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Economy

JP Morgan Chase CEO Denies That Growing Trading Losses Prove His Bank Is Too Big To Manage

By Pat Garofalo on Jul 13, 2012 at 4:20 pm

JP Morgan Chase CEO Jamie Dimon held a conference call today to announce the bank’s latest earnings and address the mounting losses from the so-called “London Whale” trade. So far, the bank’s losses from that trade total nearly $6 billion, and could be headed north to $9 billion.

During the call, one analyst asked Dimon whether the failed trade — which was originated from a trading desk that was supposed to help the company reduce risk — shows that JP Morgan is simply too big to manage. Dimon, of course, said, “no“:

During the Q&A portion Mike Mayo, an analyst with CLSA, asked Dimon about Too Big To Fail “I’m wondering if the firm as a whole has reached some sort of tipping point in terms of size or complexity that makes it more difficult to manage,” Mayo asked.

Dimon replied, “No”

Mayo probed Dimon with “Have you lost a step?” The crowd on the conference call laughs and someone shouts out “Are you too old?”

Dimon will have none of it, saying “Mike, this company is the same company went from ’06, ’07, 2010, 2011, Bear Stearns, while Mike, we had a record last year.”

Many financial experts, however, disagree. “I think it does underscore that even with very good management these institutions are just too big to manage,” said former Federal Deposit Insurance Corp. Chair Sheila Bair. “Such banks have become too large and complex for management to control what is going on,” added economist and big bank critic Simon Johnson. “The regulators also have no idea about what is going on. Attempts to oversee these banks in a sophisticated and nuanced way are not working.”

As Sen. Sherrod Brown (D-OH) said during an interview with ThinkProgress, “these banks are not just too big to fail, they’re too big to manage…I think these banks will be stronger and healthier and probably more profitable if they’re smaller.” However, Dimon clearly doesn’t see it that way, and has done everything he can to ensure that regulations restricting risky trading by the biggest banks get watered down.

NEWS FLASH

Self-Proclaimed Black Pastor Spokesman Compares Homosexuality To Bestiality | Reverend Bill Owens is the founder of the unrepresentative Coalition of African-American Pastors, a group that exists solely to attack black leaders and organizations that support marriage equality. The National Organization for Marriage eagerly promotes the fledgling group as part of their effort to drive a wedge between gays and blacks. Yesterday, in Houston, Owens held a press conference outside the NAACP, protesting it for endorsing the freedom to marry in a recent resolution. As RightWingWatch’s Josh Glasstetter points out, Owens’ views on homosexuality are deplorable, believing that it is caused and spread by molestation and is comparable to bestiality. Take a listen:

Justice

Arizona’s 20 Week Abortion Ban Challenged In Federal Court

By Guest Blogger on Jul 13, 2012 at 4:15 pm

Yesterday, three doctors — represented by the American Civil Liberties Union, the ACLU of Arizona, and the Center for Reproductive Rights — sued Arizona over the state’s 20-week abortion ban, calling it the most extreme ban in the nation.

Arizona’s law, signed by Gov. Jan Brewer (R-AZ) in April, criminalizes almost all abortions after 20 weeks, even though, at 20 weeks, a fetus firmly pre-viability. Viability is generally agreed to occur in week 23 or 24. The only exception to the law is for immediate medical emergencies.

The ACLU argues that the law violates patients’ right to due process of law:

“Any number of things can happen during a pregnancy, and a woman has to be able to make the right decision for herself and her family,” said Talcott Camp, deputy director of the ACLU Reproductive Freedom Project. “Whether a woman decides to continue with a high-risk pregnancy or terminate it, the important thing is that women, families and physicians make these decisions – not politicians without any medical training.”

“No court has ever upheld such an extreme and dangerous abortion ban,” said Dan Pochoda, legal director of the ACLU of Arizona. “Instead of passing unconstitutional laws and blocking women’s access to critical health services, our legislators should be working to ensure that all women get the care they need to have healthy pregnancies and protect their families.

In Roe v. Wade, the Supreme Court set up the original framework for when states can intrude on a woman’s right to privacy. The court instituted the viability standard and ruled that state’s can ban abortion outright — with exceptions for a women’s life and health — only after viability. More recently, in Planned Parenthood of Southeastern Pennsylvania v. Casey reaffirmed that standard, specifying viability as “the earliest point at which the State’s interest in fetal life is constitutionally adequate to justify a legislative ban on nontherapeutic abortions.” Arizona’s law clearly appears to violate that standard.

