Jamie Dimon must be furious! His minions f..ked up. His argument for weakening the Volcker Rule and other regulations just got quashed by the "sloppiness" of his own trading unit.
Maybe Bank of America is too big to be humbled by such a monumental loss, but this was just one trading strategy, supposedly to "hedge" risk of another trading strategy.
Why shouldn't banks be allowed to make bets with their own money? This's why. It's why Glass-Steagall, or something very similar needs to be re-enacted: banks should not be allowed to gamble; only trading companies, without individual depositors should be allowed to gamble like this--and allowed to fail.
Why would that make a difference? BOA wouldn't be so big if it didn't have millions upon millions of depositors, insured by FDIC. If BOA were to fail, because of further "sloppy" gambles, the whole financial system would again be in danger of implosion, a revisit to the disaster of 2008, but probably worse, since BOA is much, much larger than Bear Stearns, etc.
Why shouldn't the federal government regulate these combination banking and trading institutions? Why shouldn't it regulate to minimize risk of another collapse? Is it really good policy to allow these hybrid institutions to maximize risk for the whole economy?
The very fact that this is still a question, says a lot about our political economy. We have only recently climbed a little way out of the hole caused by this kind of financial speculation, yet the power of money is such, that someone like BOA CEO Jamie Dimon, strongly connected to that aforementioned collapse, still has the credibility to argue against increased regulation--and to be listened to, until his own institution proves him dramatically wrong.
The game our elites are playing is dangerous. Banks gamble with money; oil and gas companies gamble with our climate and our water. Isn't that what exploitation of Canadian tar sands, gas and oil fracking in the Northeast US and oil exploration in newly melting Arctic Ocean waters all represent?
They gamble with our future, not just financially and environmentally, but the future viability of US power. If the oil and gas companies have their way, not only will the seas rise by over 50 feet, according to James Hanson, but the US will be stuck in a dinosaur economy, when the rest of the world is racing to create alternative energy.
Maybe that's comparable to Rome's inability to adjust to the new cavalry-driven warfare practiced by Huns and Germanic tribes. For about two generations, the Romans were able to buy them off, buying their services--until they were driven into bankruptcy.
"Patriots," our drive to pump--and burn--even more hydrocarbons--and billions of dollars, will not only destroy the climate, it will bankrupt the Empire! We'll need an even larger military to protect our dependence on imported oil.
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