JP Morgan the new Lehman Brothers: Why Make Money through Commercial Banking when you can become a taxpayer backed Investment Bank. How JP Morgan Really made the $3.6 Billion in Q3 Profits.Toxic mortgages and credit card losses through defaults are rising at a rapid pace. This was also apparent in the earnings report from JP Morgan that reported positive earnings because of non-retail banking activities. Yet the media for whatever reason isn’t highlighting more carefully where the gains are coming from. For example, JP Morgan which swallowed up Washington Mutual and Bear Stearns, posted losses on credit cards and home mortgages yet doubled its earnings from last year in its investment banking division. Here is one of the key examples of why removing Glass-Steagall is such a major problem. The recent meteoric rise in stock prices merely reflects hot money trying to find ground. If we look at actual loan losses they are still on the rise:

 

http://www.mybudget360.com/jp-morgan-the-new-lehman-brothers-why-make-money-through-commercial-banking-when-you-can-become-a-taxpayer-backed-investment-bank-how-jp-morgan-really-made-the-36-billion-in-q3-profits/

There's nothing wrong with combining an investment bank with a commercial bank, so I wish they wouldn't criticize repealing that particular law.

 

Read this:

 

President Barack Obama believes that the Act directly helped cause the 2007 subprime mortgage financial crisis.[22] Economists Robert Ekelund and Mark Thornton have also criticized the Act as contributing to the crisis. They state that while "in a world regulated by a gold standard, 100% reserve banking, and no FDIC deposit insurance" the Financial Services Modernization Act would have made "perfect sense" as a legitimate act of deregulation, under the present fiat monetary system it "amounts to corporate welfare for financial institutions and a moral hazard that will make taxpayers pay dearly".[23]

 

(From Wikipedia)

 

Anyway, the point is we should consider repealing the Federal Reserve Act instead. It's funny how in order to sustain a massive breach of freedom, you have to create a dozen smaller breaches of freedom here and there.

http://apnews.myway.com/article/20091024/D9BH4G780.html

 

A great article about the 100+ banks that have failed so far this year, and how the FDIC swoops in and tries to sell off their assets (their reserve fund is getting anemic as you well know).

 

This was a central topic at the Mises Institute Circle I attended in Greenville, Nick. The FDIC is the next big bailout to occur. And in fact, there's a quote in that article:

 

"How many banks will survive?" Alpert asked. "Loans are still deteriorating, but there are glimmers of hope in the economy. Ultimately, it's all about employment."

 

The "glimmers of hope" are all in the financial markets, not the underlying economy. Of course, prices will go up and wages will follow later due to inflation. But the key point here is there is no job-creation. The government's huge "stimulus" package didn't create a single job.

 

My guess? It's all downhill from here... short like a madman. Leverage. Christmas will be dark this year.