The economic catastrophe that occurred in 2008 was brought on by investment firms and big banks on Wall Street making risky investments in the pursuit of bigger profits. Very little has been done since 2008 to ensure what happened in 2008 doesn’t happen again. Even the little bit that has been done in the interest of reigning in the big banks so they don’t crash the world economy again has been fought tooth and nail by the very firms that caused the mess in the first place. There have been no major arrests, or even any investigations started to get to the bottom of what happened and to make someone accountable.
This relatively minor hiccup, (in today’s trillion dollar conversations), could be the only warning sign we get before the world’s economy crashes again.
This is the world the new Republican Tea Party wants Americans to live in. They are opposed to any regulation of Wall Street at all. They say they believe in the free market and it should be allowed to work unfettered. The problem is that to have a free market economy there has to be regulations, otherwise the economy will become dominated by a few firms. There is no ‘free’ in that sort of monopolistic economy.
“JPMorgan Chase & Co. (JPM) Chief Executive Officer Jamie Dimon said the firm suffered a $2 billion trading loss after an “egregious” failure in a unit managing risks, jeopardizing Wall Street banks’ efforts to loosen a federal ban on bets with their own money.
The firm’s chief investment office, run by Ina Drew, 55, took flawed positions on synthetic credit securities that remain volatile and may cost an additional $1 billion this quarter or next, Dimon told analysts yesterday. Losses mounted as JPMorgan tried to mitigate transactions designed to hedge credit exposure.
“There were many errors, sloppiness and bad judgment,” Dimon said as the company’s stock fell in extended trading. “These were egregious mistakes, they were self-inflicted.”’
Read the rest of the article here: JPMorgan Loses $2 Billion on Unit’s ‘Egregious Mistakes’