Banking: Same as It Ever Was

Three years ago, JPMorgan Chase (NYSE: JPM  ) CEO Jamie Dimon addressed worries that his bank had too much exposure to derivatives. "The company manages those exposures name by name -- like a hawk," he said.

Last week we learned that those exposures blew up into a $2 billion loss -- a figure that will likely rise. So much for those hawk eyes.

Some background: Earlier this year, it became apparent that a JPMorgan trader was making a huge bet on derivative products tied to the creditworthiness of large companies such as Campbell Soup (NYSE: CPB  ) and MBIA. The trader was dubbed "the London Whale" because his bets were so large they moved the index they traded in. It appears these were credit default swaps -- an insurance product of sorts that promises to pay someone else if a bond defaults. If they sound familiar, they're the same product that sank AIG (NYSE: AIG  ) in 2008.

As the London Whale began moving markets, investors started pointing out the size of the trade to journalists, who ran with the story a few months ago. Dimon became defensive and irritated, in April calling the media attention "a complete tempest in a teapot." Yes, it was a big trade, but so is JPMorgan. "Every bank has a major portfolio. Obviously it's a big portfolio; we're a large company. ... It's our job to invest our portfolio wisely and intelligently," he said.

That was then. Last week, Dimon admitted that "we told you something that was completely wrong a mere four weeks ago." Hedge funds piled in on the other side of the trade, Europe stumbled, and now those derivative bets are hemorrhaging money.

Dimon, to his credit, has offered himself for self-sacrifice with an almost fanatical level of mea culpas. He admitted the company was "sloppy," "stupid," and "dead wrong." "In hindsight, the new strategy was flawed, complex, poorly reviewed, poorly executed, and poorly monitored," he said.

And to be fair, the losses (so far) aren't terribly large. Two billion dollars is a lot of money to most businesses. For JPMorgan, it's about five weeks of earnings. The company has $184 billion of shareholder equity. The division responsible for the losses manages $350 billion of assets, so the loss adds up to all of 0.57%. Even with leverage, this isn't show-stopping news.

Why, then, are we having a field day with the story?

Two reasons.

The loss "plays right into the hands of a bunch of pundits out there," Dimon said last week. Sure does. After the 2008 bailouts, anyone interested in banking has wondered why banks that are both implicitly and explicitly backed by taxpayers continued to be allowed to, for all intents of the word, gamble. And this was gambling, not hedging, as banks often like to claim. Bloomberg columnist Jonathan Weil explains it well:

The footnote on credit derivatives in JPMorgan's latest quarterly report says the company sold $3.16 trillion of credit protection as of March 31 and bought $2.95 trillion of credit protection on the same underlying instruments. ... In other words, on a companywide basis, JPMorgan was a net seller of credit protection last quarter -- to the tune of about $206 billion, up from $116 billion as of Dec. 31.

Here's what's important. There's nothing wrong with gambling. It's almost always regrettable, but to each his own. But JPMorgan is different. What happens when trading losses mushroom large enough to push the bank into the throes of death, like Lehman Brothers and AIG a few years ago? Since JPMorgan is a commercial bank, most of its depositors are insured from loss by the FDIC. Now, the FDIC is funded by fees levied on all commercial banks, so when a bank goes under, it's usually the banking industry, not taxpayers, that foot the insurance bill. But JPMorgan is so incredibly large -- it has more than $1 trillion of deposits -- that the FDIC's current $11.8 billion (link opens PDF file) deposit insurance fund couldn't come within a hair's breadth of covering the losses. Who would? You, the taxpayer, who would be on the hook for the FDIC's $500 billion line of credit at the U.S. Treasury.

It wasn't always this way. From the 1930s through the late 1990s, commercial banks were legally separated from the investment banking arms that engage in speculative trading. But that's no longer the case. Well-intentioned FDIC insurance designed for bland and vital commercial banking is now intermingled with reliably explosive gambling. A sensible patch for this regulatory flaw dubbed the "Volcker rule" has been watered down into irrelevancy, so the traders' heads-I-win-tails-taxpayers-lose system still exists. That's one reason why JPMorgan's recent losses are such a big deal.

Here's another. JPMorgan and Dimon are known as the industry's best of the best -- the best risk managers, the smartest minds, and the least likely to screw up. They're almost universally seen as different from those other hooligans. President Barack Obama endorsed Dimon by name. So did Warren Buffett. So does the market -- JPMorgan consistently trades at a higher valuation than most of its peers, highlighting its ability to sail through the financial crisis without much of a hiccup.

