-street-20100331
Check this out from Taibbi. An oldie but goody. Shows how they really care for this country and the people in it. It's their business model, but on a much bigger scale now.
Then we have all these politicians, the corporate media, all who profit from the story line, and law officials of every kind acting like they hold up any principles,or law resembling justice( as shown yesterday). When the only thing they really hold up is some wealthy guys old furry tennis balls, juggling them on their chins like trained circus seals. ar ar ar art. I guess they tell themselves it's an art form.
We have to break up the banks, or simply break it down into two words. CAPITAL REQUIREMENTS. Scream it!!!! Over and over. Nothing will change till there is skin in the game. It's short and sweet, so people will get it, and Bloomburg Will, try to outlaw it so it, must be sweet goodness, and it might get some airplay.
If............. we choose to be.
It's a strange, strange world we live in.
The long term unemployed and under employed have no way to hedge against hunger and homelessness....
Those who have it all, get even more....those who have little left have nothing but suffering to look forward too...and this is America...
The old Capitalist Concept of Supply and Demand to create a price is nothing but a quaint , old idea that no longer applies . In today 's Markets SPECULATION rains supreme.
Power in Financial circles has reached incredible proportions , and now is safe to say that Banks do control the world . If anyone thought that after the Financial debacle cause by Bankers, the public was going to wake up and rise in indignation against all politicians baking them .. They were wrong.
Banks not only control the money, they control the power, and the message .
Nothing has changed. 600 Trillion Dollars of obscure derivatives are still out there, banks are bigger than ever, and the Dimon's of the world continue to enjoy Super Star status among the twisted ranks of WS , for getting away with what in another age would have been considered gross Mismanagement at best , and Unlawful use of Bank Funds at worst .
We are just sleep walking to what can very well become the Greatest Depression .. Mark my words.
70% of trade done in the Markets (Financial and Commodities) , is done by DAY TRADERS , not investors . And most professional day traders use what is commonly known as " High Frequency Trading" ... And by this they DO MEAN High Frequency trading , at a rate of Billions of Dollars in micro seconds , using the world's fastest Computers, and most complex Mathematical algorithms .
This kind of trading makes investors look like fools , because traders NEED VOLATILITY to make money , while Investors need stability . Fact is that hedge funds, and big banks can and will at a moment's notice push entire markets up or down , by taking enormous positions , holding them for a few days and then exiting with big profits ... That come from the rest of us in the Economy .
Oil is a perfect example where Markets push a commodity up PURELY ON SPECULATION ... They make their money basically charging us a tax on their perception of "premium for risk" .. Only they are the ones that conveniently get to price "risk" any darn way they wish to price it .