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Better Markets President Dennis Kelleher on whether J.P. Morgan losses were from the bank’s mismanagement or the government’s regulatory environme...
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Aren't dying because investors -- to cook up new regulations fast now.
And believe stocks are taking precisely because investors feared.
They're already -- right now.
That's just completely disagree is Dennis -- said that we do need better regulations.
And we didn't pass he is president -- markets and argues.
Such protections create better markets will Dennis.
You sound completely crazy to -- -- up about getting not quite but Bob disavow me of my fears that -- -- meddling again.
Isn't going to make things worse.
Well.
Nice to be with -- -- I don't know.
I do agree with you on one thing which is that the last thing we need is more regulations what we actually need is the current regulations to be finalized.
And put in place.
Another thing -- you and I agree on quite a bit you've done some terrific reporting on this is the fact that they shouldn't be bail -- in there shouldn't be access to the taxpayers' pockets of the treasury.
The key to making that happen is dealing with these too big to fail banks and JPMorgan is exhibit a of that.
Let's get 2.5 trillion dollars in assets and we find out.
That it has at a minimum of dismal management and risk controls how could this so called best -- bank can best management in the industry.
Be surprised by not knowing the big debts that were being made right within their own bank these banks -- only too big to fail they're too big to manage.
-- well and I don't know that's a very valid point we can talk about whether they're too big and bridges and too big since -- is sort of run knock him down besides I think there's a lot to be set of that.
But but some of the provisions of Dodd-Frank already in place were the supposed to police -- -- at least Marshal resources toward.
Aaron trades -- trades gone bad I don't wanna get lost in the weeds what happened here right because I barely understand it but I can sit back and look at the -- and the swap is.
We come -- he ever by regulating it again and again and again and so.
When we have Dodd-Frank -- we set out more police at the SEC and that a consumer protection agency and on and on.
We have police police in the police and forget that the Indians are running -- -- so there is no cop on the beat here real.
Well you know -- I don't know whether I should follow the Indians of the whale but leaving those suicide you're absolutely right -- you know.
Irreverence that well there's it was a wailed sprayed it was going and I know that lead to -- story and I think did regulators should have been on to it and weren't.
The firm should have been on top of -- and wasn't I think you're right there you you have just what are you lied they don't what will this was closer to -- Dodds frank getting happen.
Well in truth that the regulations actually that address this very activity are not in place in most of the Dodd-Frank regulations aren't in place.
And although probably district.
Our -- -- in excess of 200 million.
Are supposed to be alerted to -- and for this law.
Not large banks more than 200 million -- of what they're trying to do is focus on those of -- 500 billion that's that pose a systemic -- -- system.
But leave that aside those regulations are not in place right now but you're a 100% right.
That this bank should've known well about what was happening within its own our own different departments they should have been controlling for the risk -- the regulators should've known also.
But let's remember is something that happened -- unique -- is one of the reasons the stock lost a lot of value is because I think to some serious concerns about not just the competency.
But the integrity of the leadership of this company.
New economy now no I think that's -- but there's a lot of concern about.
Well intentioned guys coming in and trying to fix this again and and again.
They're worried about the government woods can't seem to -- -- trillions.
Policing a company that lost a billion -- think it's really up there argument I think deep down inside you do -- -- Well I'm not commit you know defend the government's inability to keep track of trillions but I I will say that it's.
That time.
JPMorgan Chase is gonna balance sheet of 2.5 trillion dollars it should be able to keep track of where those -- are in the risk that's happening in there.
And they didn't do that -- one of the reasons this.
Now downtrend -- another -- mechanism -- to make sure they did it right.
Bonanno you know Fitch downgraded JPMorgan today yeah -- the beginning of the week let's remember the beginning of the week Moody's talked about font of downgrading all of five biggest banks and with the -- they stated.
They were thinking of downgrading them it's because they were concerned that those banks we're gonna evade the regulations and still engage in high risk trading.
And what Moody's is worried about is that they would be big losses that what I -- -- and.
-- I'm telling you cannot tell me we just capped the worst trading week we out of the year.
And you cannot tell me that what was part of it.
Was growing concern that here comes the governments of the rescue here comes the government to add more regulation.
If you were to ask me and I -- -- CEOs all the time what holds them back.
Is this regulatory environment where there's a great zeal on the part of government to police and babies that.
And I -- -- is what holds them back from spending money and hiring I am not justifying the actions of this arm I don't know enough about what happened.
That's gonna have to be studied but the -- Israeli action in Washington is police police police.
Well I would you know at some ways I wish the government was it -- as powerful as your credited -- with affecting the stock market for the week I think the good news.
About the economy and investors is they don't pay a whole lot of attention.
-- -- -- what the government does and most importantly they're Smart enough not to pay a lot of attention to a politician say because.
Yeah doesn't know the politicians.
Who controlled the asylum run the asylum.
It's not all that far cry for me offering people fitness advise walking into that -- a Bally's fitness center and saying I got so heated up -- And furthermore they're saying the last guy we want to see.
Is -- and doing that.
Well Natalia -- what you wanna talk about something that may be holding back investors who bring in the market down it's about 10% unemployment.
Another fifteen million.
So in 200 -- salute you it's similar to no growth you also have an international news international in Europe this uses it and he's a reform law of this my child you know I think these -- and guess what now they're coming back to -- I don't know.
We forgot some.
Well in the I think you ought to give investors in the market more credit than you're giving them because I think there are a lot smarter than that.
They know what to pay attention to and what to wait and what they know I have this still there.
-- of the very intrusive government I think that's -- they're -- so they're even more aware of an avid to slow growth the economy that still has a terrible overhang.
From the financial crash of 2008.
We have high unemployment we have high under employment we have a percolating crisis in Europe.
And we have all sorts of other economic fundamentals all going in the wrong direction and on top of that.
You have a budget too big to fail banks engaging in -- you know right.
You're with me that if they get in the deep do do again a -- -- -- right.
What I want to do is I want to make sure that they are in a position that they can fail just like MF global.
Where they fail -- they fail and they don't have any systemic implications that's what we all need to be and you and I agree a 100% on that.
-- well you know want to get right on that we we agree.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- But Dennis thank you gentlemen -- very much -- -- thank.
