As various respondents to my previous post on the subject suggested, it looks now, at least according to various reports in the mainstream media, like JPM’s London CDS whale is less Moby Dick and more beached or harpooned or better described as the London CDS guppy than the London CDS whale. Indeed, perhaps, I should have called him Ahab instead?
I don’t like to see anyone lose money, even large banks, but the really unfortunate thing about JPM’s current situation (as described in the press) is that it may very well provide fodder for regulators to put in place even more onerous rules than had been contemplated. Having spent the better part of the past nearly two years in the trenches reading a lot of those rules and thinking about what is still to come, I can honestly say, I hope that does not prove to be the case.
If the rules get any more onerous (or in some cases aren’t scaled back), in addition to shrinking Wall Street President Obama may just succeed in crushing it entirely, leaving the economy in tatters (or, I suppose I should say, more tattered).
Let’s hope reason prevails and that the unforunate timing of this latest news from JPM doesn’t make the already treacherous regulatory landscape even more unenable. Although I hope I am wrong, I suspect the full gamut of Polonius-like politicians and pundits will grasp every opportunity to use this occurrence to bring back all the “derivatives are evil” rhetoric.