Obama Bullies JPMorgan: Today's Outrage
NEW YORK (
) -- President Obama apparently doesn't need to get any laws passed by Congress in order to clamp down on big banks.
Just the threat of the so-called Volcker Rule -- which would prevent banks from trading for their own account as part of a separation of commercial banking and investment banking championed by former
Federal Reserve
Chairman Paul Volcker -- halted
JPMorgan Chase
(JPM) - Get Report
in its tracks as it negotiated the purchase of RBS Sempra's commodities trading business.
In the end,
JPMorgan's deal for RBS Sempra
excludes the North American pieces, which account for 64% of RBS Sempra's trading revenue.
Instead of a $4 billion deal, JPMorgan agreed to pay $1.7 billion for global oil, global metals and European power and gas assets. So
Royal Bank of Scotland
(RBS) - Get Report
and
Sempra Energy
(SRE) - Get Report
are left shopping for other buyers.
Talk about the power of the bully pulpit!
No new laws have been passed preventing JPMorgan from buying the U.S. operations, but the bank's executives clearly don't want to take any chances. I don't blame them.
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We're witnessing a massive political shift from the previous administration, which encouraged JPMorgan to snap up Bear Stearns and set in motion the expansion of the bank's commodities trading business.
As TheStreet's Lauren LaCapra pointed out earlier this month, the
Volcker plan disrupts at least three crisis-era deals
: JPMorgan-Bear Stearns;
Wells Fargo
(WFC) - Get Report
-
Wachovia
; and
Bank of America
(BAC) - Get Report
-
Merrill Lynch
.
One administration set them up and the next one wants to knock them down. That's politics.
--Written by Glenn Hall in New York.
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