Quote of the Day: No Such Thing as Capitalism for Big Banks

In a great article about the anti-capitalist nature of big banks, James Kwak sums up the different rules medium sized business and giant financial institutions are subjected to:

In general, the mechanism that breaks up inefficient conglomerates is the market for corporate control: takeovers. But the megabanks are virtually immune to takeover (except by each other, which would only make the problem worse). For one thing, the banking regulators wouldn’t let a private equity firm take over a systemically important megabank. For another, the banks are already leveraged to the hilt, so you couldn’t issue any new debt to fund a takeover. So to buy JPMorgan, you’d basically have to come up with $150 billion in cash, which isn’t going to happen…..

In other words, CEOs and directors of midsize retail companies have to worry about being taken over by Bain Capital. But Jamie Dimon, Brian Moynihan, and Vikram Pandit have no one to fear. The basic rules of capitalism don’t apply to them.

Enhanced by Zemanta

Like Us On Facebook!

More on the Banter:

Upbeat President Obama Skips 'Naughty' TV Reporters In Year-End Press Conference

Upbeat President Obama Skips 'Naughty' TV Reporters In Year-End Press Conference

President Obama held his last press conference of the year today, and you'd never know he just got t[Read more...]
This Healthy Dog Will Die If a Dead Woman Gets Her Last Wish
MEMBERS ONLY: 'Redefining Beauty' Is a Great Idea Until You Actually Think About What It Means

MEMBERS ONLY: 'Redefining Beauty' Is a Great Idea Until You Actually Think About What It Means

The Huffington Post tried to "redefine beauty" at least a half-dozen times in 2014, but the effort i[Read more...]
North Korea Officially Named in Sony Hack as Hackers Gloat Over Victory (Updated)
Did Emperor Obama Really Lie About Not Using Executive Actions?

Did Emperor Obama Really Lie About Not Using Executive Actions?

USA Today, and now Fox News, are trying to make the case that President Obama pulled a switcheroo, c[Read more...]