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TheStreet Open House

Despite Government Ownership Lloyd's Remains a Pirate Ship

Stocks in this article: JPM GM LYG

NEW YORK (TheStreet) -- What if the U.S. bank bailout had gone more like the government takeover of General Motors  (GM)?

In that case, a firm like JP Morgan Chase  (JPM - Get Report) might now look a lot more like Lloyd's (LYG - Get Report).

Morgan, along with America's other giant banks, like to argue they can't be broken up because they must compete with other global giants, companies like Lloyd's.

But when you're competing against Lloyd's today, you're also competing with the UK government. That government decided to be paid for its 2008 injection of capital into the banking system with shares.

At one time it owned 43% of Lloyd's, and still owns 32%.

The government of David Cameron wants to get out of Lloyd's as badly as the U.S. wanted out of General Motors, but it's taking longer and involves sales of Lloyd's assets rather than stock in a growing company.

I wonder how Jamie Dimon would have liked working for the government? On the other hand, how might taxpayers have liked being in bed with Dimon?

That's because despite the government stake, Lloyd's remains a pirate ship. It was recently implicated in a scheme involving the mis-selling of interest rate swaps. It was also implicated in the recent manipulation of foreign exchange markets.

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