Late Night: Banksters – Whines That Don’t Age Well
As many folks know, I tend to surf through a lot of different news sites each day. Part of it is an attempt to cut through the various levels of spin to the actual news and part of it is to find the little nuggets of PR that help me to connect the dots. Just in the last couple of days, there have been a number of bankster related articles. Not quite to the level of seeing Jamie Dimon whining about how no one loves him but indicative of the global banking system as a whole today. Why just a couple of weeks ago we got to see Dimon confronting the Benbernank and whine about how the new Dodd-Frank regulations were just so very onerous and would hurt the abilities of the banks to create jobs. The Comptroller of the Currency apparently has the Bankster’s backs on trying to undercut the Dodd-Frank rules (via the NY Times), as weak as they are:
At issue is whether state banking regulators will be undercut by their federal counterparts when it comes to consumer financial protection laws. Banks, state regulators and consumer advocates have been sparring in legalese-filled comment letters over the last month in response to rules proposed by the Office of the Comptroller of the Currency, which regulates national banks.
Even the Treasury Department has criticized the comptroller’s rules and sided with state officials, saying the rules do not hew closely enough to the Dodd-Frank legislation intended to rein in Wall Street.
You know it must be bad when Tim Geithner’s Treasury Department is siding against it’s own OCC.
But maybe there is a problem after all as a number of investment banks or investment banking groups within larger banks have announced layoffs. Bank of America and Goldman Sachs have announced 60 and 230 positions respectively (out of an announced 1300 positions from these and other banks). HSBC has announced cuts of 700 positions in the UK. Lloyds announced today they are cutting 15K positions in hopes of allowing the British government to drop its stake in the bank.
Sounds like times are tough for the banksters after all, right? Well maybe not so much. Fortune had this post which called the Bank of America $8.5B settlement a “win,” apparently because it allows BoA to “look forward” and all that. According to this from Reuters, BoA will take write-offs of a bit over $20B in total in the 2nd quarter of the year, giving them a loss for the quarter. It is figures like that that show just how skewed things are. One bank takes a write-off/loss of over $20B in a fiscal quarter and will still most likely be profitable for the year!
But there really is no need to feel sorry for the banking industry overall, no matter how much Mr Dimon might whine. This article today from ProPublica via the NY Times DealBook lays it out fairly straightforwardly:
In a well-covered exchange, Jamie Dimon, JPMorgan Chase’s chief executive, challenged Ben S. Bernanke, the Federal Reserve chairman, about the costs and benefits of the Dodd-Frank rules. More attention has been paid to the banker’s audacity, but the response of the world’s most powerful banking regulator was more troubling. Mr. Bernanke scraped and bowed in apology without mentioning the staggering costs of the crisis the banks led us into.
So this is a good occasion to step way back to understand just how good the banks have it today.
The federal government, in ways explicit and implicit, profoundly subsidizes and shelters the banking industry. True since the 1930s, it is much more so today. And that makes Mr. Dimon no capitalist colossus astride the Isle of Manhattan, but one of the great welfare queens in America.
Jamie Dimon, Welfare Queen. Yep, that works. Mr Dimon must give prayers of thanksgiving every night that he is not a banker in Afghanistan. But then, Mr Dimon would never be in a position to be called a whistleblower so he’d probably be safe.
Oh, and for the not-to-be Masters of the Universe getting laid-off by your bankster employers the US in the next few weeks? Good luck with your unemployment because as of right now, the extended federal benefits are scheduled to run out at the end of the year so you will receive your twenty-six weeks and after that, you’re on your own. Like the rest of us.
Video: because I could.