MSM are playing up a recent investment conference exchange between a bank analyst, Mike Mayo of Credit Agricole, and JPMorgan Chase CEO Jamie Dimon. The analyst asks Dimon about the difference in capital ratios at UBS and JPMorgan (The ratios are higher at UBS).
Mayo is implying that the higher ratio is important. Dimon responds, "That's why I am richer than you." Dimon is right. Dimon understands the way the game is played. No one fears putting their money at JPMorgan. It's Too Big To Fail, under current government rules and regulations that always protect the banksters. Dimon gets it. And that is one of the reasons he is richer than Mayo. He knows how the game is rigged. Capital ratios would be much more important in world where the government didn't create moral hazard for the benefit of the banksters, but that is not the world we live in.
Bottom line: Banksters get the edge, Jamie Dimon understands this and that is an important reason why he is rich.
Here's MSM discussing and playing the clip
http://globaleconomicanalysis.blogspot.com/2013/02/elizabeth-warren-grills-bernanke-on-too.html
ReplyDeleteWarren: These big financial institutions are getting cheaper borrowing to the tune of $83 billion in a single year, simply because people believe government would step in and bail them out. And, I'm just saying, if they're getting it, why aren't they paying for it?
Bernanke: I think we should get rid of it.
Warren: Alright. I'll ask the other question. You were here in July, and you said you commended Dodd-Frank for providing a blueprint to get rid of "Too Big to Fail". We've now understood this problem for nearly five years, so when are we going to get rid of "Too Big to Fail"?
Bernanke: Well, some of the you know uh as we've been discussing, some of these rules take time to develop. Uh, uh. ...."
Dimon must not have received the memo; Bernanke says he is going to end Too Big to Fail:
ReplyDeletehttp://bionicmosquito.blogspot.com/2013/02/bernanke-to-end-too-big-to-fail.html
Trust him!