Financial Reform? Bah. Humbug.

Among the more laughable features of commentaries on Jamie Dimon’s recently revealed $2 billion (at least) gambling losses are earnest pronouncements that the debacle will stymie the efforts by Dimon and Wall Street in general to further deregulate the financial industry.

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The last time naked credit default swaps (naked meaning they are traded as speculative bets rather than hedges) got in the headlines was the fall of 2008, when, via the massive exposure of AIG to these same instruments, the global financial system trembled on the brink.

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Major players on Wall Street were swift to take action. Led by Dimon’s JPMorgan Chase, nine leading financial institutions set up the CDS Dealers Consortium and hired the master derivatives lobbyist Ed Rosen, of Cleary, Gottlieb, to keep things in order. Rosen crafted a memo suggesting that the market remain under the benign supervision of the Federal Reserve (which at that point was underwriting the banks to the tune of $7 trillion and more.) Meanwhile Timothy Geithner at Treasury was working on his master plan for policing the CDS market. Eventually, in May, 2009, Geithner unveiled his proposal, identical in all essential respects to Rosen’s memo.

A lot of money has flowed under the bridge and into legislators’pockets since then. The Dodd Frank financial reform legislation finally hit Obama’s desk, laced with loopholes and riddled with exceptions.

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Now comes the fiasco of [JPMorgan's] $2 billion (make that $4 billion, at least) loss on a hugely stupid bet dutifully reported in the media as a “hedge.”

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Back in 1986, Dimon was the bright young protégé of “Sandy” Weill, when he was forced out of American Express in a coup de requin. Master and servant made their way to Baltimore, Maryland, where Weill acquired a storefront moneylending firm called Commercial Credit. Potted media biographies flung together since the news of JP Morgan’s massive gambling losses broke last week put a decorous sheen on this phase of Dimon’s career. ABC News for example described the Baltimore company as “a sleepy finance firm that catered to middle-class clients.” Weill’s former assistant, Alison Falls, got it right at the time. “Hey guys,” she is said to have remarked “this is the loansharking business.”

  Counter Punch

...but hey, do what you want...you will anyway.