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Regulation, JPMorgan Chase and the Parable of "The Titanic and Eastland"
Confounded Interest ^ | 05/13/2012 | Anthony B. Sanders

Posted on 05/13/2012 9:24:40 AM PDT by whitedog57

The media is awash with stories about JPMorganChase’s $2 billion trading loss last week. Well, JPMorganChase earned $5.4 billion in Q1 2012, so they can handle a $2 billion trading loss.

Why the hysteria? Of course, there is concern over enormous losses biting taxpayers if a bank fails. But my concern is the hysterical reactions for political gain. This hysteria results in a “rush to regulation” rather than a measured response.

It is typical of our “Philadelphia” approach to regulation. Pick an immflamatory sentence and talk to people like they are 4 years old. The sentence is “JPMorganChase loses $2 billion in derivatives trading!” As a result, a call for MORE regulation (and punishment) ensues.

Regulation, Dodd-Frank and the Volcker Rule

Which brings me to the point that I made at the George Washington University conference on housing finance last week. The “rush to regulation” gave us the Dodd-Frank legislation and the Volcker Rule, both ill thought-out attempts at preventing another financial meltdown. But everyone conveniently ignored the fact that almost every country was experiencing a housing bubble that eventually burst (and some are still declining in terms of price). Clearly, there was more to the global meltdown that the creators of Dodd-Frank were willing to admit.

And no, the solution is not to capitulate to global regulation. If you thought the Eastland disaster was bad, wait for other countries to regulate our economy.

Be careful of the “rush to regulate” based on the “Philadelphia” approach to communication (and demonization). Overreaction to an incendiary headline can actually lead to worse outcomes.

Elizabeth Warren (aka, Big Chief Hiyataxa) leading the war party against Jamie Dimon. Funny, she doesn’t look Indian!

(Excerpt) Read more at confoundedinterest.wordpress.com ...


TOPICS: Business/Economy; Government; Politics
KEYWORDS: banks; dimon; levin; warren
I saw this on Zero Hedge. This guy hits the nail on the head. Watch Levin (D-MI), Trumka and Warren (aka, Big Chief Hiyataxa) use this JPMC $2 billion loss to lead a political witchhunt in an election year.

Should banks be regulated? Sure, but only if the government bails them out. But the was a global housing bubble that burst that Dodd-Frank/Volcker ignored. Can we stop systemic risk in housing? Fat chance.

1 posted on 05/13/2012 9:24:53 AM PDT by whitedog57
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To: whitedog57

Too big to fail or too big to manage?


2 posted on 05/13/2012 9:30:56 AM PDT by BipolarBob ("Oh no, I'm not sick, well I'm not physically sick anyway. Mentally I'm sick beyond any doctor's abi)
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To: BipolarBob

$2 billion is chump change to the spenders in the White House. Not even half a day’s work...


3 posted on 05/13/2012 9:40:16 AM PDT by Eric in the Ozarks
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To: whitedog57

Should banks be regulated? Sure, but only if the government bails them out. But the was a global housing bubble that burst that Dodd-Frank/Volcker ignored. Can we stop systemic risk in housing? Fat chance.


I believe that regulation is what caused the banks to fail, and it was done for the excuse of a need to regulate them even more than what they already are.

The same way with insurance companies, they should be regulated only in a manner that would just make dam sure they lived up to the contract.

It is up to the individuals to decide what kind of insurance they need and to read the contract just as it should be up to home buyers what they want and can afford to borrow and pay back to the banks.

I guess i am in a bad mood this morning, my wife asked me to go to the store and get some match light charcoal, well i don,t do much shopping so i just went in and got the last bag of it, a small bag, went to the check out and it was 10 dollars and some cents, i thought about taking it back but the cashier had already rang up my credit card so i kept it.

When i got back i told my wife that we could have used the cheaper charcoal and then I noticed she was feeding our Great grandson granola bars for breakfast, good but expensive as hell for two people who are now living on fixed income and pretty low income at that, well naturally i did not win.

What savings we have in the bank is going down, but hopefully we won,t live long enough to have to go on food stamps, that would be the last straw for me.

I realize this is just a small matter, but i wrote it to emphasize the need for us to get people in Government that has enough brains to know that some body has to pay for all of the stupid regulations on one hand and then on the other hand these people spend like drunken sailors, no disrespect for Sailors drunk or not.

We need to stop all of this crazy republican versus Democrat nonsense and vote for some body who at least has held down a few jobs in their life time and been in business for them selves so we will have some one who knows
how by nature a free people system operates.

We do not need some one who was raised on a sliver spoon, got everything they wanted given to them, never done a lick of work in their life, never held down a job, never been in business.

We don,t need them in the presidential office, we don,t need them in congress we don,t need them as Governor, we don,t even need them elected as sheriff.

We don,t need any one who has lived on any Government job most of their life.

Just say no to the dammed college trained politicians and get real on the job of hard knocks trained people.

Ok, i got that off of my mind so i will give it back to you.


4 posted on 05/13/2012 10:39:08 AM PDT by ravenwolf (reIf you believe that Nero was the anti-Christ, and among othJust a bit of the long list of proofsre)
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