1. Save 40-80% on great soccer jerseys. Shop today at BigSoccer Shop!

JP Morgan - A Nightmare on LOL Street

Discussion in 'Politics & Current Events' started by HouseHead78, May 14, 2012.

  1. nicephoras

    nicephoras BigSoccer Supporter

    Joined:
    Jul 22, 2001
    Location:
    New York
    As companies get bigger, so do banks. What, you think small banks are going to lend to Facebook?

    Yup, you're a real financial expert you. Never mind that mortgage backed securities are the way the US economy (and most advanced economies) have funded home purchasing for two decades now, and still largely do. Never mind that "accepting deposits" isn't actually how banks make money. Never mind that "lending money" isn't nearly as straightforward as you might think. Never mind that banks actually have to do something with the money that they hold. Never mind that banks do actually need to hedge exposures so that loans made to lenders don't crush them. Never mind all that - you don't need to know any of it. You just like the analogy, that's all that matters. Do you help run Occupy WallStreet?
     


  2. HouseHead78

    HouseHead78 Member+

    Joined:
    Oct 17, 2006
    Location:
    Austin, TX
    Country:
    United States
    Yup, you're a condescending prick. NO SHIT that all of the above is true. It's how it's managed and regulated that we disagree. I'm sorry your pet industry destroyed our economy. I really am. But I don't want it to happen again, ok?

    Now ******** off and die, you smug piece of shit.
     
  3. tomwilhelm

    tomwilhelm Member+

    Joined:
    Dec 14, 2005
    Location:
    Boston, MA, USA
    Club:
    Fulham FC
    Country:
    United States
    If by "small", you mean ginormous, but not so ridiculously huge that their mistakes can tank the entire economy, yes.
     
  4. Cascarino's Pizzeria

    Cascarino's Pizzeria Member+

    Joined:
    Apr 29, 2001
    Location:
    New Jersey, USA


  5. nicephoras

    nicephoras BigSoccer Supporter

    Joined:
    Jul 22, 2001
    Location:
    New York
    You don't know what you're talking about, thus you're left with insults. Are you mak9 in disguise?

    The problem with the collapse in 2007 was that everything was collapsing at once. One single bank wouldn't have taken the economy down. Banks have folded in the past without any problems. Oh, and beyond that, this particular loss that has everyone so excited has resulted in absolutely no effect. For a bank like JPMorgan, that has over a trillion (!!!!) in assets, a loss of $2 billion isn't an issue.

    Which has what to do with this thread?
     
  6. superdave

    superdave Member+

    Joined:
    Jul 14, 1999
    Location:
    Raleigh
    Club:
    DC United
    Country:
    United States
    Thank God I didn't do that, then.
     
  7. nicephoras

    nicephoras BigSoccer Supporter

    Joined:
    Jul 22, 2001
    Location:
    New York
    You did, actually, but hey, they're only words, right?
     
  8. Cascarino's Pizzeria

    Cascarino's Pizzeria Member+

    Joined:
    Apr 29, 2001
    Location:
    New Jersey, USA
    Just another "nightmare on LOL street", that's all. Nothing to see here.
     
  9. Wingtips1

    Wingtips1 Member+

    Joined:
    May 3, 2004
    Location:
    Tulsa, OK
    Club:
    Liverpool FC
    Your problem isn't the analogy (though it is off base), it is the fact that you have not an inkling as to how the financial markets work. If all banks were to accept deposits and then simply make loans and do nothing else, EVERY bank in the US would be considered "in a run" within the following three weeks, as they'd have no ability to pay the seventh grader coming in for a withdrawl on his savings account. If banks lent out all their money, how would depositors ever access their funds? Even your local community is participating in the inter-bank and repo markets in order to maintain liquidity. Beneath the 1903 version of banking you think should replace what we have, exists a world far larger than you comprehend.
     
