JPMC took TARP funds but the consensus is that they didn't need them.

The trades in question never threatened the solvency of the bank. $2B sounds like a lot but it's an easily swallowable hit for JPMC which otherwise seems to have more than sufficient bankroll management.

It's easy to ask small questions about big problems as though they are simple and isolated.

I've made no statement as to my position itt, but I think one could easily draw some correlations to things brought about by "we don't need no stinking regulations" bankers who's job is to sell ideas to people who have no clue what's actually going on, while making their [s]marks[/s] clients feel comfortable and secure as the dice tumble down the felt.

I get Krugman's motivation for his propaganda. I don't get yours.

comment 1:

JP Morgan lost money in derivatives trading. In derivatives trading for every dollar lost, someone else makes a dollar. No wealth disappears or is made.

In the financial collapse where the government encouraged risky mortgage and in fact sponsored risky loans through Freddie Mac and Fannie Mae money was just lost. Real Estate is not a zero-sum game. When real-estate loses value the money doesn't go to anyone.

So this is absolutely nothing like the financial collapse of 07-09.

In this case the Democrat Jamie Dimon is a member of the Federal Reserve that is supposed to be regulating his bank.

The head of the Federal Reserve bank of NY is another Democrat (William Dudley) who used to work for JP Morgan.

The Federal Reserve regulates what banks do with their capital and the amount of risk they are allowed to take.

This incident is a perfect example of why regulation is ineffective.

OK, who were the marks in this case?

So, company did something dumb, investors took a hit.

What's the problem here? Isn't that what's supposed to happen? Taxpayers didn't have to bail anyone out. The company lost less than 10% of it's market cap.

This isn't anything at all like 2008. All losses are not the same. Quit pretending that they are.

BTW, one can hold that this particular incident is not a justification for more regulation without arguing that all regulation is bad.

This trade doesn't matter.

What does matter is every major player in the financial world knowing two things:

1. If I am big enough, I will be bailed out before going bankrupt.

2. If the threat to the 'system' (i.e. will connected players, i.e. Goldman Sachs) is large enough, I'll be made whole even when my counterparty is broke.

If it was not a good example and people were gushing over it incorrectly I think he would point that out.

Yeah, nothing new as far as regulations are concerned. He just advocates for some old ones that have worked in the past. I was wrong about existing regulations. He wanted to use old ones again. Still a fan though.

I have a different spin on it. Every financial firm is afraid of making a bad trade, a bad loan, anything that the current political environment can use to further there "hate the banks, soak the rich" agenda. The banks had a once in a generation crisis, got some liquidity from the government, and paid the man his money.

Wat? AIG is at -140b. Fannie is at god knows how many hundreds of billions in the red.

Those losses didn't just pass to shareholders, the taxpayers made good on them to the tune of 100 cents on the dollar.

AIG is expected to make full payment and TARP is expected to turn a profit. Freddie/Fannie are a different story. The government decided to get into the loan guarantee program that's on the government not private industry.

LOLOLOLOLOLOLOLOLOLOLOLLLLLLLLLLLLLLLL at AIG paying back 140b and TARP making a profit. You really believe that?

The Government thinks it's going to get its money back and when it does it will have turned a nice little profit if you throw out the money given to GM.

http://online.wsj.com/article/SB1000...322143252.html

I can't find numbers without the auto's cause the CBO is not combining the two in an oh so clever way of hiding the fact that the only cost is gonna be for the auto's.

TARP will show a profit, because the government said it will is a really funny argument.