The Financial Times reports tonight that press favorite Jamie Dimon, CEO of JPMorgan Chase, that regulation is going to kill off our cherished too-big-to-fail banks, without which our economy would surely flourish… er, I mean perish:
“If you want to set it so high that no big bank ever goes bankrupt … I think that would greatly diminish growth,” he told a US Chamber of Commerce conference. Too large a disparity in capital requirements between Europe and the US would mean “you’re pretty much putting the nail in our coffin for big American banks,” he said.
Sounds good to me! Alas, Dimon is almost surely full of it.
Then there’s this:
Attacking another aspect of Dodd-Frank, Mr Dimon said rules requiring companies to put up collateral as they trade derivatives would “damage America”. Gesturing at the chief executive of Caterpillar, Mr Dimon predicted the industrial company would take its derivatives business to Singapore.
Again: A feature, not a bug.
— Bloomberg News writes a curtain raiser on the Fed’s discount window-info, which it sued all the way to the Supreme Court to get and which will be released tomorrow.
Craig Torres and Bob Ivry use previous FOIA requests, ones that were actually complied with, to report what dead banks show us about the lending.
Ordinarily, the discount rate is set at a penalty, or above market rates, to prevent overuse of government credit. It was 1 percentage point higher than the federal funds rate — that is, the overnight lending rate for banks — for most of 2007. When default rates on subprime mortgages began to increase that year, Federal Reserve Chairman Ben S. Bernanke and the Board of Governors in Washington reduced the discount rate.
They cut its spread over the federal funds rate by half on August 17, 2007. Loan terms were extended to 30 days from overnight…
By December 2008, the discount rate stood at just 0.5 percent, below the market rates paid by many banks for funds. The average 3-month consumer deposit rate that banks were paying at that time was 1.44 percent, according to Bankrate.com. The cost of borrowing dollars for three months in London, or the 3- month Libor rate, averaged 1.48 percent in the last two weeks of the year.
The discount rate amounted to a public subsidy — and as such, the loans need to be disclosed, said Robert A. Eisenbeis, a former Atlanta Fed research director who is now chief monetary economist at Cumberland Advisors Inc., an investment management firm based in Sarasota, Florida.
That’s some smart reporting.
It traces how a brite about Obama having an iPad got twisted into something more insidious as successive media rewrote each other’s story. It went from Univision town hall to CNN.com to Mac blog, to NBC affiliate and, it almost goes without saying, on to Fox and Drudge:
I’m not sure if FoxNews.com saw Drudge or vice-versa, but FoxNews.com now has now ripped off first grafs of NBC report ( here).
So one innocent Obama remark about owning an iPad turns into “Obama gets special favors from Apple” meme-in-waiting. Really. This allows commenters on all sites to drool on about what a creep Obama is and make lame “there’s an app for that” “jokes.”
Obama may very well have called Jobs himself and gotten an iPad 2. Jobs might have sent him one, unrequested. But we don’t know any of this. This is what happens when you lay off lots and lots of reporters, consolidate, and destroy local media. Among other things.
Read the whole entry and make sure to click to see the stories. I hereby nominate this for the Hamster Wheel Hall of Fame.
Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at firstname.lastname@example.org. Follow him on Twitter at @ryanchittum.
Tags: Bloomberg News, Financial Times, Freedom of Information, Hamster Wheel, Jamie Dimon