Washington's Blog: The Truth About JP Morgan's $2 Billion Loss
|Having trouble viewing this email? Click here|
The Truth About JP Morgan’s $2 Billion Loss
By Washington's Blog
Global Research, May 16, 2012
URL of this article: www.globalresearch.ca/index.
Before we can understand what’s really going on with JP Morgan’s loss (which will probably end up being a lot more than $2 billion), we need a little background.
What Does It Mean?Pundits and consumers alike are reacting to JP Morgan’s loss like a startled herd of sheep.
They somehow believed that the “best of the breed” bank and CEO – the biggest boy on the block – was immune from losses. Especially since JPM has been so favored by the Feds, and Dimon was so favored that he was being groomed for Secretary of Treasury.
And the fact that the head cheerleader for letting banks police themselves has egg on his face is making a lot of people nervous.
And that the biggest of the too big to fails could conceivably fail.
The government says its launching a criminal probe into JPM’s trades.
Ratings services have downgraded JPM’s credit, and many commentators have noted that other banks may be downgraded as well.
Elizabeth Warren is calling for Dimon to resign from the New York Fed:
Even CNBC is now calling for Glass-Steagall to be put back in place. Banking expert Chris Whalen writes:
Someone at the Fed should have at least secondary accountability for the JPM losses if the VaR model/process was faulty. Is there any accountability for incompetent, badly managed federal bank regulators? As our colleague Janet Tavakoli wrote in the Huffington Post: “The U.S. can count on JPMorgan to continue both long and short market manipulation and take its winnings and losses from blind gambles. Shareholders, taxpayers, and consumers will foot the bill for any unpleasant global consequences.”And Reuters correctly notes:
JP Morgan Chase’s loss is the perhaps inevitable result of the interaction of two policies: too big to fail and zero interest rates.
Please support Global Research
Global Research relies on the financial support of its readers