Joseph P. Kennedy once famously told his son "all businessmen are sons of bitches
." And John F. Kennedy never even met the "masters of the universe.
Yet here we are, less than four years removed from the epic collapse of Wall Street -- and the promises of better behavior by those masters -- with another sign that old Joe Kennedy may have been understating things.
In one of those obtuse and opaque maneuvers that only traders understand, the whiz kids at JPMorgan Chase bet against themselves and lost, to the tune of $2 billion and counting.
Chase boss Jamie Dimon, once considered the "good guy" on Wall Street had no choice but to admit the deal was “flawed, complex, poorly reviewed, poorly executed, and poorly monitored.’’
Peter Cohan, who teaches at Babson College, was much more direct in speaking to The Boston Globe
“It’s like playing with nuclear waste,’’ he said, “and hoping you have enough protection.’’
The timing of this debacle could not have been worse for Wall Street and its GOP enablers. Dimon and his fellow Wall Streeters have been lobbying hard against the July implementation of the Volcker Rule
, a key provision of the Dodd-Frank law that is designed to prevent such a trade from happening in the first place.
As Barney Frank noted, the $400 million to $600 million it would have cost JPMorgan Chase to comply with the rule is chump change compared to this loss. It's probably still true when you factor in the cost of lobbying against the rule and contributing to elected officials who would back up Wall Street's pledge of good conduct.
Officials like Scott Brown
Brown, you may recall,
carried the financial industry's water in weakening Dodd-Frank before voting for it, a vote he now likes to tout as an example of his independence. That role earned him another million in campaign cash at that time, generosity that continues today
And that in turn brings us to the scariest character Wall Street can think of: Elizabeth Warren, who has made her reputation as a consumer advocate battling the friends of Scott Brown.
When even Brown's head cheerleader
takes time out from its genealogy quest to suggest this is golden opportunity for "Liz" you know it's serious.
“This has been Elizabeth Warren’s mantra and she should take advantage
of it — the risky exploits of big bankers coming at someone else’s
expense,” Suffolk University pollster David Paleologos said.
These may be trying days for the GOP: Mitt Romney is pinned down by questions surrounding high school hijinks and trying to balance conservative passion for a gay marriage ban with a need not to offend moderates.
This will be another balancing act between his Wall Street pals and consumers tired of Wall Street misbehavior. Rest assured the Obama camp, already smarting from the loss of Wall Street support, will try to exploit the situation.
the guru behind both Brown and Romney, will certainly be earning his pay. He just needs to be careful where he invests it.
Labels: 2012, banks, Barack Obama, Barney Frank, Elizabeth Warren, Eric Fehrnstrom, Mitt Romney, Scott Brown, Wall Street