Make believe magic voodoo composite hedge

That’s what a regulator called the “hedge” that lost JPMorgan $6 billion last year.

The Volcker Rule was supposed to stop proprietary trading by the banks. A clearer name for proprietary trading is “banks betting with FDIC insured deposits”. That is supposed to end.

But, by law it should have been implemented last year but we are now told it probably won’t be “effective” until 2014 (despite the best efforts of our friends at Occupy the SEC).

And when it is, it will only be “effective” in the legal sense of “in effect” not in the English meaning of doing what it is intended to do.  It will not ban hedges which are basically whatever the banks say they are — even “make believe magic voodoo composite hedges”. So, proprietary trading will be alive and well.

So, the megabanks are still Too Big, Interconnected and Complex to Oversee (TIBACO), and they are still abusing the privilege.

Should JPM CEO Jamie Dimon go to jail for lying to shareholders and Congress?

Don’t hold your breathe waiting for this to happen.

Do, get involved in working to stop the banks abusive practices.