I was listening to APM's MarketPlace the other day, and Heidi Moore's
analysis hit me as exactly on target:
Quote:
Ryssdal: Here's the thing though Heidi, you'd think we'd be smarter now because of that whole financial crisis thing.
Moore: No. We have the memory of goldfish. But the problems are also persistent, to be fair. I mean, the real question here is how do we make our banks profitable and are we really ready to accept less profitable banks? I can tell you that the people making $20 million a year are not ready to accept less profitable banks, so this is their kind of magical thinking. They take these big risks because they want the big revenues, they want Wall Street back the way that it was, but the way that it was is the wrong place to be. And there's no acknowledgment of that yet. We need to get Wall Street to acknowledge the trouble that it's creating for itself instead of seeing this as a government problem.
Ryssdal: Yeah, which you haven't heard Jamie Dimon, the CEO of JPMorgan, talk about at all. Let me ask you this, though, Heidi. What are the odds that banks not as strong as JPMorgan -- which is the strongest bank out there -- that other banks are doing this?
Moore: The odds are very strong. In fact, Moody's is worried about a number of those banks. Standard and Poor's is taking a look at how it measures risk for those banks as well. There's a Wall Street saying: There's never just one cockroach in the kitchen. So if JPMorgan -- the biggest and supposedly the smartest bank in the country -- is taking these risks, why would anyone else not be taking the same risks? They are under the same pressures. Where are they going to get those profits? Where are they going to get those revenues? It's the equivalent of not being able to pay the bills and taking your last $20 and going to Vegas.
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