The news that JP Morgan Chase lost $2 billion and possibly more in derivative trading is shocking. Not that I did not expect this type of news to occur, but so soon after the financial crisis started four years ago? Really? While Wall Street is trying to kill or soften the Volcker Rule which was suppose to regulate such risky "investments"? This is like seeing your drug addict friends died and you go ahead to take the drugs yourself. We never did learn from the Savings and Loans debacle in the 1980's. But at least almost 30 years gone by before another big disaster hit. Now Chase is trying to do it again in 4 years, really?
I have said it before, derivatives are just legalized gambling. They are not investments. Hedge funds have made a lot of money but some have gone belly up also. Some of these are run or consulted by Nobel winning economists. But economists are not better at gambling than anyone of us. Otherwise they would be all going to Las Vegas. So pass the Volcker Rule without any loopholes please. Wall Street cannot police itself. As I have always said, capitalism is the best system but capitalism without regulations would be just greed and chaos.
Saturday, May 12, 2012
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A part of me thinks that heads should roll, but I don't think anyone is speculating that these "investments" will fail. The head of the fund is supposedly a veteran trader, so am I to think it's greed then?
ReplyDeleteI wonder why executives are even gambling, knowing that the world is watching.
What disturbs me most is that whoever gets the blame for this will probably have a nice golden parachute. I don't understand how companies can award failure.
Am I in the minority here, thinking that JP Morgan is not the only firm that will report losses due to these kind of practices?
What does Romney have to say about this, by the way?
-LBOAYM
You are right , one head did roll and she is "retiring". So I don't feel too bad for her. But it does feel like she is a scapegoat. How about her boss, Dimon? So far with the Wall Street mess, the only one big executive who went to jail was a South Asian. Now a woman takes the fall for this. You would think in an industry dominated by white men, the minorities and women are probably not the only bad people around!
ReplyDeleteI have not heard anything from Romney. Did you know that he went to Cranbrook, where he allegedly bullied a gay guy?
I always knew he went to Cranbrook. It doesn't matter much to me that he allegedly bullied one kid when he was young. It sounds like it was more a razing incident, where he and these other kids held the guy down and cut his hair.
ReplyDeleteI would think back in the day that long haired types at Cranbrook were looked down upon...more like hippies thank gays. Then it just happened to be that the guy was gay.
Unless there's a pattern here, I think it's not a big deal. What I have a problem is that he somehow forgot or did not remember the incident, which to me, is a red flag.
He is either lying or doing something like that was such a trivial matter that he thought nothing of it. I am thinking it's the former, and that's a huge snafu by him and his staff.
What do you think of Obama's magazine cover that called him the First Gay President?
I can understand the point they were trying to get across, but the phrasing is just poor, deliberate or not.
-LBOAYM