And yet! Despite being the best of the best, JPMorgan can clearly make disastrous, ill-informed bets that lose billions of dollars. Makes you wonder what kind of mayhem Citigroup (NYSE: C  ) or Bank of America (NYSE: BAC  ) are capable of.

Joe Nocera of The New York Times said it better:                                                                  

In his conference call, Dimon claimed that the disastrous hedging strategy had not violated the Volcker Rule. Rather, he said, it violated the "Dimon principle." By which he meant, I think, that it was an example of the kind of dumb risk-taking that JPMorgan usually avoids.

But that's just the point, isn't it? Even at a bank as ostensibly well-run as JPMorgan, the incentives still exist for giant, risky bets to be made that can go very wrong. JPMorgan can withstand a $2 billion hit, but not every bank can -- and who's to say that the next derivatives debacle won't be $5 billion or $10 billion?

While analyzing the 2008 financial crisis, Dimon once wrote to shareholders that the problem was simple: "bad risk management," he wrote. "This not only caused financial institutions to fail, but it also revealed fundamental flaws in the system itself."

Those flaws are alive and well -- and right under Dimon's nose.

Fool contributor Morgan Housel owns B of A preferred. Follow him on Twitter @TMFHousel. The Motley Fool owns shares of Citigroup, JPMorgan Chase, and Bank of America. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


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  • Report this Comment On May 14, 2012, at 4:03 PM, Bandit2237 wrote:

    My question is if banks are in sooo much dire straits right now, then explain to me why the he!! did they go through the stress tests a little time ago and they passed with flying colors.

    My guess is that all you people who are promoting this garbage, making the stock prices go down, are just trying to make a quick buck once the public figures out that everything is okay after all.

    Just my opinion or is it?

  • Report this Comment On May 14, 2012, at 4:18 PM, Bill292 wrote:

    Good article, but this is being blown way out of proportion by the mainstream media. Yeah they lost a half percent of their assets, I did too, today. Big deal, 5 or 10 percent, then we have a problem.

  • Report this Comment On May 14, 2012, at 5:29 PM, xetn wrote:

    In fact, the moral hazard of excessive risk taking by banks is still in play because they all believe they are TBTF.

  • Report this Comment On May 14, 2012, at 7:10 PM, mountain8 wrote:

    The % loss should be listed compared to either the brokers bet, or the amount he/she was looking after. How many brokers do they have? What if each lost .5% of the assets they are responsible for? Comparing it to the total bank assets is a nice way to make it look better, but not realistic to the situation..

    I thought gambling was illegal except on indian land or rivers (excluding Vegas, New jersey and Reno.) AND ITS GAMBLING WITH SOMEBODY ELSES MONEY. Not nice.

    Also, from all the media, including worthless hype, it seems the "bet" was so complex that even the broker didn't understand it. What ever happened to red and black?

  • Report this Comment On May 14, 2012, at 8:47 PM, TMFGortok wrote:

    Artificially low interest rates spur malinvestment. We made it worse by not letting bankruptcies occur. Now we complain because those that we bailed out are doing the same old thing again.

    Half the problem comes down to the money supply.

    The solution isn't to increase a web of regulations (that large companies will find loopholes in, and small companies will be unable to afford to implement). The solution is to let the market set interest rates, and allow bad businesses to fail.

    The opposition says, "But we'll have a financial crisis on our hands if we do that." We already do, we're just making it worse by not letting the market correct itself.

  • Report this Comment On May 14, 2012, at 9:22 PM, ynotc wrote:

    If we do not re-institute Glass-Steagal then in the future some nameless broker/trader will bring one of these to big to fail banks down and us with them.

    Think this can't happen? Think again remember Baring's bank and Nick Leeson?

  • Report this Comment On May 14, 2012, at 10:25 PM, garifolle wrote:

    Had the wheel turned just slightly different, this would have been a 2 billions wining trade, we would never have heard about it.

    Ms Ina Drew would still be there, she might have received an extra bonus, although 2 billions is no gig deal...

    Allow bad businesses to fail?

    I think that the markets and the governments do allow bad business to fail, it happens every day!

    If even Ford went bankrupt, I doubt it would be offered the bailout that it refused a few years ago.

    Your are talking of the banks?

    It is too late.

    The banks know that they won't be bailed out a second time, this is why they turn to big money making machines.

    They will accept only super rich clients, that will deposit only what they are ready to loose without making a big fuss.

