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"London Whale" swallows $2B (soon to be $3B)
labane1917
(1,438 Posts)
Posted:
11-May-2012 06:54
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Here we are 4 years after the 2008 collapse and they are still at it. JP Morgan held an emergency conference call this afternoon to announce a $2B loss over the past 6 weeks that will likely reach $3B this quarter due to gambling losses by a trader known as "London Whale" (I wonder where he is based, City of London I would imagine, the mecca for unregulated financial gambling). The same JP Morgan who said in their earnings release 4 weeks ago that media reports regarding huge trades in credit default swaps was a "storm in a teacup". The same JP Morgan who have been lobbying hard against the proposed Volcker Rule that would place restrictions on proprietary trading by banks, and lobbying hard against reinstating the Glass-Seagall act that would separate commercial and investment banking. The same banks who are "too big to fail" and guaranteed by the government i.e. know they will be bailed out by the taxpayer when they collapse under their gambling debts, just as Anglo were in Ireland.
The insatiable drive for short term profit (driven by executive compensation plans) by the private banking sector almost collapsed the entire financial system in 2008. There is nothing in place to prevent this happening again and the banks appear to have no effective risk management to prevent an even worse collapse happening. There is zero political will to tackle this issue which is remarkable given how obvious it is to an increasing majority that the large banks and the entire financial services industry needs to be blown up before they blow us all up.
As Aldous Huxley once said "That men do not learn very much from the lessons of history is the most important lesson of history".
Sources: WSJ, Marketwatch
N16
(1,724 Posts)
Posted:
11-May-2012 07:48
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Ten years or so ago, I was working as a project manager for a trading software firm and one of my long term clients was JP Morgan. I used to have meetings down thee every friday afternoon. It is one of the most sterile places I have ever gone into, full of dull, soulless, semi-paranoid people, everyone watching their backs. I wasnt on great money at the time and if they came in and offered to double it, I wouldnt have gone there. At precisely 3pm each Friday, a woman came onto the IT floor with a trolley of small cakes, coffee and tea. Everyone would gather round quietly and politely, sip tea or coffee and slowly eat a cake careful not to drop any crumbs and lightly fraternise with one another (in a very inane way) before filtering back to their desks. They worked them to the bone, the bank basically owned them. It took a certain type of person to work there. On top of that, their IT policy was one of complete paranoia - anyone who has worked with any sort of system will know what change control is - this was change control on steroids. The servers and systems we provided data for were all either Linux or Solaris. I'd go down and sit at one of the trading systems guys desks to talk about a problem - if they wanted access to a server (just to look at the files, they would have no change access at all) they would have to ring up another team and that other team would send them a windown they could log on to the server with. Have never seen anything like it anywhere, a nightmare from a support perspective. They woukd only have ahd access to the servers that hosted our software and only to the specific account on that server - no access to anything like algo trading engines etc.
A horrible place. Sterile and full of people who had the life sucked out of them.
Larkin
(4,404 Posts)
Posted:
11-May-2012 08:21
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The sooner we start jailing and beggaring some of these banking types the better it will be for us all. If this lad tried this in China there would be a swift bullet behind the ear but on this side of the world we have the other extreme in that nothing is done to them as a result of their antics. The bullet behind the ear doesn't work but by Jaysus neither does the namby pamby way we handle the issue.
Eddie Batt
(820 Posts)
Posted:
11-May-2012 16:37
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Interesting to read that N16 -I went for a temp job with Deutsche Bank in the mid 90's which was paying fairly decent money.Two minutes into the interview I knew I wouldn't like the place and the multitude of rules they had.
There is a lot to be said for enjoying your work -I have had a couple of jobs where I started to dread Monday morning on a Saturday night-not good for the soul.
yankeelad
(5,535 Posts)
Posted:
11-May-2012 22:08
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Unfcuknbelievable.They are back at it just as if nothing ever happened after all the taxpayer bailouts.So this is what our Republican reps.have in mind when they say no to any government oversight.Apparently plenty of people in the field already knew what this guy was up to and why they hung the tag London Whale on him.
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