Listen to Ross and Burbank weekdays on KIRO Radio 97.3 FM
 Ross+Burbank


Here it is again

May 11, 2012 @ 9:01 am (Updated: 7:28 am - 5/12/12 )

cedargrove
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.

More Ross and Burbank

MyNorthwest.com - Purpose of Comments statement
Bonneville Media encourages site users to express their opinions by posting comments. Our goal is to maintain a civil dialogue in which readers feel comfortable. At times, the comments can descend to personal attacks. Please do not engage in such behavior. We encourage your thoughtful comments which: have a positive and constructive tone, are on topic, are respectful toward others and their opinions. Bonneville reserves the right to remove comments which do not conform to these criteria.

Comments (66)


  • Add A Comment

  • ron prevost wrote...
    With the brave, new world of Dodd - Frank
    May 12, 2012 6:58 am
    and all its ideas for reinventing home lending (like cube tires), Chase has been one of the worst enforcing their enlightened views (although those truths change weekly) on appraisers and the mortgage industry. .. Why WOULDN'T we expect Chase to reinvent the wheel for other forms of credit and banking ? ............ But, Dave - the Jaime Dimons of Chase not only think they are better than 'dumb regulators', they want to BE the regulators - not just for themselves, but for the entire industry. .. Must have kept some WAMU employees on after all.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • ron prevost wrote...
    by the way, that snark at the end of the post about..
    May 12, 2012 7:15 am
    'little prep school pranks' was a cheap shot. Why not say if banks are still not what they're 'cracked' up to be, don't 'blow' it this time bailing them out.? ..
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Chuck Gould wrote...
    Living by your wits is not without risk
    May 12, 2012 7:01 am
    The day will come when you are simply outwitted. When it does, the pain of loss needs to be restricted to (yet distributed among)those people who were in a position to prosper when the wit was winning. That would be the executives, managers, employees, and stockholders of the enterprise in question. That should not be some FedEx driver losing his house, some high school teacher out of a job while kids are combined into classes of 55, or some start-up businessperson unable to find any credit anywhere at any price. It should not be the taxpayers, extending billions of dollars in "bailouts" that are then quickly converted to multi-million "Performance Bonuses" and passed along to the executive half-wits who tubed the company.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • William Lawn wrote...
    OK ron, now in detail please
    May 12, 2012 7:16 am
    How Dodd Frank caused a rogue trader in London to bet and lose $2 billion for Chase.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • ron prevost wrote...
    Dodd - Frank didn't. Chase did.
    May 12, 2012 7:44 am
    Dodd - Frank DOES have some good provisions, like REQUIRING reporting of lender and appraisal fraud, rather than just ignoring it. . But it makes so many changes to home lending that big lenders think they can make even more changes - regardless. ... How this relates to this London Whale is ATTITUDE. Dave noted (or at least Jill Schesinger thinks) that Chase feels it is better than regulators. Once you have that ATTITUDE, anything is possible. ................. Neither Dood - Frank, nor Chase, CAUSED Whale Boy to lose $2B, but the point is that Chase's attitude made if possible.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • William Lawn wrote...
    So, the bottom line is that
    May 12, 2012 7:53 am
    Dodd Frank had nothing to do with this?

    Thanks for clearing that up.

    Ron, this was going on well before July 21 2010.

    We both KNOW that.

    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • ron prevost wrote...
    when WAMU was busted, we got HVCC, and this brave, new world
    May 12, 2012 8:01 am
    In the 1980's the S & L scandals. In the 1990's the Dot Com scams. Long, long before 2010. We have had land speculation scams and investment frauds for as long as we have had money. Whenever rules can be bent, someone will bend them. For fun and profit.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Paul Kersey wrote...
    hedging...
    May 12, 2012 7:37 am
    as he calculates the probable defeat of Obama, Dimon now says that he is "just barely still a Democrat".

    "Dimon is one of those CEOs who wants the government to leave him alone"....hilarious...he owns the government.

