The New Pamphleteer

Neatness is the Enemy of Progress

May 13

JP Morgan

Q. Are bankers anarchist Marxists? A. They might as well be!

News that the American investment bank has lost an enormous amount of its own money is greatly encouraging! If the cleverest people can manage to do that…then we’re all doomed. Personally, I don’t find this idea too frightening. 

Morgan’s has declared that its losses may be about 2 billion dollars. That means that it will be far in excess of that. A general rule of capitalism is that losses are underestimated and profits overstated…

There’s a delicious irony in the fact that the losses come from the part of the bank that is charged with balancing the bank’s other trading positions. The whole point of the exercise was to “insure” the bank against its own risks. This fail-safe position has been a complete disaster. Ha ha.

I can only concur with Marx, that watching the monster devour itself is certainly fascinating - sort of mesmerising too.

Of course, if it were real money it would be serious. The point about financial services and banking, as they exist nowadays, is that they are a largely abstracted and separate system thankfully removed from the real world. The economy, as it is conceptualised, need have no effect on the real “cash” activities of growing, making and serving. It’s only when the politicians try and make it real, that things get brutal.