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On Wednesday this week Jamie Dimon we'll try to explain to congress why his company screwed up and lost over two billion dollars and a few weeks on trade that we're supposed to reduce risk.
But mark Calabria with the conservative Cato Institute says lawmakers are wrong to see this is new justification for more bank regulation he joins us now you don't.
JPMorgan -- is an example of a market that works why.
Actually because you know you're not gonna ever have regulation -- markets reduce all risks taking any risk taking is inherent in making losses.
I think one of the things that led to the crisis was an absolute lack of due diligence on the part of investors regulators.
This is a great thing and it reminds market participants that -- -- risk out there.
You have to prepare yourself.
In this was not a systemic -- this is not threatened JPMorgan they have over 200 billion in debt and equity capital so this is not to -- that was gonna bring on the firm it was not something is gonna bring on the marketplace.
So I think ultimately our markets are more robust if we occasionally remind people to kind of beyond beyond attention pay attention that you can lose some money here.
Now there's no evidence that if we -- the vocal rule Dodd-Frank of these things in place we somehow -- awarded these losses but again I think the attitude of regulation should be focused on.
What are rest of the overall system.
Not -- should be protected you know JPMorgan like it's a piece of -- -- utility can break at all you know the attitude should not be that we try to predict breaks.
From every single risk because again -- Those -- make management make shareholders pay attention and I get JPMorgan has been punished by the markets.
One of the things that I think Jamie Dimon needs to do this week is try to restore confidence not simply from congress the right political structure.
For from the marketplace in general -- to say to the marketplace I've got I've got a hold of -- some on top of the situation there are no other surprises.
You know mark I'd say that that two billion dollar loss is of great smack upside the head to make you decide to do -- -- better.
Far better than any regulation that you spent seven years it says here with the senate banking committee and ranking member Richard Shelby.
So you know the real between the lines agenda going on here if this entire hearing -- that show trials -- so that politicians get beat up on the banker and get a few votes.
Absolutely any insight you don't -- in the Democrats are sort of woken up that Dodd-Frank was not the big political winner they thought it was going to be.
And of course Republicans are you know using that as a platform in the economy -- sort of backed academy -- -- gonna see Republicans and Democrats.
On Wednesday use this is an opportunity to sort of buttress their own positions to try to make justifications from more of the things they wanna do and say listen I was -- all along so we're gonna hear a whole lot of that.
Unfortunately there's got to be more heat and there's going to be light.
But again and I thought I should say I do think it's appropriate for congress to take a look at this and asked himself with the regulators have -- last week we're heard from the regulators.
We heard from whether you know where it was the OCC doing its job was the Fed doing its job there's are all important questions asked but for the most part -- going to be a whole lot of political deal.
-- now JPMorgan even after appeal.
Biting two or three billion dollars in losses expected to earn I think four billion dollars of that very same quarter.
And so we'll keep saying this is an example of how banks are too big but I -- I wondered what -- that's an example of that it's good that they weren't that big because the loss had that little bit impact.
That's just that's -- -- what you mean look.
This is a case where a Wall Street bank lost a couple billion dollars -- we didn't have to throw taxpayer dollars out of the system did not come down.
-- mansion though the -- gains offset the losses and of course I think there's a degree if a -- pursued by the -- complain about this lost.
JPMorgan lost more in the auto restructuring the bailout -- loss.
A close to four billion in that deal they lost a billion all there on their losses on Freddie and Fannie preferred shares.
I didn't hear you cry and -- and so you know where the real losses to JPMorgan they're much -- greater concerns their lending portfolio would chased from their.
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