Over three years ago I wrote how "surprised" I was that failed AIG executives would keep bonuses that were paid for and backstopped with U.S. taxpayer funded bailout cash. Months before AIG executives had claimed that they would return the bonuses, which were tied to the casino-like bets AIG had made before the 2008 market crash.
Like "Casablanca's" Captain Renault, who was "stunned" to learn about illegal gambling activities at Rick's Cafe, I too was "shocked, shocked" [wink, wink] to learn that AIG executives would choose to keep their ill-gotten gains.
As I've written about numerous times, the problems associated with AIGs arrogance were not isolated to AIG. Our private banking problems are systemic, and have actually gotten worse since 2008.
So, yeah, this means we should prepare ourselves for another financial shocker.
To help us understand all of this Josh Rosner, co-author of "Reckless Endangerment," has written a series of articles about crony capitalism and JP Morgan. They outline how JP Morgan continues to benefit financially from corrupt and unethical practices that allow them to profit from derivative-laced gambling activities (no, what they do with derivatives is neither investing nor hedging).
The key to JP Morgans brand of crony capitalism - as the Intro makes clear - is how they cozy up to elected officials, dominate trade associations, and use their financial resources to create a layer of legal, political and media protections that insulate them from their own greed and stupidity.
Several of the case stories are long (as blog posts go), so I'm borrowing from Barry Ritholtz and posting the links to each piece in the series. Together they paint a nauseating picture of privilege, arrogance and greed.
My primary concern is that JP Morgan is just one of several Too Big To Fail casinos on our Vegas-like financial strip.
Given the bailout and legal protections that surround them, no one should be able to say with a straight face that they are "shocked, shocked" when our giant gambling dens collapse like a house of cards, again.
FYI: Here's the Wall Street Journal report - "Senate Slams Bank on 'Whale'" - on the U.S. Senates investigation into how JP Morgan deliberately misled investors and regulators about their activities and losses.
Then we have Barry Ritholtz' analysis of "Bankistan" America. It's not pretty.
And, yes, bringing back Glass-Steagall would help.