At least six other states have enacted 20-week bans: Nebraska, Idaho, Indiana, Kansas, North Carolina, and Oklahoma.

–Alex Brown

NEWS FLASH

Bain Press Release Claims CEO Romney Is On ‘Part-Time Leave’ To Run Olympics | The Romney campaign has claimed that the former Massachusetts governor cut all ties with Bain Capital when he left to run the 2002 Winter Olympics in February of 1999, but a press release from July of 1999 seems to contradict this account. “Bain Capital CEO W. Mitt Romney” is “currently on a part-time leave of absence to head the Salt Lake City Olympic Committee for the 2002 Games,” the release, uncovered by Daily Kos’ Jed Lewison, states. The document announces the departure of two Bain managing directors. In 1999, Romney himself had stated that he would “stay on as a part-timer with Bain providing input on investment and key personnel decisions.”

NEWS FLASH

Study Calls For Yearly PTSD Screenings For Iraq, Afghanistan War Vets | The Institute of Medicine, an independent group of experts that advises the federal government on medical issues, today released a study calling for annual post traumatic stress disorder screenings for U.S. troops who have served in Iran and Afghanistan. The New York TImes At War blog reports that the study also recommended that the Departments of Defense and Veterans Affairs expand access to treatment services “particularly for people in rural areas, in the National Guard or Reserves, or in combat zones.” It is estimated that between 13 and 20 percent of the nearly 3 million service members that have deployed to Iraq or Afghanistan have symptoms of PTSD.

Related Posts

NEWS FLASH

Zimmerman Attorney Makes Motion To Disqualify Judge | Judge Lester recently raised Zimmerman’s bond to $1 million, ruling that he purposely misled the court and was planning to flee the country. From the Orlando Sentinel:


In the motion, Zimmerman’s lawyer said Judge Lestor “makes gratuitous, disparaging remarks” about Zimmerman in his June 5 bond order.

Full text of the motion HERE.

Alyssa

No, Oscar Pistorius Will Not ‘Ruin The Olympics’

By Travis Waldron on Jul 13, 2012 at 3:36 pm

Oscar Pistorius, a South African quarter-miler who became the first athlete with a disability to qualify for the Olympic Games this year, was born with a rare condition that caused the amputation of both legs below the knee. Pistorius runs on “blades,” and though there is no evidence that the blades provide Pistorius with any competitive advantage over his fellow runners, his participation has sparked a needless controversy from writers and analysts like CBS Sports’ Gregg Doyel, who thinks the precedent set by Pistorius’ participation could “ruin the Olympics.”

The nut of Doyel’s argument is that while Pistorius’ story is “a great one,” it isn’t fair for him to run against “able-bodied” athletes because at some hypothetical point in the future, a disabled runner using prosthetic blades will have an unfair advantage over athletes with legs. That, Doyel says, is a dangerous precedent:

But Pistorius represents so much more than one man, one country, even one Olympiad. He represents every amputee from this day forward, and once he runs in the 2012 Games, the precedent will have been set. And it’s not a good one.

The small problem with Doyel’s argument is that it depends solely on a hypothetical, one the International Olympic Committee is capable of dealing with. If technology becomes an artificial advantage, it is an easy problem to address, the same way the IOC bans performance-enhancing drugs and dealt with the swimming suit controversy from the 2008 Beijing Games. And Doyel either isn’t aware of or doesn’t mention the story of George Eyser, a gymnast whose six medals at the 1904 Olympics remain the only ever won by an athlete with an artificial leg. Far from being ruined, the Olympics continued to grow and prosper for the next 108 years.

The larger problem, though, is that Doyel and others that share his view have seemingly lost a perspective of what the Olympic Games are for, something that is easy to do in a country that regularly finishes at the top of the medal count and where sports, for better or worse, are played solely to win. But here, lest Doyel or anyone else forget, is the Olympic mission:

The purpose of the Olympic Movement is to:
– link sport with culture and education;
– promote the practice of sport and the joy found in effort;
– help to build a better world through sport practised in a spirit of peace, excellence, friendship and respect.

This mission is what led the IOC to negotiate the addition of first Saudi Arabian women in Olympic history to the kingdom’s team even though they didn’t qualify. It is what leads athletes across the globe to chase the Olympic dream even if they have no chance of challenging better athletes for a gold medal. It is what brought Jesse Owens to the Third Reich, Pyambu Tuul to Barcelona, a united Korea to Sydney, and a man with no legs to London.

The Olympics are as much about the stories of overcoming adversity and challenging global and personal barriers as they are about champions and their medals. Oscar Pistorius won’t ruin that. Attitudes like Doyel’s will.

