Here it is againMay 11, 2012 @ 9:01 am (Updated: 7:28 am - 5/12/12 )
JPMorgan Chase, the largest bank in the United States, said Thursday that it lost $2 billion in the past six weeks in a trading portfolio designed to hedge against risks the company takes with its own money. (AP Photo/Mark Lennihan)
Another bank bets on credit default swaps and loses -- this time J.P. Morgan-Chase.
CEO Jaime Dimon admits that bets made by one of his traders known as the London Whale -- who reportedly commutes to London each week from his home in Paris, wearing black jeans and no tie, and who until now has basically been able to print money for the bank -- he screwed up this time and lost $2 billion.
The bank itself is still making a profit, there's no indication it's going to fail -- but what's annoying, is to hear reports like this one from CBS's Rebecca Jarvis.
"If they fail, and I'm not suggesting that they would, but if they were to fail, we as taxpayers would be holding the bag so that they could bail out their depositors."
This means that yet again, a bank was using the money of its depositors to bet on the same kind of incomprehensible gamble that brought down the system in 2008. When, as you remember the ATMs would have literally stopped working if the government had not stepped in.
And CBS's Jill Schesinger points out Jaime Dimon is one of those CEOs who wants the government to leave him alone:
"When you have a guy like Jaime Dimon running around the country and saying, 'I think we don't need regulatory reform. We're better than those dumb regulators.' It calls into question all those comments."
I think THAT's the part that chaps most of us. If you want to take a risk that puts the London Whale himself -- or Jaime Dimon himself -- on the hook, so that they lose THEIR houses, and THEIR kids college tuition, go right ahead. But keep us out of it. If you're going to play these little prep school pranks, play them on yourselves.
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