JP Morgan's Regulatory Arbitrage of turning Financial Loss into Political Profit

Follow us @
http://twitter.com/laurenlyster
http://twitter.com/coveringdelta

Welcome to Capital Account. Bloomberg reports investors are worried JP Morgan is planning to pull back in the European mortgage bond market in the wake of the CIO disaster, causing significant volatility. JP Morgan is the biggest buyer of European home-loan bonds. Is this just one of many examples of how JP Morgan's reckless 2 billion dollar trading loss may be felt most by other people and firms, while JP Morgan could, perversely enough, actually be the firm to benefit most?

The numbers seem to indicate that when there is a crisis in the financial industry, there is a push towards more regulation. Our guest on today's Capital Account, ZeroHedge contributing editor Bob English, argues that the real problem is moral hazard and lack of personal accountability. Combine this with free money lent by the Fed, and you have an environment that is not only hospitable, but ideal for Whales like the one we saw in JP Morgan.

And former Goldman Sachs director Rajat Gupta goes on trial for insider trading today, while entire too big to fail firms arguably engage in this behavior as a matter of normal business by front running their own clients. Meanwhile, it is revealed that the same guy managing risk in JP Morgan's CIO was fired from a firm a few years ago for overseeing trading losses that resulted in a regulatory probe. So, despite billions of dollars more spent on financial regulation over the years, what are we left with? We'll talk about what's missing and why it will continue to fall short of preventing the next systemic crisis.

And the G8 summit came and went with leaders taking in a little soccer and signing onto a communique where a top mandate read: "Our imperative is to promote growth and jobs."...So, as they seemingly sign their names to more screwed up central planning, they do so against the backdrop of this history: in the US, for the first time ever, those who didn't go to college at all may officially be better off. We'll explain.

• Category

  News & Politics

[louis12346]

Lauren this guy is not Bob English, his real name is Tyler Durden

[awkwarddude]

And I must add: Lets say "poor" Demetri! He's the only guy on their program. It's really rough working with the stunningly gorgeous AND smart Lauren (and Shannon!). That's really rough duty, dude! Wanna trade places? Didn't think so! This is a fantastic program and a regular go-to for me to help me understand and get the truth about our financial crisis, and, of course, to watch Lauren and her gorgeous gams. Oops, did I just say that? Yup...Lauren, you ROCK! Don't ever wear slacks...

[sagemerynella]

Re: Loose Change segment - Job Market "... a degree in worthlessness." - absolutely Dimitri... and in deep doo-doo debt too! And workers mired in debt to the eyeballs are less inclined to mis-behave aren't they? Mis-behave? As in... go on strike, agitate, speak out, organize, etc. etc. Command and control... gotta love that direction...

[tonchibear]

Explain to me why someone with a IT degree should make more than a McD district manager. You also presume that the district manager doesn't have their own degree. And people think people in IT are snobby douchebags...hah!

[contrarianman]

Attitude on.

[tmayne220]

@sgapplebee we're gonna lock 'em up in the federal reserve!

[johnny771977]

I want to lick her legs.

[mike ruski]

Ahhhhh my daily doese of Lauren !!!! :-x