    The only thing that should be made clear: banks playing those big gambling games should not be allowed to accepts deposit from "normal" people.

    Politicians forget rapidly, (especially if they get money for their election), but the banks, I can bet that they won't forget.

  • Report this Comment On May 14, 2012, at 10:59 PM, InvestWhatWorks wrote:

    If there was just a complete separation of the investment bank from the commercial bank, we wouldn't have to worry about investment losses or too big to fail. policies. The investment bank can make all the risks they want and succeed and fail based on their ability to make good investments. And the commercial bank can just continue on being a commercial bank.

    I know, I know. Easy for me say, when the major banks just got bigger after the crisis.

    While we all hold our breaths for that to happen, I'll just stick to investing in good regional banks, with far simpler to understand businesses (who hold deposits, make various loans and do little more than that). Not that JPM's losses were that great for a bank its size. I'm just more comfortable with the regional banks as investments (even if there wasn't this loss at JPM). I'm also more comfortable avoiding investments in the cross-hairs of politicians and regulators (especially in an election year, with the rhetoric revving-up).

  • Report this Comment On May 15, 2012, at 1:28 PM, ryanalexanderson wrote:

    > The banks know that they won't be bailed out a second time.

    Right. Unless, of course, they need to be. Because they're "TFBTF". Did I spell that right?

  • Report this Comment On May 15, 2012, at 2:03 PM, Darwood11 wrote:

    Gambling is fine, but these banks are using someone else's money.

    That is not "fine."

  • Report this Comment On May 15, 2012, at 5:10 PM, MrPecuniam wrote:

    Major problem wit the system is that if they fail on a derivative they get blamed for being careless. The moment they make money off of a derivative nobody dares to ask questions.

  • Report this Comment On May 15, 2012, at 6:26 PM, Stonewashed wrote:

    "JPMorgan and Dimon are known as the industry's best of the best -- the best risk managers, the smartest minds, and the least likely to screw up. They're almost universally seen as different from those other hooligans. President Barack Obama endorsed Dimon by name. So did Warren Buffett. So does the market -- JPMorgan consistently trades at a higher valuation than most of its peers, highlighting its ability to sail through the financial crisis without much of a hiccup"

    __________________________

    I absolutely get the vapors when someone says that. Our company had banked with Chase 35 years until about 2008. The quality of people they hired had deteroriated for about a decade. Their fraud department is a joke and if their debtors paid them like they pay their vendors, they'd have them thrown in jail. They are not only too big to fail, they are too big to give a dang about their own fiscal responsibility.

  • Report this Comment On May 15, 2012, at 7:36 PM, XMFWhatsmyoption wrote:

    Great article Morgan.

    I loved the Talking Heads title; I'll now happily sing 'Once In A Lifetime' all day long. http://www.youtube.com/watch?v=I1wg1DNHbNU

  • Report this Comment On May 16, 2012, at 12:28 AM, whereaminow wrote:

    "After the 2008 bailouts, anyone interested in banking has wondered why banks that are both implicitly and explicitly backed by taxpayers continued to be allowed to, for all intents of the word, gamble."

    The first part of the sentence answers the implied question.

    Let the banks fail. That's something that the governments (both state and federal) in America have been unable to tolerate since the country was founded.

    Many people believe that there was a time when free banking existed in America. Unfortunately, that has never been the case. In early America, banks were allowed to suspend payment to depositors (while being allowed to collect payments owed) in bad times. Laws limited the ability of banks to redeem claims from out of state banks, making it harder to keep banks honest (especially country banks, known as "wildcat" banks). The Republican Civil War government sought to nationalize the banking system by outlawing private bank note issue, which only led to more instability and more gambling.

    And of course, three different times, America has tried central banking. This time with the most expansive powers a central bank could imagine, coupled with guarantees for every depositor in America through the FDIC.

    What America has never tried, is to allow the banks to live or die on merit.

    So not only is banking the same it ever was, so is government and, sadly, American attitudes towards bank failures. Maybe this will all change one day. I certainly hope so.

    David in Liberty

  • Report this Comment On May 16, 2012, at 1:43 AM, phexac wrote:

    Too bad the link between $2B loss and JP Morgan going bankrupt is completely missing in this article. This is a sensationalist fear mongering piece without a shred of evidence of logical causality chain. But hey, hating on banks is popular this week, so let's jump on the bandwagon!

