Skip to comments.Has anything changed on Wall Street? (After the 2008 financial system collapse)
Posted on 05/14/2012 8:30:02 AM PDT by SeekAndFind
Recently, Barack Obama has refrained from mentioning Dodd-Frank as one of his big accomplishments as President. That's fortunate, because had Obama used that as a campaign claim this month, the huge loss taken by JP Morgan and one-time Obama ally Jamie Dimon would have done serious damage. As it is, Politico wonders whether Obama might have a big problem convincing voters that he's done anything significant to address the underlying issues that created the 2008 financial-system collapse:
The giant $2 billion trading loss at JPMorgan Chase highlights a central problem in President Barack Obamas case for a second term: Four years after the financial crisis nearly brought the nation to its knees, very little appears to have changed.
No high-profile bank executives are in jail. Special multi-agency task forces to go after financial fraud and mortgage market abuses appeared in State of the Union addresses, only to issue a few news releases and mostly vanish from public view.
And now one of the largest banks in the United States, headed by a Democrat and operating with government guarantees, has turned in the kind of headline-grabbing, casino-style style loss that drives voters crazy and that Obamas financial reform bill was supposed to stop.
More than two years ago, before the passage of Dodd-Frank, Dimon had already begun to distance himself from Obama, thanks to Obama’s hostility toward Wall Street. Obama and Democrats rushed to woo Dimon and others back into the fold to get some fundraising for the midterm elections. The disaffection probably will insulate Obama from his connections to Dimon. Dimon hasn’t contributed much this year, which will also help, but it calls into question the usefulness of the very expensive Dodd-Frank reforms.
The problem with Dodd-Frank is that it didn’t address the core problem of the collapse and the perceived need for federal intervention — Too Big To Fail status. Instead, the bill imposed onerous burdens on all banks and financial institutions while ignoring the growing consolidation in the industry that triggered the bailout. It nibbled at the edges, with more disclosure requirements and credit burdens while leaving JP Morgan and other giants alone. Even the more onerous burdens of Dodd-Frank impacted the largest firms least, since the economy of scale allowed them to address those at lower costs than their competitors.
If JP Morgan doesn’t go under as a result of their loss — and it doesn’t appear they will — the headlines now probably won’t swing too many votes in November. If Obama and Tim Geithner have to intervene to rescue JP Morgan and Dimon, it will be a political disaster, and Obama will be lucky to break 40% in November. But if we want to seriously guard against Too Big To Fail and eliminate the need to bail out banks in financial crises, we need to go a completely different direction than Dodd-Frank, which all but guarantees a repeat of it.
“Has anything changed on Wall Street? (After the 2008 financial system collapse)”
Not a thing, not a thing in the free ride for the 15 trillion government fascist false market. Which is why essentials, fuel-oil, are sky high.
Their selection: The Mandate Man from Massachusetts.
Only the Germans are “callin-em” on it now.
The same people still own wall street and harvest the funds or the retired and other ignorant investors.
Let us not forget Lib darling Jon Corzine, who allegedly stole $1.6B in investor finds and faces zero prosecution from Holder’s gangster DOJ.
But the MSM dare not mention that the Federal gubment is losing
RE: So we’re all in a twist when JPM loses 2 Billion on one deal but is still plus 4 Billion for the quarter.
Actually there’s news that the REAL loss will exceed $4 Billion.
“JPMorgan losses are reported to be actually $800 million in Q2 with the potential for legal and other losses up to $4.2 billion over a longer period of time, possibly exceeding one year,”
That of course, is a drop in the bucket for a company whose revenue was close to $90 Billion in 2011 and whose ASSETS total (get this) : $2.2 TRILLION.
Dodd-Frank was never intended to solve a darn thing. It was only there to appear to solve these issues while making it harder for the "little guy" to succeed.
Oxley-Sarbanes and Dodd-Frank did absolutely nothing to prevent this exercise of hugely bad judgment. What they did do, was to address the wrong defects and to apply the wrong remedies.
No matter how “foolproof” any code of laws or regulations may have supposed to be, there is somebody, somewhere who can elude the safeguards and firestops, and bring ruin through the gaps and interstices. The original bills that set up the safeguards and prohibitions ought be re-examined, to determine why that approach did not work, then make the whole aspect of regulatory review open and transparent enough for human agencies to apply it both equitably and with some sense of impartiality.
That may be an impossible task. Common sense is not all that common a commodity.
bilderberg meeting/protests end of May 2012...
Nah. The sheeple are back to be sheared again and greed and fear are still the motivators. “If G_D did not want them to be sheared he would not had made them to be sheep”—Anonymous.
Sure, on days when pre-Obama the news of the day would have sent the DJIA spiraling and staying way down, it doesn’t.
Why should anything change? They have learned that they will be “bailed out” if they lose too much.
Simple concept. Federal Government bails out banks and does NOT force them to re-structure nor do they institute new rules or guidelines. Credit never makes it way down to small business and entrepreneurs who CREATE JOBS. Instead, the banks risk the money, going in and out of the market with it, sometimes with success, sometimes with failure. This creates artificial success in the market and when this bubble bursts, to use a quote from JFK to Pierre Salinger during the Cuban Missile Crisis, “Hold your balls”!