The dog that didn't bark this week, let alone bite, was the president's response to JPMorgan Chase's bombshell admission of losing more than $2 billion in risky derivative trades that should never have been made.
"JPMorgan is one of the best-managed banks there is. Jamie Dimon, the head of it, is one of the smartest bankers we got and they still lost $2 billion," the president said on the television show The View, which aired Tuesday, suggesting that a weaker bank might not have survived.
That was it.
Not a word about Jamie Dimon's tireless campaign to eviscerate the Dodd-Frank financial reform bill; his loud and repeated charge that the Street's near meltdown in 2008 didn't warrant more financial regulation; his leadership of Wall Street's brazen lobbying campaign to delay the Volcker Rule under Dodd-Frank, which is still delayed; and his efforts to make that rule meaningless by widening a loophole allowing banks to use commercial deposits to "hedge" (that is, make offsetting bets) their derivative trades.
Nor any mention of Dimon's outrageous flaunting of Dodd-Frank and of the Volcker Rule by setting up a special division in the bank to make huge (and hugely profitable, when the bets paid off) derivative trades disguised as hedges.
Nor Dimon's dual role as both chairman and CEO of JPMorgan (frowned on by experts in corporate governance) for which he collected a whopping $23 million this year, and $23 million in 2010 and 2011 in addition to a $17 million bonus.
Even if Obama didn't want to criticize Dimon, at the very least he could have used the occasion to come out squarely in favor of tougher financial regulation. It's the perfect time for him to call for resurrecting the Glass-Steagall Act, of which the Volcker Rule -- with its giant loophole for hedges -- is a pale and inadequate substitute.
And for breaking up the biggest banks and setting a cap on their size, as the Dallas branch of the Federal Reserve recommended several weeks ago.
Wall Street's biggest banks were too big to fail before the bailout. Now, led by JPMorgan Chase, they're even bigger. Twenty years ago, the 10 largest banks on the Street held 10 percent of America's total bank assets. Now they hold over 70 percent.
This would give Obama a perfect way to distinguish himself from Mitt Romney -- who has pledged to repeal Dodd-Frank altogether if he's elected president, who has also been raking in more than $20 million a year through financial games, and who shares the same prevailing Wall Street view of the economy as profits to be maximized while people are minimized (to Romney, corporations are people).
But the Obama campaign has so far chosen to attack Romney's character rather than his place in the new American plutocracy, with ads highlighting the jobs that were lost when Romney, as head of Bain Capital, took over a Midwest steel company.
It's the same personal attack Newt Gingrich and Rick Perry leveled at Romney. But Gingrich and Perry had little choice. They didn't want to criticize the system that allowed Romney to do this because their party celebrates no-holds-barred free-market capitalism.
Obama does have a choice. He can assail Romney's character but he can also take on the system that allows private-equity managers, as well as Wall Street's biggest banks, to continue to make huge profits at the expense of average Americans. Romney is the poster-child for the excesses of that system, just as is Jamie Dimon and JPMorgan Chase.
We are still at the very early stages of the 2012 campaign. There's still time for Obama to come out swinging -- not only at Romney but also at the system of which Romney is a part, and to base his campaign on policies that will make that system work for ordinary people. Let's hope he does.
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Bill Moyers: Is JPMorgan's Loss a Canary in a Coal Mine?
Next Bailout.... shrugs shoulders
That said, he's a faaaaar better choice than Willard.
But I don't think we'll see any politicians in our lifetime who will have the power and the courage to take on the banks before the banks take down our economy. If we let them keep making the rules --LIMITLESS PLUNDER! -- then it's only a matter of time.
It's the way they want it. Choose your poy zin.
As you suggest that President Obama attack the "huge profits" that private equity managers make, you MUST be aware of Tuesday's news coverage:
Daily Kos: 'Hamilton “Tony” James — the president of the Blackstone Group, the nation’s largest private equity firm — is hosting a $35,800-a-head dinner for Obama, with 60 Democratic allies expected to attend, according to a campaign official. Many in attendance are expected to have ties to the private equity sector.'
I forget, is President Obama CRITICIZING private equity firms, or taking their donations?!
'
Should he lose by not playing?
Well, NOW he can do that.
AFTER Obama attended the huge fundraiser on Tuesday at the home of the Blackstone Group's President, Tony James.
Because it would have been bad taste to slap the face of a large equity firm BEFORE taking their donations. Blackstone Group: "one of the largest investors in leveraged buyout transactions over the last decade."
Atta boy, Obama. Go get 'em.
Willard would remove what little protection are left.
It seems that Congress is getting a pass on their weak Wall Street reform and the lack of implementation of that weak legislation by using Obama as a human shield. Dodd-Frank was probably the best we could get with a such solid bloc of recalcitrant Republicans and so many conciliatory Democrats on the hill.
What I just wrote makes me feel ill.
This sounds like an illegal conflict of interests to me ... especially when JP Morgan looks to gain a net benefit from derivatives and insurance from it's own poor performance as a company. When one hand stops watching the other, it appears you lose $2 billion (+ more) in a short six weeks. Don't these bankers have something better to do than searching for additional dollars and cents in their belly buttons.
What do you think happened and who made out?
I'm serious.
If you go to Washington and do exactly what you're told, you'll come out of there in just a few years a multi-billionaire; or certainly, hundreds of millions of dollars will be squirreled away in that secret account that you'll never have to admit exists.
Your job description is clear: pass the laws you're told to pass, repeal the ones you're told to repeal, and bury passages on page 1,631 as instructed. You are the "0.0001% percent." If you're a member of, say, the Securities and Exchange Commission, then once again your job is to make just enough of a pretense of enforcing the law (e.g. taking a troublemaker and putting him where the sun don't shine), while otherwise making it your singular business to ensure that laws do not get enforced. "The Fixer" always does very well.
As I said, Richard, "I'm serious." And I would also point out that History is on my side. Left to their own devices, this is what governments devolve to. Most of them took many hundreds of years to do it. Ours didn't.
but we won't vote for them,
The other is going to take on the 99% for the banks infinity more than we want.
Choose.
Another fact: The lack of credit and financial flexibility is directed related to the ongoing financial crisis.
Another fact: Without more available credit, the only entities able to spend are governments (federal, state and local) which makes the deficit even worse.
If you accept the above statements, it should be obvious that without a corrected financial system in place, we cannot solve the job problem. The time has come for the entire financial structure in the US to work and be productive for the vast majority of Americans and not the privileged few who can reward the politicians for making decisions enhancing their already very comfortable position.
I don't. There's plenty of credit available. The problem is lack of demand. At least, so say most economists. No one is talking about credit problems since the bottom of 2008.
The problem is the bankster would rather gamble on SWAPS than invest in the real world.
Obama had a chance to change that, had Geithner do his little stress test on the banks, and then went right ahead and gave out more money without demanding that the banks actually send it downstream to the smaller banks and businesses where the credit was need that could have created jobs.
Both failed to make the banks use that cash to get the economy moving.