I listened to Jamie Dimon not come clean to the House regarding unlimited rehypothecation betting in the City of London. Turns out that there is less regulation in London, and the Square Mile financial center answers to virtually no one, maybe not even the Queen!

Soon after listening to Dimon's ugly testimony, I came across Chris Whalen claiming that JP Morgan stole money from MF Global.

If Whalen's opinion is true, no account at a broker/dealer is safe from the investment bank that determines to get money from a bankruptcy proceeding. There is a loophole that allows a margin call, even from companies that are bankrupt, and the bank can accept money that comes from protected accounts. They do not have to wait for the bankruptcy proceeding and then no one is left to protect the account holders! Wow, I say.

Of course, Dimon wanted assurance that the money was not customer money, when JPM kept the MF Global money. But that didn't stop Dimon from stealing it. Maybe JPM will fix this injustice but only time will tell.

Based on Whalen's comments, the bankers cannot be trusted. Whalen makes the claim that JPM has a hand in both Madoff and MF Global. This apparently predatory behavior, assuming that Chris is right, is just disgusting.

He goes on to state that the Volcker Rule is a half measure, and wants Glass-Steagall to be reestablished. I could go for that. Bankers better not abuse Volcker or folks will call more and more for Glass-Steagall after the next housing bubble and crash.

We also need to figure a way for the City of London to get Glass-Steagall for the first time!

On down the interview, I agree with Whalen regarding stimulus failing because it all goes to commodity inflation. See my article here about this discussion. Whalen fears inflation or war as the extremes.