Jun 6, 2012 - By Steven R. PeckIt's unconscionable for finance fatcats to try to laugh off a $2-3 billion fiasco
The $2 billion loss by investment banking giant JPMorgan Chase -- and some say it is more like $3 billion -- might affect the average Fremont County citizen in less than obvious ways.
Even if you've never had a bank account there, or have never taken a call from a broker there, or didn't refinance a home mortgage there, it's highly likely that JPMorgan Chase has had a finger or two in your personal finances.
It might be through a credit card, or a mortgage that was sold and resold to or by JPMorgan Chase, or a fund manager's influence in your mutual fund or 401(k) account, or decisions by JPMorgan Chase that affect your retirement fund.
If nothing else, the announcement last month that the finance gorilla has botched things up to the tune of a $2 billion (or $3 billion) loss sent the stock markets tumbling for a couple of days, and that had a negative impact on everything from your credit card interest rate, the future of your mortgage interest rate, even your local bank's confidence in making you a car loan. The global economy affects everybody.
It borders on the unconscionable, then, that so many people in the business community and Congress are trying to laugh this off as no big deal. In hearings Wednesday before the U.S. Senate banking committee, this line of attack was tried again. A billion here, a couple billion there isn't that important, said the fatcats.
The U.S. Comptroller of the Currency begged to differ, citing insufficient management controls at the industry level for conditions which allowed so much money -- investors' money -- to be lost.
The worry, of course, is that before long it won't just be investors' money that is being lost, but taxpayers' money as well if another big federal bailout is sought.
It looks as if JPMorgan Chase isn't in a deep enough mess for that to happen, thank goodness, but the incident and subsequent hearings also point out a fact that many Americans haven't caught on to, namely that many of the supposedly sweeping financial reforms enacted by Congress following the financial collapses of 2008 haven't taken effect while meddlers try to tweak and delay them under pressure from the huge banking interests.
If the reforms had been enacted, said U.S. Comptroller of the Currency Thomas Curry, then the latest JPMorgan Chase fiasco might well have been averted.
Regardless, say the uber-rich bankers, don't sweat $2-3 billion. It's insignificant.
Hearing that, it's hard to say which is more troubling about this huge loss, which affected millions of consumers. Is it that the banks are now so huge and so insulated that $3 billion truly doesn't matter, or that the American public is presumed to be willing to swallow "it doesn't matter" as an explanation.
Either way, something is wrong.
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