Comments on: For Washington, JPMorgan’s big failure can be an opportunity http://blogs.reuters.com/christopher-papagianis/2012/05/16/for-washington-jpmorgans-big-failure-can-be-an-opportunity/ Thu, 18 Jul 2013 20:14:19 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: Acetracy http://blogs.reuters.com/christopher-papagianis/2012/05/16/for-washington-jpmorgans-big-failure-can-be-an-opportunity/#comment-35 Thu, 17 May 2012 14:37:48 +0000 http://blogs.reuters.com/christopher-papagianis/?p=33#comment-35 The shortcomings of the Dodd-rank bill are a direct result of the extensive lobbying by the banks during its formation and passage. Most of the financial institutions lobbying to water down any regulation spent more money influencing legislation than they paid in US Federal Income taxes. In other words, US taxpayers are footing the bill for Wall Street to continue its speculative behavior.

Volker is always pragmatic and realizes you have to work with what you have. A sudden change in today’s banking structure (downsizing, splitting up, etc.) would destabilize an already tenuous situation. However, Volker is absolutely on the right track that if you limit derivative trading and off-balance sheet use you are effectiely downsizing the size of these institutions and the risk they entail.

Frankly, having been on Wall Street for over 30 years, I think it is time that we completely rethink the use of derivatives and futures in our financial markets. No longer are these instruments used as a hedge (protecting your collateral) but as speculative bets on price directions of various asset classes. Furthermore, the leverage that is entailed in derivative trading and the lack of pricing transparency in non-echange traded derivatives is a recipe for boom/bust.

Most of Congress and the WHite HOuse do not understand the derivative market. Now we see that even the gurus of JP Morgan don’t fully understand these markets – and they are suppose to be the experts. However, the money from hedge funds and banks into the political coffers are clouding good judgement and any real regulation.

When the vast majority of voters are clearly behind regulation and controls on speculators, it is a clear example of how weak democracy is in the USA.

]]>
By: PseudoTurtle http://blogs.reuters.com/christopher-papagianis/2012/05/16/for-washington-jpmorgans-big-failure-can-be-an-opportunity/#comment-34 Wed, 16 May 2012 20:17:44 +0000 http://blogs.reuters.com/christopher-papagianis/?p=33#comment-34 Clearly, there is a need to protect society from these wealthy bankers who live in a world unto themselves.

Whatever it takes, force them to accept regulation and begin downsizing before they take us all down due to their unending greed.

]]>