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Business Insider CEO, Henry Blodget, says what we now know is the truth: Wall Street is just a bunch of kids playing with dynamite. And where does the buck stop? Not with CEO Jamie Dimon! It stops somewhere over there, with some other people—who will no doubt collect a golden parachute and get a better job at a hedge fund:

Wall Street can't be trusted to manage—or even correctly assess—its own risks.This is in part because, time and again, Wall Street has demonstrated that it doesn't even KNOW what risks it is taking. In short, Wall Street bankers are just a bunch of kids playing with dynamite.

There are two reasons for this, neither of which boil down to the "stupidity" that most people generally assume is involved. The bankers who place these bets are anything but stupid.

• The first reason is that the gambling instruments the banks now use are mind-bogglingly complicated. Warren Buffett once described derivatives as "weapons of mass destruction." And those weapons have gotten a lot more complex in the past few years.

• The second reason is that Wall Street's incentive structure is fundamentally flawed: Bankers get all of the upside for winning bets, and someone else—the government or shareholders—covers the downside.

The second reason is particularly insidious. The worst thing that can happen to a trader who blows a huge bet and demolishes his firm—literally the worst thing—is that he will get fired. Then he will immediately go get a job at a hedge fund and make more than he was making before he blew up the firm. Meanwhile, if the trader's bet works—and the bigger the better—he'll look like a hero and collect an absolutely massive bonus. If you had those incentives, you would do exactly the same thing that Wall Street traders do: Bet the company, day after day. (It's not your company, after all, so who the heck cares?)

So, what's the solution? It's very simple. Congress needs to:

• Radically increase bank capital requirements, so even massive bets can't threaten the system
• Once again, separate "banking" from Wall Street gambling. Glass Steagall worked very well for 70 years—let's bring it back.
• Lay out a plan, in advance, to manage the failure of even the largest financial institutions—by stepping in, seizing the bank, firing management, zeroing out shareholders, haircutting bondholders, and then injecting new SENIOR capital (fully protected) and re-floating or selling off the firm. This will allow the entity to keep operating, and it will stick the losses where they belong—with the idiots who bought the bank's stock or loaned it money. Meanwhile, the systemic threat will be eliminated.

That's the answer. And now that JP Morgan has proven that even "the best" banks haven't the faintest idea what they're doing (or don't care), it's time for Congress to finally make it happen.That nothing changed after the financial crisis is outrageous. But if nothing happens now, our entire government should resign in shame.