×
Newsmax TV & Webwww.newsmax.comFREE - In Google Play
VIEW
×
Newsmax TV & Webwww.newsmax.comFREE - On the App Store
VIEW
Tags: Black | JPMorgan | endangers | system

Former Bank Regulator: JPMorgan’s 'Wild, Crazy Insane Gamble' Threatens Global Economy

By    |   Wednesday, 23 May 2012 06:33 PM

JPMorgan Chase’s cowboy-style speculation with its depositors’ money puts the entire financial system at risk, says former federal bank regulator William Black, now an economics professor at the University of Missouri, Kansas City.

How does he view the derivative positions that have caused the bank a loss estimated at more than $3 billion?

"They didn't just gamble, this was a wild, crazy, insane gamble," Black tells Yahoo. "JPMorgan poses a clear and present danger to the global economy."

Editor's Note: I Wish I Were Wrong — Economist Laments Being Right. See Interview.

The largest U.S. bank isn’t just speculating on derivatives, he notes. It’s betting big on derivatives of derivatives too. JPMorgan is the largest player in at least two types of credit default swaps.

"We don't want any federal insured entity to be speculating in financial derivatives. That’s just nuts,” Black says.

"It's really disastrous when you're talking about an institution like JPMorgan. It will sooner or later have a really bad year. When it has the really bad year, we will all end up having to bail them out or having another global crisis."

JPMorgan’s speculative activity shows it has learned nothing from the financial crisis, Black says.

Others agree that JPMorgan went way too far.

“This was clearly a treasury department designed to maximize profit . . ., and they got burned,” Thomas Obermaier, CEO of bank consulting firm Regulatory DataCorp, tells Bloomberg. “It can eat a $3 billion loss. But you shouldn’t eat a $3 billion loss from treasury trading.”

Editor's Note:
I Wish I Were Wrong — Economist Laments Being Right. See Interview.




© 2022 Newsmax Finance. All rights reserved.


266
2012-33-23
Wednesday, 23 May 2012 06:33 PM
Newsmax Media, Inc.

Sign up for Newsmax’s Daily Newsletter

Receive breaking news and original analysis - sent right to your inbox.

(Optional for Local News)
Privacy: We never share your email address.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.
 
Get Newsmax Text Alerts
TOP

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved
NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved