A Sea Of Red

Not sure if anyone on here cares but this JPM story has been irritating me lately.

For those who haven’t paid attention. A trader at JPM lost the company $2-3b on one complicated derivative trade. That's an unbelievable amount of money and understandable people are sensitive to banks losing large sums of money since much of the craziness of ‘08-‘10 escalated when Bear Stearns went belly up.

However one detail (that nobody seems to mention except a guest I caught on an NPR show) is that JPM had liquid assets (in their proprietary acct) of over $430b as of 1Q. So this loss amounted to less then 3/4 of 1% of the company’s liquid assets in its own trading account (no clients’ money was ever at risk). Before this JPM was considered one of the better run banks in the world and now the media is trying to act like management lacks control and the whole bank is toxic. I’m sick of people acting like financial institutions are the devil. Fire the people who screwed up because losing $2-3b will cost some people their job, but stop with the crazy all big banks are bad bit.
/rant

Who listens to NPR?

Other than that, you've spot on about the reaction, and correct.

I'd listen to Morning Edition on the way to school with my mom and All Things Considered on my way home from swim practice. On Friday's if we had to go out we would enjoy Afro-Pop Worldwide with Georges Collinet. I havent listened to NPR since I graduated HS though

jbock13 wrote:Who listens to NPR?

Car Talk, and that's all.

flamehunter wrote:

jbock13 wrote:Who listens to NPR?

Car Talk, and that's all.

In full disclosure... me too. But I download the podcast because tuning it on radio is beneath me

BJWilliams wrote:I'd listen to Morning Edition on the way to school with my mom and All Things Considered on my way home from swim practice. On Friday's if we had to go out we would enjoy Afro-Pop Worldwide with Georges Collinet. I havent listened to NPR since I graduated HS though

Grammar police here: your apostrophe lost its place and went from "haven't" to "fridays". Please anchor that thing in place better next time. Thank-you.
Have a great weekend, BJ.

jbock13 wrote:Who listens to NPR?

They give a different perspective to the news working with the BBC, especially nice to get for the international news. They had this expert on a news segment talking about the JPM bit and he was very reasonable. I like to hear the different angles and being that I live in Lynchburg I get plenty of the right without really trying.

Heck compared to some of you I am a flaming liberal

flamehunter wrote:

BJWilliams wrote:I'd listen to Morning Edition on the way to school with my mom and All Things Considered on my way home from swim practice. On Friday's if we had to go out we would enjoy Afro-Pop Worldwide with Georges Collinet. I havent listened to NPR since I graduated HS though

Grammar police here: your apostrophe lost its place and went from "haven't" to "fridays". Please anchor that thing in place better next time. Thank-you.
Have a great weekend, BJ.

lol...you too Flamehunter...

jbock13 wrote:Who listens to NPR?

Other than that, you've spot on about the reaction, and correct.

I liked the segment on Schweaty's Balls

I do catch the BBC occasionally

I'm still waiting on the day when there'll be a program to lower the payments of those of us who are ahead on our mortgages and never make late payments.

ATrain wrote:I'm still waiting on the day when there'll be a program to lower the payments of those of us who are ahead on our mortgages and never make late payments.

HA. Keep waiting!

Liberals believe banks need restrictions. Liberals dominate mass media. Therefore, presented with the opportunity to spin such a story in favor of their position on such restrictions, buoyed by the fact that $2B seems like a big number to most people, none of them hesitate.

NO CONSUMER'S MONEY WAS EVER IN DANGER!

Funny how that factoid is contantly ignored.

JK37 wrote:Liberals believe banks need restrictions. Liberals dominate mass media. Therefore, presented with the opportunity to spin such a story in favor of their position on such restrictions, buoyed by the fact that $2B seems like a big number to most people, none of them hesitate.

NO CONSUMER'S MONEY WAS EVER IN DANGER!

Funny how that factoid is contantly ignored.

In addition, you know what fact is not funny that is constantly ignored?

