It is, it really is. For example, If people without sight wear sun glasses, why don't people who are deaf wear ear muffs? Or in a negative sense, if the nearly a dozen governmental agencies who now have responsibility for the safety and credit worthiness of our banking system are serious about their mandate why do they keep taking actions that are certain to damage individual institutions or the entire system in general. I give you the curious case of J.P. Morgan Chase.
Now we all know Jamie Dimon who was up to a few short months ago spoken of in hushed, reverent terms as possibly the greatest banker who ever lived. Jamie was never that but he is hardly the dim wit that his portrayal today labels him. And whilst Morgan never was possessed with a "fortress balance sheet," it is hardly the dangerous, ill managed institution that it is being forced into admitting. All of this stems from the saga of the "London Whale, the head of a derivatives trading team working for the bank's internal investment office who got a big trade the wrong way around and like traders have done over centuries fell in love with his position, doubled down and when jilted for a second time doubled down again trying to make it back while all the time concealing his love affair from his boss. Truth will out is the old saying, and it did with disastrous consequences for all concerned including our friend Jamie, who, not knowing the full extent of the loss did what Jaime was always prone to do and got his mouth working ahead of his mind. "No big deal" he proclaimed of a loss that finally came to light as being somewhat north of $6 billion a position which put him at odds with most of the people in the world save for Carlos Slim and Warren Buffett.
Enter, stage left, the SEC led by the new head honcho, Mary Jo White formally of the Justice Department's Second Circuit, a small, brilliant and incredible successful former prosecutor of white collar crime. Following in her wake, like a school of Remora, came every shape and form of regulator types looking to collect creds from whatever chewed morsels might fall fall from Mary Jo's mighty maw. You see Mary Jo just wasn't in the business of slapping wrists and collecting a few bucks in fines; oh no. The new game was to get the perp to admit to wrong-doing...I mean we gotta have us a Bang the drum slowly moment!
When I was in law school a professor of mine gave me a bit of sage advice. He said the scariest thing I would ever see in my live would be the heading on a piece of paper that said
The United States of America
vs.
Charles James
"You don't want to ever see that," said he. "Just think of the power and might and money arrayed against you." That goes for corporations as well So, it appears that J.P Morgan & Co. will agree that they were wrong, that they knew they were wrong and will settle for about a billion bucks in order to avoid a trial. Huzzahs all around and the legend of Mary Jo lives on. We got the bastards! A new era dawns!
Of course what happens, now having admitted wrongdoing taking one of the major obstacles to law suits off the table, JPM will be visited by Sue Grabbit and Run, Gonif Gonif and Dreck and every other member of the plaintiff bar, all working on contingency fees, with every possible variation of class action suits that can be conjured up in the fertile minds of trial lawyers which JPM will either have to defend or settle. Call me curious and confused but I'm having trouble figuring out how tying up this company for 25 years in law suits makes for a better banking system. I can't seem to understand how giving the Whale immunity in order for him to testify against a couple of guys who worked for HIM gets us to a better banking system. Nor do I get how the shareholders, who have already lost about $7.5 billion are going to be better off with this approach. Doesn't it seem better to incarcerate the highest ranking individuals in the institution if crimes were committed? THAT gets people's attention and influences future actions. Of course that's hard to do. You really have to prove stuff.
Anyway, I'm sure there is joy on Capitol Hill over all of this, with Uber Idiot Lizzy crowing how it takes a woman to get thigs done. I'm sorry for the rant but the politics that has overtaken reason is getting to me. When harm is done in the name of good I get a bit irrational. Sun glasses and ear muffs all around.
Carter: I'm so confused I didn't get the question. Explain please.
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