Glass-Steagall Alone Won’t Be Enough to Stop Dimon and the Bankers


Gary Anderson
Business Insider
May 12, 2012

Glass-Steagall worked for decades, as bankers were not allowed to take deposits and make risky bets with them. Risk can take two forms. It can be a bet on a less certain outcome, or a fairly safe bet levered up with funds from the Fed or who knows where.

Apparently Jamie Dimon made a relatively safe bet on interest spreads, levered up, so that if anything went wrong, it could be really bad. I am no expert regarding the inner workings of trading. However, while many in NYC in media were praising Dimon, I was aware that this bank was making very risky bets in the City of London, where collateral can be put up over and over again to guarantee positions.

Shoot, I live in Reno, Nevada and I knew Dimon was betting the farm in the Square Mile. I am a little disappointed that the NY financial media failed to be on this like a dog chasing a car.

Of course, Max Keiser has been screaming that this is criminal behavior to do bets like this with deposits, for a long time. He supports regulation of the banks and fast.

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