Hey, remember that banking industry we bailed out five years ago when they nearly torched the global economy by making reckless and almost insultingly irresponsible trades with our money? Funny story: instead of humbly apologizing for treating our economy like a casino vault to which they had the passcode, they've instead been...making the exact same jackass trades that got us here in the first place.
To wit, JPMorgan Chase just lost $2 billion in hedge trading over the past six weeks. $2 billion might not seem like a lot to you and me, but to banks it's a lot of money, especially when God and your mother and everybody else knows that hedge trading is what caused the financial collapse and thus you should probably not be doing it.
What's even more amazing: JPMorgan largely avoided the 2007 collapse by largely avoiding the exact types of risky trades that took down their competitors. Who knows what in the past five years caused JPMorgan to think, "Maybe everybody else was just doing it wrong?"
So, who could go for some nice banking reform? Congress has in fact been hard at work on the Volcker Rule, which would prohibit banks from using their own money for such risky bets (thereby taking the sense of urgency out of making them in the first place). In public statements, JPMorgan CEO Jamie Dimon has been extra-pissy about the Volcker Rule (and now we know why), but even he understands that he just gave the law's proponents all the example they need to sell the reform.
"It plays into the hands of a bunch of pundits but you have to deal with that and that’s life," Dimon said, partaking of that wonderful banker logic in which any example of capitalism going awry is somehow a trap set by capitalism's critics to perniciously discredit a perfectly good economic system. I mean, of course losing $2 billion just works out perfectly for banking critics.
But Dimon admits that not only recklessness but carelessness may have been in play. He did not know the full extent of the banks' losses until recently, and only then did he try a defense strategy. "With hindsight we should have been paying more attention to it," he said. "This not how we want to run a business." Nope, reckon not. So why do we continue to let him, and his cohorts, run them this way?
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