Second of all, I understand bupkis about the machinations of the financial industry. But that's the whole point, right? The bankster class, with its credit default swaps, proprietary trading, tranches and myriad arcana, likes it that way. The public has no idea what they're doing. Of course, the bankers probably don't either. But they possess things the non-psychopathic segment of the population does not: greed without guilt, reckless risk-taking, a grandiose sense of entitlement, government welfare in the form of endless no-interest loans from the taxpayer-funded Fed which they then relend to the public for their private profit .... And better still, little to no government regulations reining them in. And best of all, the revolving door between Wall Street and Washington that ensures that bankers will continue to own and control the entire country. And bestest of all, either no new laws criminalizing their bad behavior, or no enforcement of the laws already on the books.
For everybody else wondering why we should be mad at Jamie Dimon and his banking behemoth, here is an "Explainer" from Heidi Moore.
In his column today Paul Krugman calls for more banking regulations, while of course expecting no such thing to actually happen. Banker wankers have big egos and tiny memories and little to no capacity for self-reflection:
What did JPMorgan actually do? As far as we can tell, it used the market for derivatives — complex financial instruments — to make a huge bet on the safety of corporate debt, something like the bets that the insurer A.I.G. made on housing debt a few years ago. The key point is not that the bet went bad; it is that institutions playing a key role in the financial system have no business making such bets, least of all when those institutions are backed by taxpayer guarantees.
For the moment Mr. Dimon seems chastened, even admitting that maybe the proponents of stronger regulation have a point. It probably won’t last; I expect Wall Street to be back to its usual arrogance within weeks if not days.Yeah, and don't expect the Obama Administration to suddenly jump up and demand reform either. This was my comment in response to Krugman:
Last month, Treasury Secretary Timothy Geithner cavalierly announced in a speech that "you can't legislate away stupidity and greed and risk-taking and recklessness."
Well, actually you can. And the outrageous fact is that nobody in a position of responsibility even tried to untangle the devil knot that binds the mega-banks and government together.
I was actually pretty surprised to learn that Dimon is not only chief of his bank, he's also a chairman at the N.Y. Fed. How did that even happen? The foxes are guarding henhouses every place you look. They continue to steal our eggs with impunity. No new laws, no prosecutions, barely a few slaps on a few plutocratic wrists. No banker left behind.
The revolving doors between Washington and Wall Street continue to spin. They need to be slammed shut, pronto. Three years ago, people were too stunned to realize what was going on when the economy crashed all around them and they lost everything. Now, thanks to a plethora of books and articles and documentaries and the Occupy movement, the public is all too aware of the stupidity, greed, risk-taking and corruption.
Forget the watered-down, delayed, and defanged Dodd-Frank Act. As others have suggested, it's long past time to bring back Glass-Steagall. It worked for half a century once, it can work for another half a century again.
Just to clarify, Dimon is a director of the Class A board at the New York Fed, and the chairman and CEO of the bank itself. I had initially misread the N.Y. Fed listings and mixed up his various titles. But in any case, it essentially makes for a triple conflict of interest. (h/t to reader Bilal, who shared the above linked chart explaining the hierarchy.) Dimon serves in an advisory capacity at the Fed, elected by and representing his fellow bankers only. But make no mistake -- he wields an extraordinary amount of influence in the economic and government sectors. Elizabeth Warren wants him gone now. As far as I can tell, she is the only politician calling for his head. Or even for just a portion of his head. That speaks volumes on how soon we're going to see a stampede of politicians champing at the bit to reinstate Glass-Steagall.
15 comments:
Goddamn, girl!
You should be writing for the NYT, flushing the Brooks/Friedman/Douthat crap back down the hole from whence it came.
Masterpiece.
Brava!
S
Jamie Dimon once was Barack Obama's favorite banker.
How many people have a jaded view of Obama, but still regard him as preferable to Romney?
What they seem to fail to appreciate is “another layer of Obama’s deception, that his charm and unflappable demeanor mask his ruthlessness.”
So writes Yves Smith, “Barack Obama, the Great Deceiver,” @ naked capitalism
“Defending Obama as “the lesser of two evils” isn’t merely letting him off the hook for his betrayals. Those who take that position are actively enabling his conduct. They are part of the problem.”
http://www.nakedcapitalism.com/2012/05/barack-obama-the-great-deceiver.html
“But even when you put aside the relentless propagandizing of the Democratic hackocracy and the way Obama has systematically neutered critics on the left, a mystery remains: why has his image remained largely immune to his performance? … puzzlingly, Obama retains a peculiar ability to elicit Pavlovian responses from many of his followers.”
