I wrote a few weeks ago that the big Trading Banks will be no more. I do not believe they will be able to get a bailout again like they did. They may try to pick the next Fed Chairman to sure up their position even more. But the days of the big trading banks are numbered based upon reliable sources.
J.P.Morgan executives have testified at a Senate hearing today after being land blasted by a 300 page report that stated they had misled regulators and were far less than forthcoming about key information regarding the bank’s financial exposure regarding the “London Whale” trading losses. There is absolutely NO WAY there can be a rogue trader for huge money. Any trader has trading limits and they cannot just tap into endless reserves. The SENIOR board member HAD to approve that credit limit, although they will never admit that.
Then the exchanges conduct their own audits and they are at least more credible that the regulators. In J.P. Morgan’s defense, they need not mislead regulators. They will NEVER criticize the big houses for they personally will be unable to get a job if they trash one on the team members. The ONLY way to mislead the regulators is if they were CAREER oriented people. When they take low paying jobs there to impress the big houses and their law firms, you get corruption. The regulators are NEVER misled, they are NOT INDEPENDENT to start with. There is the wink and the nod behind the scenes.
J.P. Morgan cannot have it both ways. If they claim they are the victim of a rogue trader, then they are TOO BIG to manage risk and should be broken up. Just admit the truth. It was a fully sanctioned trade that they lost on.
It is time we get back to banking and stop trying to trade with other people’s money