Broker risk has escalated

[FoundingFathers]

Bear Stearns, Lehman Brothers, and Goldman Sachs each reported better than expected earnings - how did they do it???

Although the increase in bond business helped, the real boost came from a page in JPMorgan's book. Trading profits have increased substaintially of late as the big boys have committed more and more capital to their trading areas. This has clealy been reflected in the extreme market volitility of the financial markets over the last 12 -18 months. The pros have done fairly well of late for their bosses with big bets on the short side (undoubtably gold shares) and the long side ( tech and even internet bets).

Trading of firm capital has always been a part of a major brokerage firm's business - but never to this degree. This more speculative philosophy trades increased risk to the financial structure of the firm (and the market) for a chance to make some quick profits.

The paper house of cards continues down its path of massive unsustainable risk and leverage that will only come to an end through a massive return to ones senses or a massive financial "accident". The system has graduated to such a degree of greed and speculation that to the participants and watchdogs it all seems very normal.

These are the times to be concerned the most.