Using figures from 2011, the Federal Government spends $2 Billion roughly every 5 hours or so. About $800 million of that is money we don't have per se. Why is it that Americans aren't outraged over that?

JK37 wrote:Liberals believe banks need restrictions.

Do you not

From the class of 09 wrote:

JK37 wrote:Liberals believe banks need restrictions.

Do you not

The free market would work if the government got out of the way. There'd be no bailouts. And consumers would be smarter with where they'd put their money. It's not my fault if someone loses money. The fact that the government investigates those who lose money shows how far gone this country is.

The problem, is you assume the government knows better than the market.

jbock13 wrote:

From the class of 09 wrote:

JK37 wrote:Liberals believe banks need restrictions.

Do you not

The free market would work if the government got out of the way. There'd be no bailouts. And consumers would be smarter with where they'd put their money. It's not my fault if someone loses money. The fact that the government investigates those who lose money shows how far gone this country is.

The problem, is you assume the government knows better than the market.

This is where the two sides start to look crazy. The answer lies in the middle ground; stop acting like the free market is some magic pill. True monopolies are bad and unions were only formed because of the abuses of a free market. I’m not endorsing the left because they don’t have it right either (as shown by the JPM article) you have to allow a company to experience reasonable risk and reward (like JPM did in this case). However you can’t have Bernie Madoff lying about statements and returns (a place the regulators failed). It’s one thing to have a loss when the risk has been disclosed on the front end it’s another when what is described as a conservative investment is anything but.

If you need more examples of why we need some regulation go back and look at why the investment advisory acts of the '30's and 40's where put in place.

The answer for this one is going to be in the middle and probably be messy.

And that's why not all conservatives are libertarians. Government does need to do some stuff, within reason.

09, we simply can't agree I suppose. Today, the government creates monopolies. Sick of your cable company? Try switching. In most areas, you can't. Because the government chose for you who will win and lose.

LUconn, not to pick on you here because I know your position, but I've heard you say before "how many people would have to die before you regulated food?" or something similar to that. I'm not attacking you, I just want to use it as an example to 09.

But what corporation or producer has a vested interest and ensuring that the consumer who eats their product dies? Of course, that's nonsense. If fact, the company has every incentive for it not to happen. Most companies go above and beyond correct FDA standards, because they are outdated. Government does not know better than the private sector, and it's naive to believe they ever will. Government does not keep you safe from eating tainted meat. The private sector does, knowing if you get sick, you certainly won't buy their products again, and neither will your family. If a wrongful death occurs, we already have a legal system in place for that. 5,000 Americans die each year from food poisoning. And somehow, government regulations didn't stop this?

Consumer choice is the ultimate regulation, not the government. Government never has a vested interest in quality, but the private sector does. The purpose of the government, is to protect from illegitimate force and fraud. If for example Company A lies about an ingredient, the government should have to power, because it was fraud. Also, the consumer would now be skeptical of any claims that Company A may make in the future.

The free market is the ultimate regulator. If JP Morgan lost money, that's their fault. Buyer beware.

I would also challenge your assertions of unions and monopolies. Monopolies occurred because big business got in bed with government. Look at GM, Ford got screwed, because they weren't the favored ones. Government crushes competition and the free market, which leads to monopolies. Government does not break up monopolies, it grows them, because it drives competitors out the market place. Why does Phillip Morris and RJ Reynolds lobby Congress for restrictions and regulations on the Tobacco business? Because it will drive up prices for competitors who are not as large and cannot pay the costs of compliance. Therefore, Phillip Morris and RJ Reynolds retain their monopoly on the market, while Congress parades to their constituency on how they supposedly stuck it to Big Tobacco.

I don't know that I want a cost-benefit analysis to determine where the line is of how safe my food needs to be. Especially in a society where we're personally responsible for the production of bascially 0% of our food. But if my children die from mad-cow I can take solace in knowing that we have a legal system in place for follow up. Maybe I'll buy robot children with my reward. And the CBA already determined the food company saved themselves enough money to absorb their payout that they had to make to me. It's win-win!