When I heard about Jamie Dimon questioning Bernanke, I thought how quickly greed in banking sector has returned (and that we have not apparently learned from crisis). Apparently, his beef was about Basel III requirements and supposedly greedy Jamie Dimon has lost behind the closed doors and trying one last attempt against capital requirements. Millions of salary and bonuses are obviously not enough for Jamie.
http://www.cnbc.com/id/43325105/
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Bernanke and Paulson saved not only this country, but Jamie and all of his bedfellows. Appreciation? Not in his vocabulary.
If an "ordinary" citizen were to somehow cause the economic damage to this country that Jamie and his companions did, they would be held to be subversives or terrorists, and put away forever. But Wall Street is exempt, because, well, they are somehow "different" than the rest of us. How very convenient for them.
Investor and I had a short exchange of chat about the Basel III accord last year 2010 when plan passage was near.
As with many other things, there is too much for this fella to attempt to study; but I recall the capital requirements and related rules were softened from the original plan.
However, as with the soft stress tests of the Euro/U.S. banks; I feel much of this was to prevent further scaring the heck out of investors and putting the best possible face forward that all is not lost.
Geez, there surely is nothing wrong for the safety of the financial planet for requiring a stable capital base for all of the hot dog financial houses who choose to throw the money around.
There is little incentive for the big banks to do things right; as they continue to have a waiting bailout package on the backs of the U.S. taxpayers. Would be like us having our monies returned to play some more, if we lost too much playing the slots in Vegas.
I recall some articles about Brazil getting its act together over the past 20-30 years from what was a typical S. American corrput system. I recall that requirements for the banking system included that the owners/players had to have their own money at risk, too. What a novel idea, eh???
Away I must go to recover from me flu bug.........
Take care,
Catch
Meanwhile, you have people spending money because they haven't made a mortgage payment in some cases as long as 5 years: http://www.zerohedge.com/article/meet-squatters-here-are-millions-americans-who-live-mortgage-free-5-years-and-counting
At some point, when do the responsible people who have been doing what has been traditionally considered "the right thing" (someone paying their mortgage getting tired of seeing their neighbor living for 2-3 years w/o paying, people getting tired of months and months going by with little interest from fixed income, etc.) start to crack in greater numbers? Banks aren't going to lend because of increased credit risk and if people aren't paying ("strategically defaulting", etc), where's the money coming from if the banks are sitting on non-performing assets. This doesn't even begin to get into derivatives worries and a million other concerns.
I guess the question becomes how long can the situation as is keep going on before the wheels come off. My guess: not long.
A CME floor trader (Ben Lichtenstein) was talking about the outlook on CNBC on Friday morning and offered the one word his clients are using to describe their outlook on the financial environment: "Doomed."
To quote from the transcribed article: "My customers have actually started to call it simply - putting it in one word we're basically doomed."
Going forward it is a challenging for retirees to live off their fixed income in this low return environment without taking on undue risk, high yield and emerging market bonds for example.