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GS, JPM, MS et al: No Longer Just Banks

Posted by Larry Doyle on July 10, 2013 7:49 AM |

Can we all agree that banks that are too big to fail, regulate, and prosecute are also too big to exist? That premise strikes me now as a foregone conclusion.

But how have the banks gotten bigger? It is not merely via the issuance of home mortgages, credit cards, corporate loans, and some derivatives transactions.

The new rent-seeking, market manipulating economy that is coming to define the American landscape is reflected in a host of other ways. Should we even call these institutions banks anymore? 

With a hat tip to our friends at eWallStreeter and Zero Hedge, let’s look at how far and wide Wall Street has spread its global corporate footprint.

June 27, 2013

The Honorable Ben Bernanke
Chairman
Board of Governors of the Federal Reserve System
20th Street and Constitution Avenue N.W.
Washington, D.C. 20551

Dear Chairman Bernanke,

We write in regards to the expansion of large banks into what had traditionally been non-financial commercial spheres. Specifically, we are concerned about how large banks have recently expanded their businesses into such fields as electric power production, oil refining and distribution, owning and operating of public assets such as ports and airports, and even uranium mining. [Isn’t that a national security issue?]

Here are a few examples. Morgan Stanley imported 4 million barrels of oil and petroleum products into the United States in June, 2012. Goldman Sachs stores aluminum in vast warehouses in Detroit as well as serving as a commodities derivatives dealer. This “bank” is also expanding into the ownership and operation of airports, toll roads, and ports. JP Morgan markets electricity in California.

In other words, Goldman Sachs, JP Morgan, and Morgan Stanley are no longer just banks – they have effectively become oil companies, port and airport operators, commodities dealers, and electric utilities as well. This is causing unforeseen problems for the industrial sector of t