Health

State Hospitals: ‘It Only Makes Sense’ To Support Expanding Medicaid Under Obamacare

By Guest Blogger on Jul 13, 2012 at 3:30 pm

When the Supreme Court upheld President Obama’s health care reform bill, it also altered an Obamacare provision that expands Medicaid so that states could choose to opt out of program expansion without losing federal funds. Now, all eyes are on the states as more and more Republican governors announce they will refuse the Medicaid expansion provided by the Affordable Care Act. GOP governors from six states so far have said that they won’t expand Medicaid: Florida, Mississippi, Texas, Wisconsin, South Carolina and Louisiana.

Despite these governors’ opposition to expanding coverage to an estimated 17 million people through Medicaid, health care providers in several states where governors have opted out still support the expansion. A few of their comments include:

  • “We are very much in favor of extending Medicaid programs in South Carolina. […] These people are going to hospitals and getting care without payment. […] It only makes sense that we would support expansion.” — Allan Stalvey, executive vice president of the South Carolina Hospital Association
  • “Whether you take the most conservative or the most generous number, a lot of people [would gain from health insurance]. …We know from all of the research that’s available that people are better off with health insurance than without it.” — Bruce Rueben, president of the Florida Hospital Association
  • “Without the Medicaid expansion, many will remain uninsured, seeking care in emergency rooms, shifting costs to the privately insured, and increasing uncompensated care to health care providers.” — an official from the Texas Hospital Association
  • “We think there are essentially three options [for hospitals in states that refuse]. One is you start cutting back on services. …You find yourself basically putting this in the lap of taxpayers and tacking on the bill for your uninsured to their bills. In the worst circumstance, you simply decide you can’t go on in that situation and close your doors. It’s a pretty grim menu of choices.” — Bruce Siegel, the chief executive of the National Association of Public Hospitals, in an interview with Sarah Kliff

Designed specifically to help the poorest Americans, the expansion of Medicaid would provide insurance coverage to all individuals with incomes up to 133 percent of the poverty line. According to several reports, the expansion would also spur economic activity, increase employment, and save states money. Unfortunately, the states that have so far refused to expand Medicaid are also those with the largest number of uninsured.

– Nina Liss-Schultz

LGBT

Thomson Reuters Comes Out Against Minnesota Marriage Inequality Amendment

By Zack Ford on Jul 13, 2012 at 3:10 pm

Thomson Reuters, a company that provides business data, is the latest company to come out against Minnesota’s proposed marriage inequality amendment. The company emailed the following statement to its employees today:

As we’ve heard from employees, recruiters and customers, one thing has been very clear: we’re a better place when we have a rich variety of perspectives, talents, backgrounds, lifestyles and experiences in our workplace, and within the broader community from which we recruit. We believe that building a culture that thrives on diversity and inclusion and provides equal opportunities to everyone is a critical factor in our ability to serve our customers and be successful. …We believe the Minnesota Marriage Amendment, if passed, would limit our ability to recruit and retain top talent. For this reason, we do not believe that the Amendment would be good for Thomson Reuters or the business community in the state.

Thomson Reuters is the third Fortune 500 company to oppose the discriminatory measure, joining General Mills and St. Jude Medical.

Economy

CHARTS: How Obama’s Tax Plan Still Gives A Tax Cut To Wealthy Americans

By Travis Waldron on Jul 13, 2012 at 3:05 pm

Opponents of President Obama’s plan to extend the Bush tax cuts on income up to $250,000, but to let the cuts for higher incomes expire, continue to claim that he is levying a massive tax increase on the wealthy and small business owners, even though the small business point has been repeatedly debunked and the rich would still receive a tax cut under Obama’s plan.

As we pointed out when Obama proposed the plan, every single taxpayer still receives a tax cut on income up to $250,000. As this Citizens for Tax Justice chart shows, the size of remaining tax cut dwindles the more income an earner makes, and those just above the $250,000 line would still keep nearly all of the tax cut they received under George W. Bush:

The Tax Policy Center also crunched the numbers for the Washington Post’s Greg Sargent and found that many of the richest Americans will barely see their tax liabilities change. For the 95th-99th percentiles of income earners, the tax liability hardly increases, according to TPC’s numbers:

This may be hard for Republicans who oppose Obama’s plan to believe, but the only people who will truly see a sizable increase in their tax liabilities come from the top 1 percent of income earners. The rest — including the small businesses Republicans continue to cite — will hardly feel an impact at all.

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