BJMorgan Chase just took a $2 BILLION dollar dump with anther $1 Billion expected loses as investors rush in to pick over the Whale blubber. Blamed on "The London Whale" we can expect the Federal Reserve to step in and cover all bets if the loses mount too high - which will be passed on to us, the Cattle Class, in inflation, bond auctions on our children's labor and direct income taxation. Which is the way we likes it! They Play We Pay But at least we can pretend to want change by electing someone who can tell us things are going to change.
The banking unit of JPMorgan Chase alone made $12.4 billion in 2011. The holding company has over $2.26 trillion (with a "t") in assets. The holding company made $29.9 billion in operating income and just over $20 billion in net income in 2011. So, this initial loss of $2 billion represents approximately 10% of its total net profit for all of 2011, less than 6.7% of its operating income. Clearly that is a bad thing, but those losses are not likely to have a dramatic impact on JPMorgan’s long-term financial stability. Viewed another way, a $2 billion loss is about one percent of their equity and about 0.1% of their assets. Plus that doesn't account for the (relatively underreported) $5 billion in accounting gains they made on Friday May 11, which more than offset that loss: http://soberlook.com/2012/05/jpmorgan-made-some-5bn-on-friday-using.html If the Fed or Treasury bails them out, that will be cause for outrage, as JPMorgan is really doing just fine (Edit, or rather, it is not in a serious crisis, cash-wise).
It's wonderful we live in a society where financial institutions make more than the entire productive sector combined. We'll see how long that lasts. I wouldn't count that $2 Trillion dollars worth of "assets" as really being worth $2 Trillion dollars. We'll have to bust these banks up, just like Standard Oil.