    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Realitycheck wrote...
    Just goes to show
    May 12, 2012 7:58 am
    Obama has done NOTHING to stop this kind of behavior and banks are ALREADY trying to do the same stuff again. You know what else that shows us? The unbelievable profit they made gambling with our homes and our jobs the first time around. They found the "candy store" and now they can't stay away from it. Only fools believe that they care about us average folks. They just try to milk us for the everything we got because they are set for live after the fraud anyway and quite frankly, the poorer and desperate we are, the more their millions in profits for each person can by in products and services afterwards. It is really the perfect way to be rich and powerful since nobody goes after them for the fraud.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Pressman wrote...
    Ya-
    May 13, 2012 12:02 am
    It's Obama's fault...
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Paul Kersey wrote...
    the puppets of Wall Street...
    May 12, 2012 8:29 am
    Since Obama has been President there has not been a single criminal charge filed by the federal government against any top executive of the elite financial institutions.

    U.S. Attorney General Eric Holder and Lanny Breuer, head of the Justice Department's criminal division, were partners for years at a Washington law firm that represented a Who's Who of big banks and other companies at the center of foreclosure fraud. Under Holder and Breuer, the Justice Department hasn't brought any criminal cases against big banks or other companies involved in mortgage servicing, even though substantial evidence has surfaced of criminal violations in foreclosure cases. The evidence, including records from federal and state courts and local clerks' offices around the country, shows widespread forgery, perjury, obstruction of justice, and illegal foreclosures on the homes of thousands of active-duty military personnel.

    While Holder and Breuer were partners at Covington, the firm's clients included the four largest U.S. banks - Bank of America, Citigroup, JP Morgan Chase and Wells Fargo & Co - as well as at least one other bank that is among the 10 largest mortgage servicers.

    Covington is involved with Virginia-based MERS Corp, which runs a vast computerized registry of mortgages. Little known before the mortgage crisis hit, MERS, which stands for Mortgage Electronic Registration Systems, has been at the center of complaints about false or erroneous mortgage documents.

    Court records show that Covington, in the late 1990s, provided legal opinion letters needed to create MERS on behalf of Fannie Mae, Freddie Mac, Bank of America, JP Morgan Chase and several other large banks. It was meant to speed up registration and transfers of mortgages. By 2010, MERS claimed to own about half of all mortgages in the U.S. -- roughly 60 million loans.

    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Pressman wrote...
    Yawn...
    May 13, 2012 12:12 am
    Next! what?, the same old same old? Gee, you mean to say that one party is all bad, and the other party all good? Darn, if we could just get all Republicans, or Democrats, running things, oh how sweet it would be !! Corruption, and insider trading, and rigging the tax code, and sweetheart deals for the people who give money for the re-election of the w*ores they support, all of this will end- because your side won...ya, you betcha...
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Hayduke wrote...
    You right wingers are unbelieveable.
    May 12, 2012 8:41 am
    You scream about government overreach and the so-called "free market," and in the next breath you go after Obama for supposedly doing nothing about the shenanigans on Wall Street.

    If you don't want Dodd-Frank, the Volker Rule, Glass Steagal, or anything else you perceive to be government interference in what business supposedly knows is best, then what the eff DO YOU WANT? What solutions can you offer to help ensure taxpayers are left holding the bag again for the banksters, other that bashing Obama?

    Wake me when you have one. Me, I'd like to see these guys who steal billions do the same kind of hard time a someone who robs a convenience store That'll put a stop to this, real quick.

    Oh, and can someone please explain to me again why Jamie Dimon deserves that salary and bonuses of his, and why he still has a job?

    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • ron prevost wrote...
    Hey, Duke
    May 12, 2012 9:00 am
    No one up to YOUR post (except Paul Kersey ?; maybe ?) put ANY right/left slant on corruption or greed. This all started long before the Land of Oz, and no one expected Obama to personally eliminate greed and fraud. ... But how about you don't automatically tune out anything smelling of 'right wing' to defend your leader. ...... Your brush here is so wide that you might even paint DAVE a 'right winger'.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • El Duderino wrote...
    False Choice
    May 12, 2012 9:13 am
    We "right wingers" aren't anarchists. If there is a crime committed, well, we'd like it to be investigated and put through the legal process. This is a separate issue from the fact there are too many laws. The problem is selective enforcement --- the so called little guy with no political clout and/or connections gets sent to the cleaners while the big bankers and other big businesses get a free pass.

    This is crony capitalism, where there is ostensibly a free market, but in reality elected and unelected officials bend the market to their friends and those who line their pockets.