As Glenn Greenwald warned, “Obama is still a highly effective politician capable of exploiting people’s hopes and desires. When you combine that with the desire to believe — to feel once again that he will uplift people’s lives and that the hope one placed in him was justified and not misguided: nobody wants to feel like they were successfully defrauded — it’s an easy trick to repeat…that it’s a grand Manichean battle between Our Great Leader and Their Evil Villain — and there will be plenty of endorphins pumping through people’s brains. There will be enough to drown a large country.”
Smith writes, “The public has been told, again and again, the only choice is to hold your nose and select one of the two parties. It’s time we recognize that that myth no longer serves us. Those of us who care about decency, the rule of law, constraints on corporate power, civil rights, and economic protections for the downtrodden have become complacent, and we are now reaping the bitter harvest of our neglect. Many of these protections seemed so fundamental that there has been a tremendous amount of denial over the speed at which they are being stripped from us. But these gains were not granted freely or easily by those in authority. They came about as a result of long, persistent, difficult campaigns. If we want to preserve the rights previous generations fought hard to win, we have to make this battle our own.”
As RoseAnn DeMoro told Bill Moyers, “The current way we practice politics, we are headed for devastation. We have got to change ourselves. I'm not interested in the neo-liberal agenda. I'm not interested in bipartisanship. I'm interested in social change that actually puts society back with the people.”
http://billmoyers.com/segment/roseann-demoro-on-the-robin-hood-tax/
I concur with Suzan!
Also I've long held that Bankers should be required to wear a uniform which accurately reflects what they do instead of the $5,000 dollar suits which confer a sense of respectability and belies their criminal nature.
As such, the uniform which most closely matches the legerdemain and crooked gambling Wall Street Thieves and Banking Criminals engage in is that of the Yakuza.
Yakuza Diapers for every Banker and Hedge Fund Vulture.
@Karen--
I think that you are quite correct in your assertion that even the banksters don't understand what they themselves are really doing any more. As one commentator put it in an article to which I provided a link a thread or two ago, they are now “kids playing with dynamite.”
That wouldn't be so bad if they were the only ones to be blown to Kingdom Come when their schemes go awry. Some of us out here—myself included—would probably applaude the fireworks, Unfortunately, the banks are now so big that when they detonate, they take the rest of us with them.
The American financial system has simply become a giant casino, with the Wall Street bankers and our own elected officials being the only winners. The 99% are just suckers who have been lured in off the streets by the glitz, glitter and free drinks only to be fleeced by the 1% who play with stacked decks, loaded dice and rigged roulette wheels provided to them by the pols.
I am seeing more and more conservative commentators who seem to have come to the realization that more—not less—regulation is required on Wall Street, and that banks that are once again “Too Big to Fail” need to be cut down to size.
http://hotair.com/archives/2012/05/14/has-anything-changed-on-wall-street/
http://www.nypost.com/p/news/opinion/opedcolumnists/
break_up_the_banks_NoZue6C7k34jZqUcjnTzYM
But I have no confidence that Washington will heed this advice until we experience 2008—or worse—all over again.
As @Valerie and @Denis have said repeatedly, all this other stuff—gay marriage, “free” contraception, Fast & Furious, etc. —is simply Washington's attempt to divert our attention from America's lethal, systemic problems which Washington cannot—or will not even try—to fix.
There. Since I gave up all hope, I feel much better.
@Denis,
Well said! It is really disturbing to read the NYT comments and to see how many Democrats are not only falling in with the party line but actually are true believers - and they are so hateful if someone challenges their paradigm. I have actually read people who have said, if we re-elect Obama he will finally be able to govern the way HE wants to govern - for the people and with truly liberal values. I mean WHAT are these people drinking? Grape kool-aid?
@All
Obama or Romney, we can count on them giving the banks plenty of "get out of jail free" cards, access to 0% loans from the Fed, deteriorating regulation and FOR SURE another crash and bailout.
It doesn't take a rocket scientist to figure out that banks gambling with other people's money are going to make bad bets sooner or later. Like all gamblers addicted to the thrill of winning, they will take riskier and riskier bets on events they have little control over. Goldman Sachs must be having kittens right now with the Greek and French elections. Unlike America, the Europeans know that Iceland defaulted on its debt to private banks and is doing just fine thank you very much. Remember, the last time GS had to publically declare to their shareholders what they were doing, they were leveraged 5 trillion - a lot of that being betting that the European governments like Greece, Spain and Portugal would NOT default on their debt. I assume it is the same for the other too big to fail banks.