  10. Cascarino's Pizzeria

    Cascarino's Pizzeria Member+

    Joined:
    Apr 29, 2001
    Location:
    New Jersey, USA
    Morgan Stanley played by the book in the FB IPO...technically at least

    JOBS Act
    The Jumpstart Our Business Startups Act, which became law last month, further relaxed restrictions on analysts who work for investment banks underwriting an IPO, said Jay Ritter, a professor of finance at the University of Florida.

    “Under the JOBS Act, affiliated analysts are able to jump in and talk to institutional investors,” Ritter said.

    Ken Sena, an analyst with Evercore Partners Inc., cut his 2012 revenue estimate for Facebook by 6 percent to about $5 billion after the May 9 filing, citing the social media company’s disclosures about users’ migration to mobile devices and ad-revenue growth.

    General Motors Co. (GM) announced two days before the IPO was priced that it would suspend advertising on Facebook, and the social network “was emphasizing” that its mobile revenue per user was lower than for desktops, Ritter said.

    “Any analyst who ignored that and kept the revenue growth rate estimates up wouldn’t have been doing a good job,” he said.

    http://www.bloomberg.com/news/2012-...ays-it-played-by-rules-in-facebook-s-ipo.html
     
  11. HouseHead78

    HouseHead78 Member+

    Joined:
    Oct 17, 2006
    Location:
    Austin, TX
    Country:
    United States
    You guys are astonishingly literal-minded. When I say a bank should go back to its core business, I don't mean it CANT DO ANYTHING ELSE.

    I'm not in as bad a mood as I was yesterday, so I won't go off - but suffice it to say that I grew up in a banking family and I understand how it works and especially how it fails. My childhood was spent watching banks fail because they took extremely stupid risks during a massive bubble - and it essentially destroyed an entire community. Luckily the problem stayed mostly local. I didn't go into the business because it's full of crooks and liars, and completely devoid of human compassion (like all businesses, but this one is particularly bad) - and I want to keep my soul intact.

    Please don't tell me what I know and don't know. We're speaking in generalities on a message board and I really don't see the value of talking about every single possible banking transaction and every ratio and defining what's acceptable and what's not from a risk perspective. My message is the same - federally insured commercial banks need rules to govern the types of risks they take or else we're going to end up in a ditch again.
     
  12. nicephoras

    nicephoras BigSoccer Supporter

    Joined:
    Jul 22, 2001
    Location:
    New York
    Oh, I see, your dad knows something about banks. Well great - you should get him to post then. And if you want banks to go back to their "core" business and reinstate Glass-Steagall, what exactly CAN they do except for make loans? That's literally all that's left - they can't prop trade, can't make markets, can't warehouse inventory, they can't underwrite securities. I guess they can offer FX trades - that's about it.
    You may claim all this knowledge about banks, but you're an ignoramus. If you follow the history of JPMorgan after the introduction of Glass-Steagall, you'd know that it massively declined as an institution (while it's iBanking spin-off Morgan Stanley grew by leaps and bounds) because it basically couldn't do anything. Its revival began with having access to the Eurodollar markets, since there it wasn't constrained by Glass-Steagall, but ultimately all the large banks were eclipsed because lending itself went by the wayside in favor of bond issuances (which banks couldn't do with Glass-Steagall). That's why JPMorgan was bought BY Bank One in the 90s.
    So as has been asked - what exactly should JPMorgan do with all its money?
     
  13. Cascarino's Pizzeria

    Cascarino's Pizzeria Member+

    Joined:
    Apr 29, 2001
    Location:
    New Jersey, USA
  14. nicephoras

    nicephoras BigSoccer Supporter

    Joined:
    Jul 22, 2001
    Location:
    New York
  15. Cascarino's Pizzeria

    Cascarino's Pizzeria Member+

    Joined:
    Apr 29, 2001
    Location:
    New Jersey, USA
  16. puttputtfc

    puttputtfc Member+

    Joined:
    Sep 7, 1999
    Did JPM seek taxpayer money for this loss? If not, I don't care how much they lose.
     
    Wingtips1 repped this.
  17. roadkit

    roadkit Greetings from the Fringe of Obscurity

    Joined:
    Jul 2, 2003
    Location:
    Fornax Cluster
    Country:
    United States
    Well, they could give me some of it.
     
