Even the grimmest fiction seems less depressing than many real-life news stories. For example, there’s that poor man in California who killed himself Sunday after a long, unsuccessful fight to avoid being evicted from his home by Wells Fargo, the “too big to fail” bank that had scammed him and his wife into taking out a predatory mortgage.
And the rash of stories about Wall Street creep of the week Jamie Dimon, who was reelected chairman and CEO of JPMorgan Chase Tuesday, at $23 million a year, despite the fact that his “too big to fail” bank recently blew more than $2 billion making the sort of derivatives trading bet that wrecked the economy a few years ago.
Then Dimon made a speech in which he scoffed at the notion that banks should be better regulated. Then Barack Obama, on some dumb-ass daytime TV show, skimmed over the $2 billion debacle and called Dimon “one of the smartest bankers we got.”
Nomi Prins of The Daily Beast:
Bank chairmen, like Jamie Dimon, will claim that regulation is too complex, too anti-competitive, and too un-American (putting U.S. banks at a disadvantage against other global banks). Yet, those arguments are exactly what led a cadre of bankers, an incoming and an outgoing treasury secretary (Larry Summers and Robert Rubin) and President Clinton to, in 1999, abolish the last remnants of the Glass-Steagall banking-reform act—making it fair game for banks to grow in size and complexity, plus engage in a bevy of speculative plays under the same roof as their FDIC-insured, Fed liquidity-baked deposits and loans. And that’s exactly what they did.
If you know you will be cushioned no matter how high you jump off a tightrope, and you’re getting paid to jump, you’re going to find ways to jump. Take away the tightrope, and you won’t jump. Resurrecting a true Glass-Steagall barrier is like taking away the net.
Update: Late today it was announced that Dimon will be “invited” to testify before the Senate Banking Committee to discuss JPMorgan Chase’s huge trading loss. This is according to Banking Committee chairman Senator Tim Johnson (D-SD), who said a hearing date has yet to be determined.