Monday, June 11, 2012

Dimon to Testify

This week the stage is set for James Dimon to testify before the senate banking committee regarding the $2 billion loss JP Morgan sustained from hedge trading losses in early 2012. Will the fall out from this reckless trading be the end of JP Morgan Chase (the losses are expected to far exceed $2 billion)? Some believe the majority of the top 5 banks in our country are on a predetermined path to extinction. I disagree with this notion.

The top 5 banks will prosper for some time ahead due to sheer size and scope. To date, the FDIC has shut down 28 banks thus far in 2012 compared to 45 banks at this time in 2011. Even though we are at nearly a 50% reduction, this is still far too many banks being forcibly closed. Once this number starts to level out to the pre-2008 figures (, consumers will feel more secure and turn to smaller, more local financial institutions to handle their banking needs. This will put pressure on the top 5 banks, but will not force them out of business.

Regulation from legislation is the question to the existence of the top 5 banks. The political lobbies of the top 5 banks are too strong and too impor$ant to the politicians to propose legislature that will lead to their demise.

For now and for later, trust First American Mortgage with your real estate financing needs. We work with both large and small banks to ensure that you are getting the Best Value available.
Thank you!