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May 14, 2012

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Chuck

J P Morgan, one of the best instutions in the business of banking, had an accident involving $2 billion, a small fraction of their yearly earnings, which will bring the congressional dogs upon them. If they can lose that much, undetected, just think of what the possibilities are with a lesser institution, so the talk will go. One has to agree. It is probably time for a version of Glass Steagall to return, that is, to separate business banking functions from, speculative, leveraged activities , which put the financial system at risk .

Given the fragile nature of banking today, the sizeable debt held by Euro banks, the trend of hedging against that debt, the lack of collateral behind the loans, the budget deficits, and the penchant of traders to try to become rainmaking heros, there is enormous danger in the system. It's true the banking system has deleveraged over the last 3 years, and is far safer today than pre- Lehman days, but it's time to separate some of the bank's functions. This will involve some abuse from congress, and some congressmen will pontificate, but the banks did it to themselves. Too bad.

Ralph

Amen! better to concentrate on current facts that affect people's pockets.

Herb

BRAVO!

Ike

JAMIE DIMON IS ONE OF THE "BS" ARTISTES OF 2008 - 9. I HOPE YOU READ "TO BIG TO FAIL".


Stan

You make a good case, but I disagree. A requirement of increased capital reserves would certainly be a partial answer; as would a modified Volker rule.

A return to Glass Steagle wouldn't prevent the trade that was made. The act seperated banks and brokerage firms. And, as a matter of information, Smith Barney and Citicorp violated Glass by signing a mearger agreement before the act was repealed.

The kind of trades that brought about the 2008 and current J.P. Morgan mess are comparatively new inventions. Too much latitude is given to young Turks who bet money in huge sums like it was monopoly. What the heck, - it;s not their money!

More controll is indeed needed, but in order to maintain a robust enconomy we must have a strong, competitive banking industry.

Jamie is a brilliant, good guy.

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