I’ve spent a lot of time over the past few years lambasting the large banks. Overall, I’d have to say that I didn’t beat up on J.P. Morgan Chase as much as I did some of the other banks, although I did talk about them in a post back in 2010 titled J.P. Morgan, The Good and The Bad, where I talked about how they had lost, at the time, $131 million in the mortgage market, which was actually an improvement over the year before, and that my local university, Syracuse, was having protests over its CEO, Jamie Dimon, coming in as the keynote speaker.

That same CEO is probably losing his job this week (3 other executives are said to definitely be gone by week’s end) after the company announced a $2 billion loss, which is amazing for a bank that made $5.4 billion. How does a bank lose that kind of money? By doing some of the same type of stupid stuff that got banks into problems in the first place, that being speculating on things that had no real value but a minimal amount of hope (this time in Europe instead of here) that, if it had all worked out, the bank would have realized dramatic gains and we’d be talking about the genius of their leadership, but instead failed and, if it only stops at the loss it’s at they’ll all be extremely happy. Dimon was quoted as saying that what this man, Bruno Iksil, did was caused by “errors,” “sloppiness” and “bad judgment.”

Duh! Hasn’t that been the roller coaster of all the major banks over the past 5 or 6 years? Haven’t all the problems the world has suffered come about because these mega banks, unlike our neighborhood variety banks, have taken risks with what’s essentially “our” money (in quotation marks because I’ve never trusted large banks) that, in retrospect, had no real chance to succeed because, in the long run, people weren’t as stupid as some of these banking managers felt they might be?

There’s also the expectation that there could be some political fallout as well, although I’m not quite sure where it could be or who it could affect. Some are saying the Obama Administration might have to take the hit for the lack of oversight while others say that Romney and the Republican party might take a hit for fighting to allow big banks to continue doing business as usual. Personally I’m tired of the political posturing over things that neither side really had any control over.

So, what happens to J.P. Morgan Chase now? They’ll survive for now, and probably for the long run as well. But they’ve been tarnished even worse than before, and in my mind it will heed some passing of legislation in the near future breaking up the major banks to try to avoid the kind of collapse that’s had such a negative effect on our economy over the past few years. And the government can do it; remember Baby Bell in the 80’s? I for one think it’ll be about time.

Digiprove sealCopyright secured by Digiprove © 2012 Mitch Mitchell
Tweet about this on TwitterShare on Facebook0Share on LinkedIn0Share on Google+0It's only fair to share...