Bravo Mark Carney

I admit it. I love re-purposing material from Mish Shedlock.

Mish is an investment advisor and digs up great material for his Top 25 Financial Blog.

I'm a trader; I don't have the time to surf the web like a ferret. But I like how Mish thinks, so I use his stuff whenever he's missed something.

Because let's face it, anyone who has well over 4,000 Twitter followers yet follows NO ONE, deserves it.

So thank you, Mish.

I especially liked his story today about Jamie Dimon's tirade at Bank of Canada Governor Mark Carney. Quoting from an FT story:

Jamie Dimon of JPMorgan Chase launched a tirade at Mark Carney, Bank of Canada governor, in a closed-door meeting in front of more than two dozen bankers and finance officials, underscoring mounting tensions between bankers and officials over financial regulation.

Mr Carney then delivered a speech to global bankers at the Institute of International Finance, and had this to say:

“If some institutions feel pressure today, it is because they have done too little for too long, rather than because they are being asked to do too much, too soon,” he said.

Slam.

Dimon got called out. Carney nailed it.

Mish wrote that the dispute was over rules agreed by the Basel group of international regulators that would force all banks to hold 7 per cent core capital against risk-weighted assets.

The point he missed is this: when a banker whines over having to hold just 7% core capital against his risks, he's got an enormous problem lurking somewhere on his balance sheet.

Why might Dimon be feeling such pressure? Because JP Morgan has the highest derivative exposure of any US bank.

Consider this from Zero Hedge:

The latest quarterly report from the Office Of the Currency Comptroller is out and as usual it presents in a crisp, clear and very much glaring format the fact that the top 4 banks in the US now account for a massively disproportionate amount of the derivative risk in the financial system. . . .

The top 4 banks: JPM with $78.1 trillion in exposure, Citi with $56 trillion, Bank of America with $53 trillion and Goldman with $48 trillion, account for 94.4% of total exposure.

People often ask me what they should do with their money. I tell them the same thing each time: get your money.

In this environment, it is a good idea to raise some cash, take it out of your account, and put it in a safe deposit box.