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Matt Levine

The Crisis Next Time and the Mergers This Week

Also: Tax shelters, convertible bond accounting, knockout options, and nostalgic floor traders.

The next crisis.

Here's Jamie Dimon's letter to investors, part of JPMorgan's annual report package. Of particular interest this year is Dimon's rather unnerving narration of the next financial crisis, on pages 30 to 34. You can be skeptical; Dimon is talking an anti-regulatory book, and it seems sort of unlikely that the next crisis will play out like the preview in a big bank's annual report. Still it's a good discussion of some of the possibly unintended consequences of the modern banking system. Here's a summary. A couple of points: