...JPMorgan Chase & Co. (JPM) (click here) Chief Executive Officer Jamie Dimon railed against higher capital requirements last year at the same time his bank was using derivatives to hedge more than $1 trillion of loans and bonds.
Those bets, which led to $2 billion of losses, wouldn’t have been necessary if JPMorgan did what banks once did: rely on bigger capital buffers rather than credit-default swaps to hedge against souring loans. One hundred years ago the equity of U.S. lenders was about 20 percent of total assets, compared with 9 percent now, according to data compiled by the Federal Reserve. For JPMorgan, it was 7 percent last quarter....
Fehrnstrom apparently has no earthly idea "how it works in a public market." Plenty of people who weren't investors in JPMorgan are harmed by this -- most notably you....
Anyone notice the envy Romney and friends have of President Obama? Fundraisers that have a price of $50,000 per plate and now a high end hangout for the next one. I do believe Mitt is the jealous type.
...Shifting Risk
Bankers at New York-based JPMorgan invented credit-default swaps, or CDS, in the 1990s as a way of reducing the capital financial institutions need to hold. The contracts require the seller to pay face value in exchange for the underlying securities or the cash equivalent should a borrower default, allowing firms that buy the swaps to shift some of their credit risk to third-party investors, at least in theory.
In the same decade, U.S. and European banks pushed to revise global regulations to let them reduce the capital they needed to hold against assets that their own models showed as less risky, such as top-rated mortgage-backed securities....
The GOP candidate for President shadows financial market blunders to cover their failures by minimizing the event. Why does that sound familiar, like "W".
This is a very stark example of how exactly Romney intends to play games with the American electorate while he allows all his Wall Street cronies to 'game the system.' There is no outrage, there is no ridicule, it is all MINIMIZATION of the event. Bush did the exact same thing and look where we are today!
I will go so far as to say Romney is simply a mouthpiece for Wall Street and can't begin to understand what a Credit Default Swap is. His experience is in salvage operations and that is a simple task and small potatoes compared to what Dimon is involved with.
...It was one of the dumber things the Romney (click here) campaign said this week and it's getting almost no coverage. On NBC's Today show, campaign adviser Eric Fehrnstrom said that the JPMorgan trading debacle was no reason to go and start regulating Wall Street banks. "The leadership of that company will be held accountable for this trading loss, but we don't want to punish companies," he said. "There was no taxpayer money at risk. All of the losses went to investors, which is how it works in a public market."
This is a very stark example of how exactly Romney intends to play games with the American electorate while he allows all his Wall Street cronies to 'game the system.' There is no outrage, there is no ridicule, it is all MINIMIZATION of the event. Bush did the exact same thing and look where we are today!
I will go so far as to say Romney is simply a mouthpiece for Wall Street and can't begin to understand what a Credit Default Swap is. His experience is in salvage operations and that is a simple task and small potatoes compared to what Dimon is involved with.
THURSDAY, MAY 17, 2012
Fehrnstrom apparently has no earthly idea "how it works in a public market." Plenty of people who weren't investors in JPMorgan are harmed by this -- most notably you....
Anyone notice the envy Romney and friends have of President Obama? Fundraisers that have a price of $50,000 per plate and now a high end hangout for the next one. I do believe Mitt is the jealous type.
Do tell, darling.
The exclusive location of the 95-room
Carolands Chateau, which is on the National Register of Historic Places, and
tickets running as high as $50,000 apiece aren't the only reasons Romney's political
foes are stirred up.
The former Massachusetts governor's
fundraiser is co-chaired by billionaire Meg Whitman,
his former employee at Bain Capital and the 2010 Republican candidate for
California governor who promised to produce 2 million new jobs if elected. Now
Whitman is CEO of Hewlett-Packard, which said last week it plans to lay off
25,000 workers....
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