Thursday, April 08, 2010

The battle is being fought at multiple fronts

Dimon fully understands – although he can’t concede in public – the private advantages (i.e., to him and his colleagues) of a big bank getting bigger.  Being too big to fail – and having cheaper access to funding as a result – may seem unfair, unreasonable, and dangerous to you and me.  But to Jamie Dimon, it’s a business model – and he is only doing his job, which is to make money for his shareholders (and for himself and his colleagues).

What the popular press captures most often is the man on the street battle. It is gritty, real, has political theater and drama written all over it. That is your tactical battle front. Unemployment rates, mortgage collapses, etc.

There is a behind the scenes battle happening which is more of a strategic battle. Simon Johnson (excerpted above) is one of the players in this war. This i s a war over sophisticated business models that are so complicated that only a handful of people understand them to debate them meaningfully. The scary part though is that these models can have devastating consequences.

I recommend you keep up with this blog if you want to stay informed.

Posted via web from Staysmall's posterous