After JPMorgan Chase's admittedly "stupid" trading bets that lost the company billions of dollars in just a few weeks, Congress did what it's supposed to do: it announced hearings that would allow lawmakers to get to the bottom of things.
Three weeks ago, we saw the first hearing, in which Senate Banking Committee Republicans, led by Richard Shelby (R) of Alabama, upbraided the Commodity Futures Trading Commission for not doing more to prevent this. Regulators explained that they still have limited powers in this area, but for GOP senators, this not only didn't matter, it was inexplicably used as a rationale to give agencies less authority.
If lawmakers gave regulators a hard time about JPMorgan's fiasco, surely they'd be apoplectic when JP Morgan Chase CEO Jamie Dimon appeared before the same committee yesterday, right? Well, not exactly. Consider this clip from last night's Ed Show.
Republicans on the panel didn't demand answers or propose solutions to prevent future disasters; they praised Dimon and sought his advice.
The moral of the story? Wall Street's bravado is apparently back -- if it ever really went away at all.
Jon Chait had a good piece on this yesterday.
The financial crisis ushered in a kind of transition period. Americans were in a purple-faced rage at an industry they more or less correctly perceive as having first destroyed the economy, then received a generous bailout and resumed making obscene money while the rest of the country suffered. The rage was strong enough to make politicians of all stripes leery of appearing close to the industry. That hesitation is what allowed liberals to pass the Dodd-Frank law -- just enough Republicans and moderate Democrats were frightened to be seen as carrying Wall Street water to force them to support a potentially serious reform.
Those days have clearly passed. Wall Street is still unpopular with the American mainstream, but GOP policymakers don't seem to care -- Republicans not only fawned over Dimon yesterday, Mitt Romney is assuring voters he'll eliminate pesky financial-industry safeguards if elected president, and replace them with nothing.
And why do Republicans do this? In part so they can benefit from Wall Street's generous campaign contributions, and in part because they plan to rebut any Democratic pushback by saying Dems are "anti-business" for criticizing the industry's recklessness.
It's quite a racket, isn't it?
The New York TImes editorial board added this morning, "A month after the trading losses were first revealed, Mr. Dimon has yet to offer a thorough explanation for what happened." That's just how GOP policymakers like it.
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The problem is that prison wardens all over the country have been extremely nervous about the potential for government over-regulation. The right has done its level best to allay those fears, by cutting payments to states for various services, and in general reducing the amount of excess time that Wardens have to spend worrying about such problems. I mean, prisons have locks, right? What else do you need?
You can't have a lot of extra guards wandering around the prison halls - What would happen if one of those guards got too close to one of the prison cells? The prisoner might be able to get his keys! You can't have guards making their keys availble to the prisoners!
That's Congress' job.
And if Democrats weren't incompetent, they'd understand how to leverage the public's disgust with all this. But Democrats are incompetent. Democrats couldn't break open a peanut with a hammer. And so, the country is treated to a nauseating fluffer act by Republicans on a financial porn star and they do it without embarrassment, without fear of retribution, and completely without fear of a backlash at the polls.
They used to. Not anymore the Americans have awaken and have taken to the streets. We won't be fooled again.
I am with you DisgustedWithItAll. The dems were useless.
Americans have awoke and took to the streets? When? OWS? Well, I'm all for OWS but frankly, at this point, that's been forgotten.
Seriously, you need to get out more. The Occupy Movement is in full swing. They're just not televising it anymore for political reasons.
A tough question may have cost the asker a large comapaign contribution.
A spine is worth at least a 1,000 votes isn't it?
The ad writes itself. I'm no expert, but what about: "Republicans. On the side of big oil (footage of BP hearings). On the side of big banks (footage of Dimon hearings). Democrats fought to pass tougher regulations on oil companies, to prevent future accidents like Deepwater Horizon. They fought to toughen banking regulation, and strengthen consumer protection so people no longer get ripped off by banks. (Close with image of Obama shaking hands with normal people.) Who's on your side?"
It's such an obvious, effective approach that I'm sure Democratic strategists have already thought of a dozen reasons not to do it.
I found the hearing eye opening. At first he starts off acting like your average businessman, then little by little you start to see his real self shine through. He starts out saying positive things about regulaton and Dodd-Frank and then with the help of his friends, the Publicans he gives them a little wink , a nod and a you know what I mean look. Boom, there it is ....pompous I am the greatest attitude. I am the richest man in the world. What I perceived in the interview was this, His clients are no longer the American Joe, he could give a rats' ass about your average person who has a bank account with him. He doesn't need our business. He holds peoples' banks accounts and thinks that's legal , it probably is in his bank because he makes up the rules or the business models whatever he wants to call them. He breaks the rules by acting like he doesn't know what's going on. He gave the okay for his investors to invest risky again they did and now he is trying to back peddle. He must give out personal information because how do other banks he works with get it? His bank is in competion with the other big banks in seeing how much of the United States can they buy and who can they sell it too. Like your house and mine. My house was probably sold to a Company in California who are now buying up foreclosed houses and using them as half-way houses. Another reason why they won't let you try and shortsell your home. They are done with the American people now, they're moving on oversees and they want all the Publicans in their back pocket. Or at least kissing his ....