“This is an era of hypocrisy, when white folks pretend that they want Negroes to be free, and Negroes pretend to white folks that they really believe that white folks want ’em to be free, it’s an era of hypocrisy, brother. You fool me and I fool you. You pretend that you’re my brother and I pretend that I really believe you believe you’re my brother.” - Malcolm X
“What made Malcolm X so threatening to the white power structure [is that] he refused to countenance Martin Luther King’s fiction that white power and white liberals would ever lift black people out of economic squalor. King belatedly came to share Malcolm’s view. Malcolm X named the enemy. He exposed the lies. And until we see the corporate state, and the games it is playing with us, with the same kind of clarity, we will be nothing more than useful idiots.”
Chris Hedges: “Colonized by Corporations”
“Go ahead and vote this November. But don’t waste any more time or energy on the presidential election than it takes to get to your polling station and pull a lever for a third-party candidate—just enough to register your obstruction and defiance—and then get back out onto the street. That is where the question of real power is being decided.”
http://www.truthdig.com/report/item/colonized_by_corporations
_20120514//
I do believe, that Chris Hedges has written one of the best essays he has EVER written on Truthdig today
http://www.truthdig.com/report/item/colonized_by_corporations_20120514//
Oh, I forgot to say - LOVE the Banker Wanker tag! Wanker is pejorative of choice in Australia.
I see that Denis and I were on the same wavelength with the Hedges piece. I truly love that man! His thinking is so clear and he conveys his message with such a poetic voice. The last sentence Denis quoted says it all - Occupy!
Hopelessly Devoted
Jeffrey St. Clair and Joshua Frank have published a collection of 56 essays, “Hopeless: Barack Obama and the Politics of Illusion.”
http://www.amazon.com/Hopeless-Barack-Obama-Politics-Illusion/dp/1849351104
David Swanson: “While many others are still debating whether it would be appropriate to criticize or protest President Obama after a mere three and a half years of disaster, the people I have in mind have been openly and honestly resisting the latest Wall Street war monger since before he was elected.”
“There are two things that Obama is able to count on. First, no matter how seriously he attacks the interests of ordinary people, major liberal groups will support him. Second, no matter how much he supports the agenda of the right, major rightwing groups will attack him while demanding more. These two states of affairs feed each other. Attacks on Obama from the right are absolutely essential to generating his liberal support. Obama is the Not-Romney candidate. And that liberal support helps produce attacks from the right. Hopeless could help some to break out of this cycle of guilt or innocence by association.”
http://davidswanson.org/node/3679
Dave Marsh, author of Two Hearts: The Bruce Springsteen Story, reviews: “Like all Presidents, Barack Obama lied his way into office and betrayed his constituency even before he took the oath. Like most presidents, he proceeded to tinker with the policies of his predecessor, and where he did meddle, he often moved toward even more reactionary, repressive positions. There has been no president in my lifetime less inclined to budge from the monstrous center of standard American policies, foreign and domestic, no president more callous in dismissing the needs of citizens or more eager in advancing the aims of corporate thugs and military bullies. This book is a fitting tombstone for whatever promise his election seemed to offer. Read it and then get back to work building the decent America and civilized world he's done his best to prevent."
P.S. “The best initial review of our book Hopeless comes from Josh's mom, the resolute LaVerne, who said: ‘I think it's great that you and Jeffrey have a new book out, sweetie, but I'm still voting for Obama.’” - Jeffrey St. Clair
William Black, white-collar criminologist, author of The Best Way to Rob a Bank is to Own One, explains what happened at JPMorgan:
“Unless it is changed, the Volcker Rule will be essentially unenforceable, because you’re allowed, under the current draft, to simply call something a hedge, even though it operates in the exact opposite of a hedge. And voilà, this hedginess is OK, and the losses just mount up and produce the next disaster.”
http://www.democracynow.org/2012/5/15/crony_capitalism_after
_lobbying_against_new#transcript
Abigail Caplovitz Field, No, JPM Chase Didn’t Hedge Its Way To A $2 bn Loss:
“JPM Chase placed a huge bet that went bad, a bet that cannot be described as a “hedge” in any policy relevant way. JPM Chase was simply gambling for profit…Very specifically, Dimon oversaw a shift from hedging into profit oriented bets on corporate debt.”
http://abigailcfield.com/?p=1222
Via Atrios:
“In the years leading up to JPMorgan Chase’s $2 billion trading loss, risk managers and some senior investment bankers raised concerns that the bank was making increasingly large investments involving complex trades that were hard to understand. But even as the size of the bets climbed steadily, these former employees say, their concerns about the dangers were ignored or dismissed.
