JPMorgan Chase is negotiating with the U.S. regulators over the fine it will pay to put all its mortgage-backed securities nonsense behind it, bit of a bad patch, all is forgiven. At the moment, the figure hovers around $11 billion (U.S.).

That sounds like a lot, you may think, especially after its $920-million fine last week for the $6-billion London Whale loss. It is not. It is chicken feed. U.S. regulators began meeting in January to discuss fines for crimes committed in the 2008 financial crash, a full four years after all our lives changed. In the meantime, banks in the U.S. and Europe have been paying huge fines. Surely that must worry them. It does not. Washington lawmakers are paralyzed.

In Britain, the PPI (payment protection insurance) — more on the Canadian version of this to come — scandal has caused the banks involved to set aside an astounding £16 billion in case they have to make a settlement. This was more than twice the cost of the London Olympics, as Britain’s resident finance-scandal explainer John Lanchester wrote, gobsmacked, in the London Review of Books in July. The BBC suggests that the insurance swaps scandal could hike the final figure to £25 billion.

Lanchester is a novelist. When only a novelist can find the words to translate the financial world to the average citizen, that citizen is in deep trouble. For Lanchester’s explanation is partly this: Fines don’t matter. The big banks do as they please, seeing government fines and other penalties as part of the cost of doing business.

There’s a reason Jamie Dimon looks so hale. There may have been a time when a bank CEO could not survive having presided over such deplorable corporate behaviour but those days are gone. The banks don’t worry about a deal going wrong, they worry about negotiating the cost and now fines are just part of the cost.

It’s like the police placing huge loads of bagged white material on a table at a press conference and blue-skying the street value of the crystal meth they seized. It looks and sounds so marvellous that the viewer never asks about the meth the police didn’t seize and the underground labs that are continuing to make it.

This is the sorrow and the pity of financial journalism. Most readers, me included, have difficulty relating big events to their own crisis. The figure that matters to them is the dollar amount on their paycheque.

Last year’s Libor scandal — in which interest rates that govern everybody’s lives worldwide were plucked out of the sky by some guys on the phone in London — doesn’t seem to have anything to do with it, although it has everything.

Libor did us great harm, but in an amorphous way, like a distant black cloud rained lightly on everyone. We’re wet but we’re clueless.

Equally, people have a hard time grasping the economics of their own industry. This is why teachers are so willing to strike, why unions insist on last-in first-out even though a smart older worker would grab that pension and go.

Mark Carney, late of Canada, has his own problems at the Bank of England in a country where the banking sector is five times the size of the entire economy. Here in Canada, I remain puzzled by the blasé reaction to Finance Minister Jim Flaherty’s August decision to limit the amount by which banks can profit from the generosity of Canada Mortgage and Housing Corp.

Basically, CMHC encourages home ownership by offering insurance for low down-payment mortgages, meaning that if you lose your job, the mortgage that you could barely afford will be covered by government money.

CMHC had been allowed to guarantee $85 billion of mortgage-backed securities in 2012 but banks were heading up to the limit so quickly ($66 billion by July) that Ottawa became alarmed and cut back lenders to an immediate individual cap of $350 million.

That’s astounding. I don’t mean the cap, nor the amounts, but the fact that government-insured mortgages were ever securitized in the first place. In the “shadow banking” sector, which means non-banks doing bank-like things, pools of mortgages backed by taxpayers are being repackaged for investors.

It’s hardly a bet. Those mortgage claims are backed by you, the taxpayer. If you’re holding out for a condo bubble burst in Toronto, don’t. Ottawa might be on the hook for a lot of failed mortgages and the result will be a local downpour, not a light rain.

And as the Star’s Ellen Roseman has reported, Ottawa also backs 90 per cent of mortgage insurance issued by private insurers.

This story was largely covered from the point of view of prospective homebuyers. But we shouldn’t worry about people fortunate enough to be renting, we should worry about how much we are on the hook for bad MBSs (mortgage-backed securities).

Maclean’s has been covering this story with a hard head. As Erica Alini wrote in June, “MBSs backed by government insurance currently make up about a third of all outstanding residential mortgage credit in Canada, up from one fifth.” These are astounding figures.

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The Bank of Canada has no problem with this, is calm and reassuring. It’s not like the U.S. in 2008, Alini reports, where investors fled as mortgage securities tanked. In Canada, they won’t tank. They’re backed by Ottawa.

But this brings up another set of problems. Say Ottawa did get stuck with the bill. Farewell three-station subways in Scarborough, farewell national parks, armed forces, railroad safety, old-age pensions, EI, farewell to all the good things that taxes pay for.

This is the fear, this is the dread, that we will have to reframe our small fears to fit huge complicated financial matters that bypass our understanding.

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