  18. Cascarino's Pizzeria

    Cascarino's Pizzeria Member+

    Joined:
    Apr 29, 2001
    Location:
    New Jersey, USA
    'Cept they nearly brought down the world economy with their shenanigans just 4 years ago so the Banksters should be watched more intently than a 15 year old watches Kate Upton videos
     
  19. puttputtfc

    puttputtfc Member+

    Joined:
    Sep 7, 1999
    I did not know JPM could bring down the economy on their own. I was not a fan of bank bailouts but let's be honest all businesses lose money sometimes.
     
  20. nicephoras

    nicephoras BigSoccer Supporter

    Joined:
    Jul 22, 2001
    Location:
    New York
    JPMorgan didn't do that.
     
  21. Cascarino's Pizzeria

    Cascarino's Pizzeria Member+

    Joined:
    Apr 29, 2001
    Location:
    New Jersey, USA
    I meant "they" as in Wall St. banks. They cannot be trusted to do the right thing, ever, when maximizing profit (along with massive bonuses) is involved. I see no difference between them and Halliburton ruining people's drinking water with fracking. Over-regulate them and get tough on enforcement, which has been lacking since Bush took over. If they don't like it too f*cking bad.

    More on JPMorgan's bad bets and lack of oversight:

    The lapses have raised questions about who, if anyone, was policing the chief investment office and whether regulators were sufficiently independent. Instead of putting the JPMorgan unit under regular watch, the comptroller’s office and the Fed chose to examine it periodically.
    The bank pushback also suggests that JPMorgan had sway over its regulators, an influence that several said was enhanced by the bank’s charismatic chief executive, Jamie Dimon, long considered Washington’s favorite banker.

    Now, as regulators scramble to determine whether the chief investment office took inappropriate risks, some former Fed officials are asking whether the investigation should be spearheaded by the New York Fed, where Mr. Dimon has a seat on the board. Some lawmakers and former regulators also have reservations about the comptroller’s office, which is investigating the trade and was the primary regulator for JPMorgan’s chief investment unit.

    “The central question is why Jamie Dimon was able to so successfully convince both its regulators that there was nothing to see at the chief investment office,” said Mark Williams, a professor of finance at Boston University, who also served as a Federal Reserve Bank examiner in Boston and San Francisco. “To me, it suggests that he is too close to his regulators.”

    (snip)
    Long before the recent trading blunder, JPMorgan had a pattern of pushing back on regulators, according to more than a dozen current and former regulators interviewed for this article. That resistance increased after Mr. Dimon steered JPMorgan through the financial crisis in better shape than virtually all its rivals.

    “JPMorgan has been screaming bloody murder about not needing regulators hovering, especially in their London office,” said a former examiner embedded at the bank, adding, in reference to Mr. Dimon, “But he was trusted because he had done so well through the turmoil.”

    http://www.nytimes.com/2012/05/26/b...l=1&adxnnlx=1338066515-Wh6ZRvFEwhEyj2wsDcn01g
     
  22. JohnR

    JohnR Member+

    Joined:
    Jun 23, 2000
    Location:
    Chicago, IL
    MIT's Andrew Lo making sense on whether Morgan's trade violated the Volcker Rule -

     
  23. Cascarino's Pizzeria

    Cascarino's Pizzeria Member+

    Joined:
    Apr 29, 2001
    Location:
    New Jersey, USA
  24. tomwilhelm

    tomwilhelm Member+

    Joined:
    Dec 14, 2005
    Location:
    Boston, MA, USA
    Club:
    Fulham FC
    Country:
    United States
    Guarantee it'll be a positively Romney-esque non-apology apology.

    "We're sorry that the government thinks it should have a say in our business practices."

    Or somesuch...
     
  25. nicephoras

    nicephoras BigSoccer Supporter

    Joined:
    Jul 22, 2001
    Location:
    New York
    I don't think you understand what that expression means.
     

Share This Page