“An increased appetite for such trades had the approval of the upper echelons of the bank, including Jamie Dimon, the chief executive, current and former employees said.”
Yesterday, I heard Barry describe Dimon as "one of the smartest bankers."
Accountability is for the little people.
http://dealbook.nytimes.com/2012/05/14/warnings-said-to-go-unheeded-by-chase-bosses/?hp
As Atrios says, “They're gamblers who almost destroyed the world and will likely do it again soon. At which point they will be bailed out. Again.”
Banker Wankers.
Let’s give them more free money and cut their taxes.
The worse the stench from the abscess called Wall Street, the better the essays by Garcia, Hedges, Greenwald, Englehardt, Taibbi and a long blogroll of other gifted reporters and commentators. Like Dante, they wring more poetry out of hell than heaven. Or you can see them as our Greek chorus, forever ignored by the big players and the proles. By the time the republic is delivered feet first to the morgue of empires, there won’t be enough Pulitzers, Nobels and Payne awards to go around for the people who had it right and said it well.
I find Hedges’ most recent Monday morning diagnosis and prescriptions faintly encouraging. If you do vote, understand the practice nowadays – what with the choices available and the suspect counting -- is no more than a gesture in theater of the absurd produced by the uniparty. To avoid buying into the act that marks you as an enabler or collaborator, skip it, or vote third party. That’s the best ‘No!’ you can say to the past four years and the likely next four years. Then get back to the real business taking place in the streets.
We readers, we enlightened few, mostly old-timers with enough leisure to read up on the issues, may be moved by the power of words; however, it will not be fingers on keyboards and eyes glued to blogs that bring about the hoped-for corrective for the body politic, but millions of feet in the streets that get the moneymen to drop everything and retreat to their mansions.
As Hedges said, those who are strong enough to endure the trials of the street will be the ones who stop the rush into another Dark Age. If our tactics remain nonviolent, we can, eventually, win over the police and the military. They will depose the big fools and the sadists within their ranks. When a good proportion of the police and military come over to our side, it will be game over for the moneymen. On the other hand, if Wall Street falls following cycles of violence and counter violence, we’ll only end up back on square one with a different set of dictators.
Reading the best writers is at least entertaining, sometimes motivating. Voting third party this year is also easy, like most gestures. Can’t enough of us so-called enlightened readers settle on one gesture that tells the world there was a group who refused to back the charlatans who work, dine and sleep with the enemy? For me that gesture will be a third party vote.
Reading, voting gestures, good feelings -- tra-la-la. Reading is not resistance. Sad to say, neither is voting, anymore. In the final analysis everything depends on the size, nature and endurance of Occupy. Those nobodies have got the right stuff.
Maureen Dowd has joined the chorus of the Dimonfreuden (if that is even a word). My comment --
Last March, a group of New York priests and ministers (obviously not including Rev. Finn) marched into Jamie's Place and closed out their accounts. They were protesting the epidemic of bank foreclosures and other abuses against their poor (mainly minority) congregants. Then, they held a mock exorcism in an attempt to "chase the devil out of Chase." More here:
http://consumerist.com/2011/03/clergy-perform-exorcism-on-chase-bank.html
The devil is still there, but the ritual may have worked a miracle after all. Six months later, the Occupy movement was born, out of anger and frustration at the too-big-to-exist banks and the too-smart-by-half elected officials who enable and celebrate them. And now Jamie has finally been outed as not as savvy as he and his client/ president seem to think. The devil's still there, but as New York magazine writer Jessica Pressler puts it, there are plenty of people basking in "Dimonfreude" these days.
He who speaks fast and stumbles over his own words at the annual shareholders' meeting despite his $23 million reward is he who betrays a smoldering insecurity beneath his smarmy demeanor. What is the sound of arrogance crumbling?
Jamie Dimon is not only chairman and CEO of JPMC, he also has a seat on the Board of Directors at the same N.Y. Fed which regulates his bank. Talk about a triple conflict of interest! Actually, more like an unholy trinity. Exorcise away!
