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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsBill Moyers/Simon Johnson: Are JPMorgan's Losses A Canary in a Coal Mine?
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Bill Moyers: If Chase began to collapse because of risky betting, would the government be forced to step in again?
Simon Johnson: Absolutely, Bill. JPMorgan Chase is too big to fail. Hopefully in the future we can move away from this system, but right now it is too big. Its about a $2.5 trillion dollar bank in terms of total assets. Thats roughly 20 percent of the U.S. economy, comparing their assets to our GDP. Thats huge. If that bank were to collapse Im not saying it will but if it were to collapse, it would be a shock to the economy bigger than that of the collapse of Lehman Brothers, and as a result, they would be protected by the Federal Reserve. They are exactly whats known as too big to fail.
Moyers: I was just looking at an interview I did with you in February of 2009, soon after the collapse of 2008 and you said, and Im quoting, The signs that I see, the body language, the words, the op-eds, the testimony, the way these bankers are treated by certain congressional committees, it makes me feel very worried. I have a feeling in my stomach that is what I had in other countries, much poorer countries, countries that were headed into really difficult economic situations. When theres a small group of people who got you into a disaster and who are still powerful, you know you need to come in and break that power and you cant. Youre stuck. How do you feel about that insight now?
Johnson: Im still nervous, and I think that the losses that JPMorgan reported the CEO Jamie Dimon reported and the way in which theyre presented, the fact that theyre surprised by it and the fact that they didnt know they were taking these kinds of risks, the fact that they lost so much money in a relatively benign moment compared to what weve seen in the past and what were likely to see in the future all of this suggests that we are absolutely on the path towards another financial crisis of the same order of magnitude as the last one. ....................(more)
The complete piece is at: http://www.commondreams.org/view/2012/05/17
xchrom
(108,903 posts)Lochloosa
(16,063 posts)JHB
(37,159 posts)naaah, strike that analogy. It's more like the bankers get the nickles (lots of them) for each dead canary. That's why they paid to have the ventilation system dismantled. Because, of course, they're not the ones in the mine.
jwirr
(39,215 posts)criminals out going to make the government collapse? IMO it is time to let them fail. Break them up and bring back the old rules.
abelenkpe
(9,933 posts)Investigate and prosecute wrongdoing.
socialist_n_TN
(11,481 posts)I'd nationalize the banks and run them as co-ops for the people. Imagine an FHA or VA loan with no "for profit" middleman bank executive skimming off millions of dollars. Student loans with no profit motive involved. Small business loans for worker owned co-ops. The list of benefits would be priceless.
Of course then we'd have to change the political class too to more fully represent the ACTUAL people of this country.
Hey, a kid can dream.
snappyturtle
(14,656 posts)we are teetering on the edge......again.