On the one side we have the Fed and other in the government demanding that the big banks bulk up their capital and get rid of risk. Fortress balance sheets is the their goal. On the other we have Obama and Holder launching a personal vendetta against Jamie Dimon for having the audacity to actually man up and speak out against the bad parts of Dodd- Frank and other regulatory issues, and to defend the industry. JP Morgan has not only been fined the new $13 billion, but many billions more deeply reducing the capital that the Fed says they have to have to defend themselves against the next crisis induced by the next Barney Frank. Not only did Jamie do a terrific job of managing the bank through the crisis, but he stepped up and solved the government's problem of Bear and WAMU for which they are now suing the bank for things JPM had absolutely no part of. They attack B of A for stepping in and bailing out Countrywide which was about to collapse, which was a really bad situation, for which the shareholders of B of A are now paying a huge price despite B of A not being responsible for any of the bad acts of Countrywide. When the Whale debacle hit, Jamie acted decisively and correctly, fired people responsible and cleaned up the mess fairly quickly and then admitted his own failures. He took a multimillion dollar hit personally in his bonus. Has anyone been held responsible for Benghazi, or the unfolding Obamacare computer fiasco and failure. The IRS continued paying the woman who seems to be at the heart of the scandal. Then Obama fired the IRS commissioner who had already resigned. You can't quit, I need to say I fired you. It is inconceivable that any major bank will step up and save the day when the next crisis hits. Why would they unless they first get total immunity from the government. That is the real risk to the system. Dodd Frank will not undo that damage.

The war on the banks is largely political and damaging to all of us as real estate borrowers. It is not that there should not have been fines, and people fired for doing bad or stupid things, but this is now a political vendetta waged by a president who vilified the bankers and now has attacked their capital base. Giving money or principal reductions to homeowners who knowing borrowed too much or lied, and who have lived in their homes for as much as three years for free during dragged out foreclosure processes, has only served to create the next moral hazard which will show up sometime down the road. Millions of people now are convinced it was all the greedy banks fault, and they are not to blame for being greedy by buying too big a house and borrowing too much. The government will just bail you out and make the banks pay you for being irresponsible or a liar. By announcing this latest giant hit to JPM, the administration just reinforces this moral hazard problem. These things do change the prevailing culture, and it just gets hammered home by the media who have little to no understanding of the real issues.

None of this excuses the outrageous and stupid lending that went on from 2005 through 2008, but that will not happen again for at least 10 years and maybe more. In time there will be another version of it, but for the foreseeable future, lending will be reasonably responsible.