Romney cautious about regulations.

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May 17 (Bloomberg) -- Mitt Romney, saying business losses are part of "the way America works," urged caution in adopting new regulations in response to the $2 billion trading loss by JPMorgan Chase & Co.

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I think that when you have many millions in the bank, you are not as concerned about the ups and downs of unfettered capitalism. I've always seen that as a basic difference between those who espouse 'pure' capitalism and those who propose some sort of control. Pure capitalism may provide more opportunities to some, but it results in much wilder swings in economic success or failure. Didn't we just see an example of that in '08? History makes this lesson very clear.

My view is that those in the high income positions don't mind these swings as much. Making $5 million a year instead of $12 million doesn't hurt near as much as living pay check to pay check and loosing your job. Also these folks profit a lot more from the upswings.

The seeming lack of concern for those who actually suffer from these 'downturns' is apparent to me. I guess they think it's just their own damn fault for not being successful.

Nominal, consistent growth seems like a better plan to me.

Mitt Romney looks to me just like the guy who was born on third base and thinks he hit a triple.

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@IRFRANK,

JPMorgan Chase & Co's story is they lost $2 billion in an investment gamble. I call that bullshit. Money doesn't disappear. It's not a loss. Someone or more like some group (has to be mostly executives) in Chase gained a total of at least $2 billion for their own personal bank accounts.

I believe this whole "we made a mistake so don't regulate us because we're so humble about our failure here" is a smoke screen for what basically was a smooth $2 billion heist from within.

I really believe these crimes happen far more then anyone realizes and many 'lost' stock investments are basically the banks' manipulation of the trades to reward the very few at the top. This one instance just happened to be a very large and very obvious sum.

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@tsarstepan,

MFGlobal CEO Jon Corzine on where the $1.6B of missing consumer's money went:

"Hellifiknow". "I'm sad about it, though".

"I've never been good at figures. You know that."

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@tsarstepan,

I don't pretend to know where the money went, but yes, for every loser there is a corrosponding winner. Nothing wrong with that. Nothing wrong with a business occasionally losing money, or even being forced out of business. It happens - or at least that's what should happen.

The problems arise when a bank, as opposed to other business, gets into trouble and we discover that the government is on the hook through FDIC for insuring depositors. A bigger problem comes about when the government (WE) are expected to bail out the bank beyond deposit insurance. Suddenly, we discover that when there are loses, the banks have been gambling with other peoples money. Ours.

Could be we need more regulation. Could be we need much less, but much clearer regulations.

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@roger,

roger wrote:

Could be we need more regulation. Could be we need much less, but much clearer regulations.

A point well taken.

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@Setanta,

I would like to think Google's motto would be sufficient. Approximate statement is "Don't do Evil". Sadly, it hasn't worked out all that well for Google, either.

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@Setanta,

Setanta wrote:

roger wrote:
Could be we need more regulation. Could be we need much less, but much clearer regulations.

A point well taken.

Clear enough to enforce is a good idea. Often the regulators don't understand the transactions so can't even figure out if they violated regulations. That's not always a problem with the regulations. It's a problem with the transactions being devised to avoid regulations.

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Now their saying the loss may go to 3 b. Want to bet it gets higher in a few days. When you release this information slowly it reduces the impact.

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@parados,

parados wrote:

It's a problem with the transactions being devised to avoid regulations.

Another good point.

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@RABEL222,

Until they completely exit the positions, they probably risk higher losses or even some gains from earlier declared losses. They still haven't identified clearly the positions they took and what they were hedging.

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@roger,

Huh . . . i didn't know that about Google. The latin phrase Primum non nocere, which means, First, do no harm, was long taught to medical students. It is attributed to an English physician and teacher, Thomas Sydenham, in the 17th century. (Or, at least, that is what Wikipedia says, and we all know they are never wrong.

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@roger,

Your point here about other people's money is a good one. That's why the govt had to bail out 4 yrs ago. The change was that commercial banks could invest like investment banks, with other people's money. Yes, the money goes somewhere. Could say the same thing about bank robbers, yet that's illegal. Do we become a society of let the scammers do their thing?

The question is where do we draw the line.

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@roger,

Quote:

Sadly, it hasn't worked out all that well for Google, either. [/quote/]

Depends upon how you measure success. If you do so purely economically, maybe. But that's not the motivation.

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I don't agree with the theory that 'the money goes somewhere'. Not really true. This $2B loss may not trigger an economic downturn, but we surely went through one in 08. A great many people suffered and not the people that took the risks.

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Romney cautious about regulations.

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