JPMorgan’s Profit Soars Despite Downturn - NYTimes.com

JPMorgan’s Profit Soars Despite Downturn - NYTimes.com. “One theme here is that Goldman Sachs and JPMorgan really have emerged as the winners, as the last of the survivors,” said Robert Reich, a professor at the University of California, Berkeley, who was secretary of labor in the Clinton administration.

Both banks now stand astride post-bailout Wall Street, having benefited from billions of dollars in taxpayer support and cheap government financing to climb over banks that continue to struggle. They are capitalizing on the turmoil in financial markets and their rivals’ weakness to pull in billions in trading profits.

"Crisis" is another word for shock treatment, which is another word for expropriation. Reports that the banks have repayed their debts are misleading, occluding the larger amounts of public support (theft of the money of everyday people, 10 percent of whom are unemployed, millions of whom lost their retirement money, tens of millions of whom have no health insurance, most of whom live in states whose infrastructures are decaying) that have let them ignore or simply write off toxic assets. What about a national eliminate your toxic assets day?  Everyone gets to burn their credit card bills and mortgages, restarting the whole system? 

And what about the financial future? Nothing much has changed, except these banks are more powerful than before (I prefer the days when tax money went for cool projects like the space program rather than to support the lifestyles of a couple of thousand people in the finance sector).  Recent coverage makes clear that Goldman Sachs has actually increased its risk. JP Morgan's  position is helped by its acquisition of Bear Stearns and Washington Mutual--making sure that it will be too big to fail, come what may.

The only thing good: it will be easier to nationalize a couple of the big banks than a bunch of little ones. But, it's likely already too late: rather than nationalizing the banks, the banks have acquired and securitized the government. Now they've carved it up into tranches and are trading it in global markets.

I wonder how expensive the insurance is.

Comments

[Alain]

Hi Jodi - I appreciate your continued posting of mainstream coverage of the economic crisis. It simply reinforces the strange ideological situation we are in that Zizek describes so well - we know that the system is corrupt and undemocratic, but we keep acting as if it isn't. Short of a complete collapse (which is still possible) I do not see a way out.

Also, you may be in interested in an article from the CNN Money website: http://money.cnn.com/2009/07/17/news/companies/goldman_sachs_tarp_ingratitude.fortune/index.htm?postversion=2009071710. It takes Goldman to task for something that within the larger scheme of things is small but shows just how greedy and out of touch these bastards are.

[Josh]

I know sometimes I am a little slow. Everyone experiences this once in a while. I think it happens to me more often. I apologize in advance if this sounds daft.

Can you tell me what precisely you mean by "The banks have acquired and securitized the government. Now they've carved it up into tranches and are trading it in global markets"?

I know that the government is trying to sell (maybe sold) noxious debts it bought during the financial crisis, but what does it mean to fracture the government in the way you formulate it? What does securitizing mean and how did the bank acquire the government?

[Jodi]

Josh--thanks for calling me out on this; it's cryptic and exaggerated. By acquired and securitized I had in mind the overall deregulation/privatization that has been taking place since Reagan/Clinton (some say it started with Carter). And by securitized I had in mind the bank bailout as well as the other loans/supports that have gone to the big banks under the Obama administration. The tranche and trading was a gesture to the overall debt.

But, I won't defend what I wrote as more than a gesture.