  • Report this Comment On May 16, 2012, at 2:27 AM, InvestWhatWorks wrote:

    @whereaminow

    I think it says a lot when President Obama said this about JPM (and the banking industry in general):

    "... we don't want you taking risks where eventually we might end up having to bail you out again, because we've done that. Been there. Didn't like it."

    It wasn't: 'We don't want you taking risks because we aren't going to bail you out again. We've been there and we're never doing that again'

    That should have been the response. But it is almost like President Obama didn't even consider the possibility of not bailing out the banks again. He doesn't want the banks taking risks because he knows the government (under either the Democrats or Republicans' leadership) will bail them out again.

    Don't take risks or else... or else... we'll go right ahead and save you for all of your troubles... guaranteed.

  • Report this Comment On May 16, 2012, at 2:59 AM, BBLBBD wrote:

    Anything would count as a "tempest in a teapot" if your position was confirmed, your bonus check was in the mail, and the proxy shares voted. Nothing to see here, folks. Keep moving. It's all cool.

    Two bill ain't nothing for that OG, but that loss be tied in to many gangsta who don't be ballin' like that.

    Right now, the only thing too big to fail is Dimon's head.

  • Report this Comment On May 16, 2012, at 6:50 AM, lesailes wrote:

    It's obvious that the Lehman failure did not get he message across to the free marketers. The same message that we learned long ago but seem to have forgotten: if banks fail everything, repeat everything, spirals out of control. It is that simple. It is not limited to any country or industry as failure of a single firm such as Ford would be, but would run across all the banks unhinging the entire economy.

    On the other hand we also refuse to act on that point and ensure that gambling and banking must be completely separate activities.

    I guess we are going to have to repeat the lessons learned in the (not that distant) last 100 years or so and suffer complete catastrophe before the legislators re-enact the laws passed as a result of those catastrophes.

  • Report this Comment On May 16, 2012, at 8:17 AM, devoish wrote:

    <<And of course, three different times, America has tried central banking. This time with the most expansive powers a central bank could imagine, coupled with guarantees for every depositor in America through the FDIC.

    What America has never tried, is to allow the banks to live or die on merit.>> David in Liberty, and the USA

    That's an interesting combination of thoughts.

    Personally I think that the banking industry could imagine the more expansive power of not having competition for retirement money by ending SSI retirement funds and forcing them into 401K's.

    I also think that many banks in America have died on merit.

    I would also suggest that surrendering control of the money supply to the private banks of the Federal Reserve was a pretty significant reduction in the size and power of the Federal government.

    Best wishes,

    Steven

  • Report this Comment On May 16, 2012, at 9:36 AM, whereaminow wrote:

    Steven,

    You can suggest that. However, that neither the intent of the Progressives and bankers that teamed to pass the Federal Reserve Act, nor has it actually happened.

    lesailes,

    "It's obvious that the Lehman failure did not get he message across to the free marketers. The same message that we learned long ago but seem to have forgotten: if banks fail everything, repeat everything, spirals out of control."

    When did we learn this lesson? As I pointed out in my post above, at no time in American history have banks been allowed to fail.

    Since there is no practical evidence that this has even been the case, what theoretical deduction leads you to this conclusion?

    David in Liberty

  • Report this Comment On May 16, 2012, at 9:05 PM, devoish wrote:

    The US Government has surrendered the authority to print money to the privately owned banks of the Fed Reserve.

    It happened.

    Best wishes,

    Steven

  • Report this Comment On May 16, 2012, at 10:24 PM, whereaminow wrote:

    I agree Steven.

    David in Liberty

  • Report this Comment On May 16, 2012, at 10:56 PM, seattle1115 wrote:

    For those suggesting that we ought to let the banks fail - suppose we did? Who would suffer?

    Would the executives suffer? Perhaps, but you'll pardon me if I doubt it. I strongly suspect that their posteriors are thoroughly covered.

    Would the shareholders suffer? Probably, and to the extent that those shareholders entered into the investment with their eyes open I'm okay with that. But of course, much of the capital invested in America's banks comes from institutional investors. People's pension funds are invested by professionals, and the folks whose capital is actually at risk have nothing to say about it. And if pension funds are lost through bad management at the banks in which those funds are invested, our society would have two choices - watch old folks starve in the street, or bail them out individually. I'm not sure I see how writing millions of (relatively) small checks to the impoverished retirees is more efficient than writing one big check to the bank.

    Finally, would the depositors suffer? To the extent that their deposits exceed FDIC limits, they certainly would. Likewise our communities and our whole economy.