Meh! Krugman makes a case for Obama.
“there actually is a large constituency in America for a political leader who is willing to take responsible positions — to call for more investment in the nation’s education and infrastructure, to propose bringing down the long-run deficit through a combination of spending cuts and tax increases. And there is in fact a political leader ready and willing (maybe too willing) to play that role; his name is Barack Obama.”
http://krugman.blogs.nytimes.com/2012/05/15/thing-falls-apart/
Yves Smith @ naked capitalism awards Krugman the inaugural Eric Schneiderman Decoy Award for his post.
“Paul Krugman’s partisanship has become so shameless that we are giving him the inaugural Eric Schneiderman Decoy Award for his post “Things Fall Apart“. The Schneiderman Decoy Award goes for exceptional achievement in turning one’s good name over to particularly rancid Obama Administration initiatives.”
Smith asks, “Why is [Krugman] now starting to talk what sounds like austerity lite?”
Michael Hudson says Krugman is a conservative. “What worries me is that he has moved sharply to the “Rubinomics” wing of his party… I fear that Mr. Krugman is being drawn into the gravitational pull of Rubinomics, the Democratic Party’s black hole from which the light of clarity dealing with the debt issue and bad financial and legal structures simply cannot escape.”
http://michael-hudson.com/2012/05/paul-krugmans-economic-blinders/
“Unfortunately, Mr. Krugman’s failure to see today’s economic problem as one of debt deflation reflects his failure (suffered by most economists, to be sure) to recognize the need for debt write downs, for restructuring the banking and financial system, and for shifting taxes off labor back onto property, economic rent and asset-price (“capital”) gains. The effect of his narrow set of recommendations is to defend the status quo – and for my money, despite his reputation as a liberal, that makes Mr. Krugman a conservative. I see little in his logic that would oppose Rubinomics, which has remained the Democratic Party’s program under the Obama administration.
“Many of Mr. Krugman’s readers find him the leading hope of opposing even worse Republican politics. But what can be worse than the Rubinomics that Larry Summers, Tim Geithner, Rahm Emanuel and other Wall Street holdovers from the Democratic Leadership Committee have embraced?
“In fact, how can wage earners even afford to buy what they produce? The problem interfering with the circular flow between producers and consumers (“Say’s Law”) is not “saving” as such. It is debt payment. And unless debts are written down, the U.S. economy will shrink just as will the economies of Greece, Spain, Portugal, Italy, Ireland, Iceland and other countries subjected to the Washington Consensus of neoliberal austerity.
The revolving doors and conflicts of interest extend even further than what you've written today, Karen, and includes how these banksters and their outrageous actions are portrayed in the media.
Of course, corporate mass media would be expected to be sympathetic to them. But the links and kid-gloves treatment apparently extends even to at least part of PBS. Yesterday, I saw a portion of Charlie Rose's show, in which he and some others were "discussing" JPMorgan-Chase's two billion dollar loss from speculation. Rose and at least one of his guests, in the interest of full "disclosure", did announce that they personally knew and were friends with Jamie Dimon! Not surprisingly, the examination of Chase and Dimon was less than rigorous.
@Suzan: You certainly don't mince words! "... flushing the Brooks/Friedman/Douthat crap back down the hole from whence it came." is itself a masterpiece of succinct advice.
@all: I concur with Valerie, Denis, and Jay that Chris Hedges recent column was truly great, a must-read. I recently recommended it to my college-student niece. Unfortunately, it probably won't be enough, as she is surprisingly naive politically. Between the naiveté, the devotion to unfettered capitalism, and the even more reactionary sentiments loose in this land, I'm afraid that it may take a much more severe economic collapse before a sufficiently-large segment of the populace actually demands the changes that are necessary.
In baseball one swing of the bat can bring home four runs. I speak of a grand slam, of course. Until now there were few plays of such impact on the defensive side. Yes, there's the triple play, which requires much teamwork, but did you ever hear of a hurler single-handedly striking out three heavy hitters with just one pitch?
I just did, thanks to Denis. Yves Smith fairly dissed and whiffed three heavies with one sentence, this one:
"The Schneiderman Decoy Award goes for exceptional achievement in turning one’s good name over to particularly rancid Obama Administration initiatives.”
Krugman, OUT! Schneiderman, OUT! Obama, OUT!
Neat.
Post a Comment