Communist Banking in the U.S.
Investment bank Bear Sterns has been bailed out by JP Morgan, at least in theory, and by the Federal Reserve, in actual practice. Apparently this is because Bear Sterns is “too big to fail“.
What kind of massive regulatory failure is that?
What organization did allow BS to grow large enough to be “too big to fail”? Step forward…the Federal Reserve!!!
And they haven’t learned any lesson. JP Morgan in all likelihood will gobble up BS after a few weeks. And so, if it isn’t now, then JPM will definitely become “too big to fail”. Is that going to inspire a proper risk management attitude at JPM, one wonders? Of course not: they’ll obviously become even more reckless, getting ready to be bailed out by the Federal Reserve, if things go badly; or to pocket huge amounts of money, if things go well.
Losses are public, that is, profits are private. So much for a capitalist system.
It is time to end the merger mania. Split, split, split!!!