79% of investors have no trust in the financial system.That's a quote taken from the Jan/Feb/ 2013 "the Atlantic."
--Luis Aguilar, a commissioner at the Securities and Exchange Commission
It is a very long article, and it's filled with the reality -- known by many here for a long time -- that the "Too Big To Fail" Banks, nonetheless did, and still are. Despite the weak laws and 20 Trillion or so poured into them.
When JPMorgan disclosed that they had lost "some" money, then $2 billion, then $6 billion, that was from their unit "designed to reduce the bank's risk." The whole thing happened on the watch of the Officially Awesome Jamie Dimon. Who, it seems, is as much a genius at finance and management as, say, Kenneth Lay of Enron.
The article goes on to point out that the $6B loss (at least; the books are still being checked) is not a life-ending blow to JPMorgan, nor any of the other big banks.
What is a blow is that not only are the retail investors staying away from JPMorgan and its close relatives in the Bankster Scam, but...
The incident was about much more than money, however. Here was a bank generally considered to have the best risk-management operation in the business, and it had badly managed its risk. As the bank was coming clean, it revealed that it had fiddled with the way it measured its value at risk... Moreover, in acknowledging the losses, JPMorgan had to admit that its reported numbers were false. A major source of its supposedly reliable profits had in fact come from high-risk, poorly disclosed speculation.Oh, so much worse. So much.
It gets worse. ...
It appears that Jamie Dimon, once among the most trusted leaders on Wall Street, didn’t understand and couldn’t adequately manage his behemoth. Investors are now left to doubt whether the bank is as stable as it seemed and whether any of its other disclosures are inaccurate.The article goes on to recall the broader banking establishment, of which JPMorgan is only one of its leaders. The Financial Elites criminal activity about LIBOR (London Interback Offered Rate), the fines paid to avoid criminal prosecution (such borne by the shareholders, doubtless), and other legal prosecutions underway around LIBOR rate-fixing.
Then onto the drug- and terror-money laundering; again with fines and no criminal charges. The falsifying of mortgages with "robo-signing;" the improper foreclosures; the routine misleading of clients when they were sold crap as sound investments, and Bankers then took bets against what they knew was crap when they suckered the buyers.
(btw, given all these fines and no criminal charges: Does this look more like Justice to people; or more like that scene in the Godfather where the big cheese hits the smaller player and says in effect "You've got a money stream, but I just need to get my beak wet."?)
The article goes on again to note the widespread distrust of not only JPMorgan, but all the Allegedly Too Big To Fails. It then reminds of all the things which were supposed to "fix" the Banks. Dodd-Frank; the trillions which the Fed released into the Banker's hands (aka "The Economy," which is not the same economy non-bankers live in) through TARP, the outright hidden loans we've just heard about, plus QE (Qualitative Easing) in all its incarnations. (And what, of all that, has trickled upon the Real Economy, btw?)
The article failed to mention the aid Government has given through things like suspending mark-to-market rules around "assets" which must, if arithmetic means anything, cannot be anything but wildly over-stated on the books. But you can't get everything. Heck, if the tales of all the Banker Corruptions were made into a movie, that movie might run for days or weeks.
Here's the crux of the thing:
This [depressed stock value despite all these things given the TBTFs] indicates that investors don’t believe the stated value, or don’t believe the banks will be profitable in the future—or both. Several financial executives told us that they see the large banks as “complete black boxes,” and have no interest in investing in their stocks. A chief executive of one of the nation’s largest financial institutions told us that he regularly hears from investors that the banks are “uninvestable,” a Wall Street neologism for “untouchable.”It refers to surveys taken that show more than half of institutional investors do not trust the Banksters' books. Retail investors. Institutional Investors. Hedge-fund Managers.
That’s an increasingly widespread view among the most sophisticated leaders in investing circles. Paul Singer, who runs the influential investment fund Elliott Associates, wrote to his partners this summer, “There is no major financial institution today whose financial statements provide a meaningful clue” about its risks. Arthur Levitt, the former chairman of the SEC, lamented to us in November that none of the post-2008 remedies has “significantly diminished the likelihood of financial crises.”
There's much much more and I've not gone past the first third of it here. The rest goes into detail about the fuzzy math used by all the major banks, in turn. The already-visible rot which raises the question: "What's Inside America's Banks?"
A disturbing number of former bankers have recently declared that the banking industry is broken ...Herbert Allison, the ex-president of Merrill Lynch and former head of the Obama administration’s Troubled Asset Relief Program, wrote a scathing e-book about the failures of the large banks, stopping just short of labeling them all vampire squids. A parade of former high-ranking executives has called for bank breakups, tighter regulation, or a return to the Depression-era Glass-Steagall law... Among them: Philip Purcell (ex-CEO of Morgan Stanley Dean Witter), Sallie Krawcheck (ex-CFO of Citigroup), David Komansky (ex-CEO of Merrill Lynch), and John Reed (former coâ€‘CEO of Citigroup). Sandy Weill, another ex-CEO of Citigroup, who built a career on financial megamergers, did a stunning about-face this summer, advising, with breathtaking chutzpah, that the banks should now be broken up.As to what the whole thing seems to mean: The Too Big To Fails are bankrupt; their accounts are false; investors are avoiding them; and this can destroy the entire financial system if it goes on with these players in place; nor rectified.
(Note: and it really seems like surrealism gone amok to me that any Federal Official who hasn't offered public testimony about the widespread corruption of our financial elites should be an alumni of any of the Vampire Squids. Nor should any of their enablers in the Federal Reserve system be retained in office a day longer.)
Saving these banks, as has been obvious to so many for so long, is as possible as ordering the incoming tide to turn back. There is no effort which will prop up an enterprise whose very posts and beams have rotted through and through. And sooner or later we're guaranteed to see the damned thing crumble our heads. Only worse than before at this later date.