The Smithsonian has preserved this photo of John Pierpont Morgan. It gained renown in its day for the illusion of a dagger – actually the arm of his chair – in his left hand.
When the photos was taken in 1903, JP Morgan & Co. dominated the financial world. Morgan was at the height of his power. A steel, electric power and railroad mogul, he had enough influence to control these huge segments of the U.S. economy.
Recent reports from the New York Times have shown that while JP Morgan is no longer with us, his bank is just as much about cutthroat capitalism as its founder.
Community bankers of Iowa found humor in large banks’ market manipulations at CBI’s 42nd annual convention at the Arrowwood Resort and Conference Center in Okoboji, Iowa, on July 18-19.
In his first address as 2013-14 CBI Chairman, Rod Rowland said small banks face unprecedented uphill battles, particularly against large banks. “We are up against the too-big-to-fail, too-big-to-jail, and apparently too-big-for-ale megabanks,” said Rowland, echoing Independent Community Bankers of America President Cam Fine’s blog post which scolded large banks for their manipulation of commodity prices.
The comment referred to a recent The New York Times investigation that found Goldman Sachs owns warehouses in the Detroit area between which it has shuffled supplies of aluminum to exploit pricing regulations. The large bank used this commodity ring-around-the-rosy to lengthen the storage time thus increasing the rent owed Goldman Sachs.
In the end, the large bank’s dabbling in commodities has increased prices for those who drink alcoholic beverages from a can. Bankers at the CBI conference concurred with Fine, these market manipulations are hard to swallow.
Don’t miss our coverage of the people, ideas, and trends that make community banking so vibrant in the upcoming issue of NorthWestern Financial Review. It hits bankers’ desks September 1.