    I hate the idea of bailing out the banks, but I hate the consequences of failing to do so even more. I much prefer the notion of imposing certain rules - reasonable rules, in my view - to assure that the problem doesn't arise again.

  • Report this Comment On May 16, 2012, at 11:11 PM, devoish wrote:

    David.

    So now what do we do?

    Seattle1115,

    Pensions are guaranteed. Poorly, but guaranteed non-the-less. http://www.pbgc.gov

    Pensions invested in stocks would still own those stocks whether the bank failed or not.

    Pensions invested in the stock of a failed bank would lose a portion of their investment. Less than 5%.

    The executives and every employee of a failed bank all the way up to the janitor would be bailed out by unemployment benefits. Just like any other taxpayer.

    Best wishes,

    Steven

  • Report this Comment On May 17, 2012, at 9:47 AM, whereaminow wrote:

    Steven,

    I agree with the Progressives who once said, "small is beautiful.

    Repeal Legal Tender laws, removing the monopoly in the production of money.

    Enforce contracts and prosecute fraud. If the government can't do that basic, fundamental task, then it isn't legitimate anyway.

    David in Liberty

  • Report this Comment On May 17, 2012, at 5:34 PM, Darwood11 wrote:

    The problem is, investors keep chasing yield. So they buy stock in the banks and expect to get rewarded. The banks, for their part, take significant risks to achieve that yield and also to reward the CEOs.

    If investors want to end this, they should put their money where their mouths are, and avoid bank stocks.

    Ditto for companies that don't generate jobs, or generate jobs in Chinese sweat shops.

  • Report this Comment On May 17, 2012, at 6:08 PM, devoish wrote:

    David,

    There is no monopoly in the production of money in the United States. We could trade drachmas if we chose. http://en.wikipedia.org/wiki/List_of_community_currencies_in... .

    Federal Taxes have to paid in dollars.

    Contracts and fraud. You know it is not that easy. People like you did not stand to defend the standards that define all contracts. You stood to destroy the standards that contracts were built upon.

    Best wishes,

    Steven

  • Report this Comment On May 17, 2012, at 7:44 PM, whereaminow wrote:

    Steven,

    Drachmas are produced in the United States?

    The US dollar is the only currency allowed to produced in the United States. That actually pre-dates the Fed, when Civil War Republicans outlawed private bank notes and centralized the banking system under the National Banking Act of 1863. (http://en.wikipedia.org/wiki/National_Bank_Act) That effectively ended any hope for free banking and started us on the path to total monopoly control, which is what Legal Tender Laws are for.

    The last person to produce a competing currency in the United States was thrown in jail. One hyperventilating statist prosecuting attorney called his actions "a unique form of domestic terrorism."

    Google "Liberty Dollars."

    I ask that you please do a little more research on this issue.

    David in Liberty

  • Report this Comment On May 18, 2012, at 3:13 PM, devoish wrote:

    <<BerkShares are a local currency designed and issued for the Berkshire region of Massachusetts. According to the BerkShares website,[7] residents purchase BerkShares at 95 cents (USD) per BerkShare from one of twelve branches of five local participating banks. Businesses then accept BerkShares at full dollar value, differentiating the business as one supporting the BerkShares values of local economy, ecology, sustainability, and community, and creating a five percent discount incentive for those using the currency. BerkShares can then be used by accepting businesses to purchase goods and services from other participating businesses, make change, pay salaries, or support local non-profits, increasing the local economic multiplier effect and keeping value recirculating in the region. If businesses have an excess of BerkShares, they may also be returned to a participating bank at the equivalent rate of 95 cents per BerkShare (i.e., charging no exchange fee).>>

    Your boy in the "Liberty Dollars" scheme made the money to look enough like US Dollars that it qualified as counterfeiting. It was certainly less than honest to do that.

    Regardless of his failed attempt and intention, alternative currencies exist.

    Best wishes,

    Steven

  • Report this Comment On May 18, 2012, at 3:17 PM, whereaminow wrote:

    I didn't argue that alternate currencies don't exist. Stay on target, Steven.

    David in Liberty

  • Report this Comment On May 18, 2012, at 10:08 PM, TomBooker wrote:

    Media stenographers are behaving like there is some reason to believe anything Dimon has to say about it, without anybody having watched the full position unwound. (Reported to have finished yesterday/

    With my limited knowledge of what is for all intents-and-purposes a prop desk, today was the first mention of the VaR-based Risk Management program which is used on every trading floor in The Big Houses. And the one for JPM's systemic risk on the aggregate of all trading floors in the company.

