• Pivotfarm
    04/17/2014 - 17:08
    You know when you want to read that last page of the book just before you fall off into the Land of Nod and the Sandman comes and sandbags you to fall asleep?

Glass Steagall

Tyler Durden's picture

Guest Post: JPM Chase Chairman, Jamie Dimon, The Whale Man, And Glass-Steagall

It’s 1933 and the country has undergone several years of painful Depression following the 1920s speculation that crashed in the fall of 1929. Investigations into the bank related causes began under Republican President, Herbert Hoover and continued under Democratic President, FDR. Okay, that’s pretty common knowledge. But, here’s something that isn’t: of all the giant banks operating their trusts schemes and taking advantage of off-book deals, and international bets in the late 1920s, it was an incoming head of Chase (replacing Al Wiggins who shorted Chase stock in a network of fraud) that advocated for Glass-Steagall. Indeed, despite all pedigree to the opposite (his father was Senator Nelson Aldrich architect of the Federal Reserve and brother-in-law, John D. Rockefeller), Chase Chair, Winthrop Aldrich, took to the front pages of the New York Times in March, 1933 to pitch decisive separation of commercial and speculative activity arguments.  Fellow bankers hated him. His motives weren’t totally altruistic to be sure, but somewhere in his calculation that Chase would survive a separation of activities and emerge stronger than rival, Morgan Bank, was an awareness that something more – permanent – had to be put in place if only to save the banking industry from future confidence breaches and loss. It turned out he was right. And wrong. (much more on that in my next book, research still ongoing.) Financial history has a sense of irony. JPM Chase was the post-Glass-Steagall repeal marriage, 66 years in the making, of  Morgan Bank and Chase. Today, it is the largest bank in America, possessing greater control of the nation’s cash than any other bank.  It also has the largest derivatives exposure ($70 trillion) including nearly $6 trillion worth of credit derivatives. 


Tyler Durden's picture

Volatility Is Back

Volatility is back. The S&P moved more than 1% on 4 of the 5 days, had the biggest down day of the year, and even the least volatile day was a 0.7% move.


Tyler Durden's picture

Guest Post: What This Country Needs Now Is Hope

Millions of middle class citizens in the U.S. sink deeper into despair every day. Day by day hope is being lost that the future for our children will be better than our past. The political, financial, and corporate leaders of our country are intellectually and morally bankrupt. The major Wall Street banks are bankrupt. Social Security is bankrupt. Medicare is bankrupt. The whole damned world is bankrupt. Anyone with an unbiased view of our planet would conclude that we are in unfathomable danger. The list of impending catastrophic issues that will blow up the world for millions in the U.S. and across the globe is virtually endless... When I started to detail the issues facing our country today, I expected to come up with 10 to 20 bullet points of key concerns. As I methodically worked through the categories of challenges facing the American Empire, the total reached 76 bullet points. The facts as presented above paint a picture of impending doom for America. The slogans and vapid “solutions” proposed by political candidates and entrenched Washington politicians do not even scratch the surface of what would need to be done to save this country from economic collapse. Many of these problems took decades to create and are not solvable in a reasonable time frame. With the country still delusion, overleveraged, and underemployed, it seems like the existing economic and social structure will need to be blown up to restore hope in this country.


Tyler Durden's picture

Early Take On Obama's Speech

The only surprise in the speech so far is that he hasn't told Transatlantic Holding Inc., that they should accept Buffett's offer. Now we can get back to trying to figure out what new plan Greece and the Troika come up with to justify repeating the process again a few weeks from now.  And just how much QE is going to be announced Wednesday.


williambanzai7's picture

ViSUAL CoMBaT DaiLY (9.16.11) (EnDLeSS EURO...)



Tyler Durden's picture

Guest Post: This Country Defaulted Long Ago

The final collapse of our credit expansion boom approaches. We have a choice over the next week. We could voluntarily abandon further credit expansion by voting for a Balanced Budget Amendment to the Constitution or we can raise the debt ceiling, pretend to cut spending far in the future, and allow our currency system to experience a catastrophic final collapse. We’ll take what’s behind door #2 Johnny. The vested interests in Washington DC and Wall Street only care about power and wealth. They will never abandon credit expansion. It’s their drug. They must have it. They are addicted to it. They will keep injecting it into our system until they overdose America.


Tyler Durden's picture

The UK Is Preparing To Return To "Glass-Steagall"

In a very surprising move, the AP reports that the UK finance minister George Osborne has announced a major overhaul of British banks, the key provision of which will be the separation of bank retail and investment business "in order to help avoid another financial crisis" - an act which is in essence a reintroduction of Glass-Steagall. What is stunning about this development is that the banking cartel has allowed the UK to get so far as to effectively repeal Gramm-Leach-Bliley, the act that ended Glass Steagall and allowed unprecedented deregulation to convert formerly safe banks into the mastodon, 50x levered, TBTF hedge funds they are now. And if this is happening in the UK, how long before Europe adopts the same overhaul in order to placate its austerity-ired population, and deflect populist anger where it belongs: the banking oligarchy which continues to defy nature, and the simple laws of bankruptcy, and demands that there is never even the smallest impairment of senior claims. All this may very soon be changing.