    I think most conservatives would like to reenact Glass-Steagal and prevent banks from gambling with federally secured deposits.

    I think we all agree that thieves of billions should do hard time, like Corzine. But with his connections he'll never even get indicted.

    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Paul Kersey wrote...
    What is not unbelievable...but very predictable
    May 12, 2012 9:40 am
    Is the Pavlovian reactions when dealing with members of any cult. Any criticism from outsiders against the leaders of the cult, to the cult follower, no matter how much evidence is presented, always elicits the same reaction. The cult follower will not attempt to argue with the evidence presented but will instead attack the outsider presenting the evidence. Many times the reaction is violence, as was the case in the Jonestown socialist experiment.

    Hayduke is one of those followers who will willingly step up to the Kool Aid barrel before he will ever be able to admit that he has been had.

    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • William Lawn wrote...
    Paul, do you have a bad movie analogy for that?
    May 12, 2012 11:40 am
    Romney will do differently? Somehow HE will stand up for the middle class?

    Yeah, the US is just like Jonestown.

    Yeah sure it is.

    I think you are stepping up to the LSD barrel.

    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Paul Kersey wrote...
    Willie, that was one of your more childish comments
    May 12, 2012 1:25 pm
    I provided some evidence that shows that Obama, Holder and the rest of this gang of criminals will do nothing to protect us from their cronies on Wall Street. They are the highest law enforcement officers in the land and they serve only themselves. Instead of addressing those cold hard facts, you come back with such a childish response as that?
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • William Lawn wrote...
    Yeah, evidence Paul
    May 12, 2012 5:08 pm
    Cults, kool aid and Jonestown.

    Evidence.

    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Paul Kersey wrote...
    so you're back in that bar
    May 12, 2012 6:51 pm
    with your drinking buddies huh? The one you couldn't get out of fast enough? I knew that you couldn't get back fast enough. It's in the Castro, right?
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • William Lawn wrote...
    It is nice that you so vividly remember my posts, Paul
    May 12, 2012 7:13 pm
    Castro? As in San Fran? So you are implying I am gay? And that would, somehow, demean me if I was?

    You know Paul, that fireman who can't spell does that too. Calls me gay (some nonsense about the Sausage Fest, I have NO idea!) and assumes that would make me lesser than he. Assumes it is an insult.

    I've assumed you were a little more intelligent.

    I'll not make that same mistake again.

    Sexual orientation has never been a big indicator of intelligence, in my experience.

    How about yours?

    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Paul Kersey wrote...
    oh...oh
    May 12, 2012 8:26 pm
    Get that RV parked in a safe place and take whatever it is you take. Tomorrow won't be any better.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • William Lawn wrote...
    That is it?
    May 12, 2012 9:24 pm
    A pretty pathetic whimper, Paul.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Pressman wrote...
    Amen
    May 13, 2012 12:14 am
    Amen...
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • mobeta wrote...
    Hayduke
    May 15, 2012 4:31 am
    I could stop this immeidatly, when a banker/ponzi scheme, hedge fund manager, DOJ or any other person who takes advantage of whatever it is and it is unlawful, you take all of their money away period including their family if funds were distributed to them in any form. If you hurt them financially in the worst way, you would see this go away BUT we DON'T. Paul's got it right, we do nothing and they usually walk away/retire with a heck of a pension of some kind of reirerment package that makes tax paying AMericans go crazy. Folks, we are getting fleeced more than ever before and we are going down because of it.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Fuego wrote...
    The drive for fat profits
    May 12, 2012 9:35 am
    Is the engine behind this gambling. The banks aren't making money lending money at 4 percent. The only way to sustain the high salaries of the execs is to gamble with derivatives and such. Long gone are the days of George Bailey and his savings and loan.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Citizen of Krazy Town wrote...
    "prep school pranks"? Dave, did you REALLY just try to tie JPM to Mitt Romney?
    May 12, 2012 9:44 am
    Or did someone give Luke the editorial keyboard again? Because that is the kind of cheap shot I would expect from him. I thought you were better than that.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • rational wrote...
    Why shouldn't they take stupid risks?
    May 12, 2012 10:27 am
    The goverment has already determined that they are too big to fail and likely feel they will be bailed out if they get in serious problems.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • { "Thumbs Up":"1","Thumbs Down":"-1" }