Agreed, that he doesn't care about "your average person who has a bank account with him"
Whatever happened to the movement to close those bank accounts?
Whatever happened to Occupy Wallstreet?
Why aren't we occupying Congress?
And, Why aren't there heads on pikes?
(see Old France, below)
People are closing their bank accounts everyday. They have actually set up in banks a division in which creditors can petition the banks to hold peoples' accounts take their money leave and then say Thank you to the Bank for helping them. When the bank starts aiding other banks in taking their customers money, game over. On top of that they'll charge you a fee to do it. If people don't start taking their money out o banks the banks will start taking their customers money for them.
"The moral of the story?"
That we should have followed old France and said "off with their heads"! As people we all know that the immorality, greed and reckless disregard (along with deregulation) that lead to the collapse of the economy; the fact that the GOP led Congress is once again making excuses and toting water for them is yet another reason that they should be voted out of office! The other issue is that these CEO's act as though they walk on water because they know that they are TBTF and will be bailed out again - I say enough is enough time to put them all in jail!!
They started losing when they put profit before people or principal. No campaign ad is going to change that fact.
With voter suppression developing apace, unlimited anonymous campaign funds pouring in and mendacity now de rigueur what need do the GOP have for policy?
Why would the Senators question him? They all work for him.
It was more like cocktails on the veranda for them good times, remember? Chuckle, chuckle 'Why Demon, you jest." Do lunch? Why, sure You're buying, Chuckle, chuckle.
The web video writes itself: "Watch the Republicans Jurk Off Jamie Dimon"
heck, even politico noticed: "The JPMorgan CEO was treated, for the most part, like a friend among friends at his hearing."
Time for some CLAWBACK from Dimon and the jokers running the bad trades. Unfortunately, it's not so easy, as this sub only article in the WSJ explains.
Thomas Frank, author of "What's the Matter with Kansas?" and "Pity the Billionaire" had a compelling (and somewhat demoralizing) talk at the Commonwealth Club of San Francisco about the amazing turn of events after the financial meltdown that led to the latest "new" ascendency of the Right. You can find it here: http://www.commonwealthclub.org/events/archive/podcast/thomas-frank-author-whats-matter-kansas-and-pity-billionaire-12612
I think we've got the senate Caligula wanted.
You'd think the homophobic Republicans in the Senate would reserve the act for airport bathroom stalls.
The disconnect between reality and Republicans gets larger every day.
And alternate reality is winning.
Garbage input, garbage output: What did we learn from the questions asked? Better what questions could we have asked that would have resulted in those answers? It does not seem that we learned anything and even the questions failed to inform.
Let's try to explain the circumstances, the players, and frankly anything we may remember from the incident in question.
The huge bank JPM Chase lost 3 billion, using a complex trading method, with some like 300 plus billion in of accounts that have yet to be unwound, and we will never know the details, and we should be grateful for ignorance?
The hearing was held by the U.S. Senate, and had the largest number of Senators asking questions I can recall. This is was the same Senate Committee that for 3.5 years has fought a losing battle against the bankers and financial houses, to again separate the function of each, a separation that worked well enough for decades, but was lost in frenzy of irresponsibility that lead to the 2007/2008 crisis, a crisis that affects us today.
This august body, the U.S. Senate, has in its constitutional formation, rules that allow itself full unquestioned self-regulation. Thus was once historically sustainable because of the different character men of the Senate at the nation's founding, but in the several centuries since, self-regulation has given way to privileged self-interest, characteristic notable across all of human history to be prone to corruption.
That Senate for more than 100 years has either been manipulated by corporations, banks and financial houses or has done worse, as result the Senate is worth very little to benefit the citizens of the United States. Those citizens should have long ago modified the Constitution to make the Senate accountable to the voting public, but since the Senate cannot be expected to give up its power, its power needs to be curb and returned to the voter.
The Senate is self-regulated, and it passes laws that allow the banks, financial houses, and Federal Reserve to be self-regulated.
If you cannot see the problem with self-regulation then why even be concerned, and why not keep quiet?
The purpose of the hearing was to get to the bottom of a problem so large, that the information was not available, and may not ever be available hence using a complex trading method that cannot be undone. If that is acceptable in modern world of high speed transactions lasting an instant, where we can create nuclear transactions that cannot be recalled. Then we need different conclusion, not one that says, we can accept this technology and use it to solve problems, but one that accept the fact that we can create problems so fast that we have no control what so ever.
I am looking for that same power of self-regulation, and sure it will solve problems that can be solved and give up on those made impossible.
Jamie deftly handled the Dems idiotic questions. His bank lost $2 billion on these trades for a trillion dollar bank that normally makes $6 billion a quarter. So this quarter, JP Morgan will only make $4 billion - so what? The market punished the stock after the warning until Dimon started testifying with the stock up for the day. As he stated, the bank lost money with no money lost by the government, only by the shareholders.