Tyler Durden's picture

Carl Icahn Confesses That The "System Is Not Working Properly", Warns Of Another "Major Problem" Coming

Confirming our ongoing observations that the pursuit of leveraged beta is the only game in town ("Levered Beta Uber Alles: NYSE Borse Margin Debt Jumps To Three Year Highs, Investor Net Worth Remains At Record Lows") is this surprising confession by hedge fund titan Carl Icahn, who not only warns that the levels of leverage achieved in the current centrally planned regime is as bad as it ever was, and that some form of Glass-Steagall should return, but that, stated simply, the entire "system is not working properly." His warning, stated in a very politically correct fashion, is that "there could be another major problem" either next week, or next year. Which is not surprising: after all not only has anything changed, but the very same drivers of risk that nearly crashed capitalism in Q3 2008, are back and arguably stronger than ever. That the Fed is the last recourse mechanism preventing an all out systemic wipe out probably should not be a source of comfort to anyone. In the end, the Fed, as any other authoritarian institution promoting central planning, will always lose.


Tyler Durden's picture

Guest Post: Tossing The Consumer Under The Bus...And Insanely Expecting An Economic Recovery

I’ve been pouring through the Fed Reserve’s recent release of circa 2005 FOMC meeting transcripts. The most striking observation that one can make is that the consumer - the very lifeblood that determines whether our economy will live or die - has been discarded...The solution is simple, we are broke since we take in with taxes and borrowing less then we owe. Our deficit alone ensures default or Quantitative Easing from now until the wheels come entirely off. It is time we reissue the currency, tie it temporarily and loosely to gold, get our manufacturing jobs back and move on.


williambanzai7's picture

Elliot Spitzer (Harvard Club non grata)--Here's To You Elliot!

I have one question: Are Lloyd Blankfein, Lawrence Summers and Robert Rubin members of the NYC Harvard Club? If not, they should be...


restoreliberty's picture

The Liberation Essays, No. 1

In response to the bankers and governments’ global rape, pillaging and plundering of people’s assets and freedoms, we are starting a series of essays that we call “The Liberation Essays” in an attempt to educate the masses about the true nature of the global financial system. We will continue to write our essays until we feel we have achieved our goal of education and eventually liberation from the racketeering firms that call themselves Wall Street and Central Banks. Below we grant you essay No. 1.


Tyler Durden's picture

Goldman Joins JPMorgan On The PR Offensive Against The US Middle Class, As Americans Find A Surprise Champion In The Face Of Fed's Tom Hoenig

The campaign by the big banks against the people of the US is getting louder by the day. First, it was JP Morgan' Jamie Dimon, who segued into the Goldman "god' banker" refrain that all megabanks are not just critical but need to get even bigger in the form a 36-page lament to shareholders (in which among other things he repeats that even though JPM was bailed out, and even though it was handed Bear with Maiden Lane I left to pick up all the crap he did not want, none of those activities by the US taxpayers were necessary), and today it is none other than Goldman Sachs, which after prudently keeping a low public profile for a few months, is about to remind everyone who runs the world. And with the US public comprised of phlegmatic sheep, or morts as Michael Lewis put it very graphically, it appears that nobody is willing to stand up to those who run not just the markets, the economy and the administration, than the Fed's contrarian Tom Hoenig. In an exclusive interview with HuffPo's Shahien Nasiripour, Hoenig indicates that even among members of the Fed, there are people who not only think rationally, but realize that should the big banks/hedge funds (really just JPM and GS at this point) get their wishes to continue the status quo, the next leg of the crisis can't be far behind.The only problem: this time America itself will go down with the big banks: remember - all negative swap spreads indicate is that the banks insured by America, are now perceived as less risky than America itself.


Vitaliy Katsenelson's picture

More Government in the Financial Sector to Save Capitalism

A greater government involvement in the financial sector is not something I thought I’d ever ask for, but it has turned into a necessity in order to preserve, not destroy, capitalism.


rc whalen's picture

Is Paul Volcker the Father of "Too Big To Fail?"

The difference between the world when Volcker was Fed chairman and today is the end of Glass Steagall. Instead of bailing out simple lenders, the Fed now faces the task of managing and saving giant securities and securitization platforms that are too big to manage in a rational fashion. Don't fool yourself into thinking that JPM chief Jamie Dimon or any CEO of a TBTF bank has the slightest idea what is really happening within their enterprise.


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