More diarrhea out of Santelli's mouth this morning. He says, JP Morgan's $2 bln trading loss was the Fed's fault.
Poor Steve Liesman was trying to rebut him, but he got beat up bad by the tag team of Santelli and Kernan.
Liesman, if you're reading this: JP Morgan traded out of its OWN CAPITAL. The level of reserves in the banking system (which is what the Fed directly controls) HAD NOTHING TO DO with JP Morgan's bad trade.
Moreover, if Santelli is suggesting that JP Morgan was "incentivized" to take massive risk because low rates limit its profit opportunity, he's an idiot. JP Morgan is a commercial bank and a commercial banks make loans, that's their primary business activity. And if done wisely it's a HIGHLY PROFITABLE activity for a bank.
JP Morgan's loss was due to hubris and ego. That's the way all traders eventually go down. It had NOTHING to do with the Fed, Santelli. Want to debate that?? I'm no Steve Liesman. I'll take you to school again!