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Insiders said transparency was sorely lacking. According to "Black Swan" author Nassim Taleb:
JPM's "risk management is as amateurish as you can get on Wall Street." The firm "is vastly more fragile today than it was five years ago, and the system is more fragile today with more too-big-to-fail banks with proven incompetence at their management level."
When Dimon announced $2 billion in trading losses last month, the CIO unit had over $100 billion in asset-backed "structured vehicles," as well as another $100 billion in credit default swaps.
These type bets contributed heavily to plunging markets in 2008. Accounting manipulation conceals their severity. The worst is yet to come out.
JPM's CIO operates like a high-risk hedge fund. Taleb believes it incurs 10 - 15 times more risk. Loosing a big bet assures trouble. Lose several or more and company solvency is threatened. Other Wall Street giants are tarnished by the same brush.
Systemically destructive strategies work as planned when things go well. Otherwise taxpayers get the bill. It's a win-win scheme. Senate banking committee members did nothing to expose it.
Money power runs America. Dimon sits at its helm. Yesterday looked more like a coronation than crucifixion. It's why Wall Street gets away with grand theft.
Stephen Lendman lives in Chicago and can be reached at Email address removed .
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