Why We Need Glass-Steagall: JP Morgan and Citigroup

Commercial banks, which take deposits from the public and are supposed to loan that money back into the economy for productive purposes, have a fiduciary duty to not only protect the public's money, but to do so in ways that protect their customers and the public at large. It was largely because of the predatory actions of banks like J.P. Morgan and National City Bank that Franklin Roosevelt had Glass-Steagall passed. With Glass-Steagall gone, the crooks are up to their old tricks.

J.P. Morgan Chase, a bank that traces its roots back to Morgan despite several buy-outs, was reported yesterday by Bloomberg to be moving into physical commodities in a big way. Among other things, the parasites at JPMC are buying and storing oil—physical oil, not just futures—and holding it in the hopes that they can jack up the prices and turn a big profit. According to Andrew Kelleher, head of the bank's physical oil business, the bank owns storage tanks in Canada, Denmark, South Korea and Singapore, and has supertankers filled with oil in the Mediterranean and off the coast of northwest Europe. Kelleher said that the bank "made over a billion [dollars] last year" in commodities.

Citigroup, whose main banking unit grew out of National City Bank, recently announced the sale of its highly profitable commodities unit, Phibro, to Occidental Petroleum. Citi, a ward of the Federal government, had been under significant pressure to avoid paying Phibro head Andrew Hall the $100 million bonus called for in his contract.

When a bank makes enough speculating in commodities to pay one person $100 million, something is seriously wrong. When banks are hoarding oil in the hopes of gouging the public, the system is seriously broken. It is high time that we put a stop to this criminal activity, by putting the banks back under a Glass-Steagall standard, and cracking down on the speculation that is ripping us all off.