    They were broken. They know that now. So JPM is using a new version. Logical possibilities?

    Either they are sound, but give JPM less returns...

    Or, they are not 100% positive they are safe.

    My potential conclusions are based on JPM's geniuses, being geniuses. And they are.

    ..and if these new programs are "better", they would have been using them before they were forced to.

    Normal dynamic modeling for the Whale bet should have modeled in all potential volatility ranges, based on the VaR .. and thrown up major warning flags that a shift would be tremendously costly. There's nothing magic to this. Dimon himself pointed it out, it was an issue of pure change in direction, not magnitude of range or change..

    If you think "Banking: Same as It Ever Was"...here's some backlighting

    In the irony-and-here-we-go-again category....

    Matthew Zames is the new CIO replacement and he will be in-charge of $70Trillion in JPM derivatives , >$6Triilion credit based. (Confirm at DTCC if you so desire)

    The here-we-go-again part of this is that Zames is also Chairman of The Treasury Borrowing Advisory Committee. This is the group which is the Treasury/Geithner's main advisor for Debt-Flow Planning and Management.

    Now that Zames is going to be compensated directly for outcomes on credit-based derivatives, does anybody see any conflict of interest?

    (Please note: TBAC is instantaneously transparent. Minutes of the meetings are available to everybody within 1 hour of the meeting. Of course the book and transactions of JPM's prop desks.. er, sorry.. JPM"s hedging FLOOR are as pitch black as the dark side of the moon.)

    This is just a nice-to-have, if you have been self-investing long enough...

    The irony part of this is that Zames job prior to JPM was at....get ready... Long Term Capital Management (LTCM).

    I;m not lyin' because this stuff is too funny to make up.

  • Report this Comment On May 20, 2012, at 6:42 AM, devoish wrote:

    <<The US dollar is the only currency allowed to produced in the United States.>> David in Liberty, USA

    << I didn't argue that alternate currencies don't exist. Stay on target, Steven.>>

    David in Liberty, USA

  • Report this Comment On May 20, 2012, at 8:23 AM, skypilot2005 wrote:

    Morgan wrote:

    "Those flaws are alive and well -- and right under Dimon's nose."

    How can this be? Didn’t Barney Frank and his fellow Democrats fix this?

    Sky

  • Report this Comment On May 20, 2012, at 8:37 AM, skypilot2005 wrote:

    Wall Street contributed approximately $16 million to Obama in 08’.

    Last month, some of his biggest donors were from Wells Fargo, JPM and Goldman Sachs. I repeat JPM.

    This is needed “context” here. I. M. O.

    Unless, "It is still Bush's fault."

    Sky

  • Report this Comment On May 20, 2012, at 12:27 PM, TMFMorgan wrote:

    <<How can this be? Didn’t Barney Frank and his fellow Democrats fix this?>>

    No. Did someone ever say they did?

  • Report this Comment On May 20, 2012, at 2:50 PM, whereaminow wrote:

    Steven,

    I realize you are having trouble lately, getting caught in your own words, but don't but so dim as to confuse "produced in the United States" with "available within the United States" or with "recognized as legal tender."

    I know you desperately want to make up for your recent gaffs but this isn't helping.

    Stay on target, Steven.

    David in Liberty

  • Report this Comment On May 21, 2012, at 9:48 AM, devoish wrote:

    a : to cut or chop into very small pieces

    b : to subdivide minutely; especially : to damage by cutting up

    Best wishes,

    Steven

  • Report this Comment On May 21, 2012, at 11:32 AM, wasmick wrote:

    TBTF applies to many businesses in this country. Last I checked, being a large employer got you TBTF status with essentially no questions asked, that's how things work when the elected officials work for a) the companies that pay for their election and b) the people that elect them.

    We have the exact government we want and deserve.

  • Report this Comment On May 22, 2012, at 1:40 AM, tnk4800 wrote:

    nottom line it's absolutely insane to allow the banks to trade from the own account or for their clients or use money of the clients accounts.more especially now as the entire world is effectively experiencing a banker crises, then to claim the baks with the most money on the books are to big to fail makes the idea of allowing banks to trade derivitives as completely insane.Then to expect the tax payer to bail them out well thats just wrong, there shouldn't even be a discussion, just a vote to find the guilty and a hangmans rope waiting for them when thery return to there sell.

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