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Monday, October 24, 2016

May 11 (Bloomberg) — Could Jamie Dimon really be as clueless as he sounded on the phone yesterday?

Last month, after Bloomberg News broke the story that JPMorgan Chase & Co.’s chief investment office had, in essence, become a ticking time bomb, Dimon, the bank’s chief executive officer, called the press coverage “a complete tempest in a teapot.” That explanation no longer works.

Yesterday, Dimon changed tacks. Losses on the investment office’s “synthetic credit portfolio” had reached $2 billion so far this quarter, though he refused to give any meaningful details on how that had happened. Presumably, these are derivatives of some sort, but even that basic fact was too much for the bank to specify.

What Dimon lacked in information, he more than made up for in assigning blame — to himself and JPMorgan employees. “There are many errors, sloppiness and bad judgment,” he said, as JPMorgan’s stock sank in after-hours trading. “These were egregious mistakes. They were self-inflicted.” He called himself and his colleagues “stupid.”

But there is more to it than that. Either Dimon misled the public about the gravity of the festering trades during his company’s first-quarter earnings call last month. Or he didn’t know what was happening inside the bowels of his own company. History tells us the latter is the norm for Wall Street bosses, though it’s hard to say which is worse.

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Copyright 2012 The National Memo
  • KarenMrsLloydRichards

    This so-called Master of the Universe lost us at the second word, “synthetic.”

    • ricardo mercado

      I do not have the authority to do something about this mass ,but thoughts who can should do something for the sake of the middle class and the poor and investicate these people,bring them before the courts and if found guilty put them in jail and throw away the people in congress and the president compromissed and do something.

  • rustacus21

    WAIT A MINUTE!!!!!!! Didn’t we just go thru this 3-4 yrs ago? & to top it off, where was the ‘regulatory oversite’ to guard against this?!!? Conservatives can’t do it! Moderates seem afraid to talk about it. Liberals at least talk about it. But it’s only Progressives that that have the strategies to DO what needs to be done to corral this runaway corruption ushered in by the 2001-2009 administration!!! W/this smooth ‘pimp’ talk, it’s always everybody elses fault! So why is this guy worth 500 time more pay/bonuses/stock options than the teller? This is what’s wrong. We all, by now, understand what needs to be done. See ya at the polls in November…

  • labrown69

    Break up the banks now and try every individual case of fraud. Enough was enough 5 years ago. Bailing out the banks that caused this entire economic melt down was a huge mistake and if we had acted as a democratic republic and allowed them to bear the consequences of their own fraudulent behavior, by now, thousands of credit unions and neighborhood banks would have taken the baton and run with it. Instead we have done exactly the opposite. We have put the neighborhood institutions out of business by feeding to the predators and let “too big to fail” become “too big to prosecute”. The first rule of investment is to “diversify”, never put all your eggs in one basket. We Americans are so stupid we almost deserve what we get. Let’s not make any mistake about the Obama administrations role in this via Geithner and Summers. Obama has been so misled that it is almost treason and I take little comfort from the knowledge that the GOP is even worse.

    • wayneonly

      labrown, you are right, we need to break up the “Too Big to Fail” banks. And we need to restore the provisions of the Glass-Steagall act the prevented banks from using depositor money to invest in risky investments. Then we need to prosecute bankers who violate the trust of depositors. If Dimon did not know what was going on than he was not doing his job. And if he did know what was going on he was taking risks with depositor money that was beyond reason or possibly in fact was fraud. In any case he was not earning the huge salary he is paid. Congress needs to break up all these “Too Big to Fail” banks just as they did with AT&T. They are manopolies that will eventually bring down the government and the economy of the U.S..

      But there is a bigger problem. That problem is Congress (both Republicans and Democrats). Congress (with the help of the voter) has set themselves up as the “elite” class and believe they are “entitled” to special privileges and are “above the law(s)” that govern the rest of us. They no longer answer to the American people, but instead “sell” their vote to big banks and big money interests. And we (the voter) allow them to do it by voting them into office term after term. We need to be smarter than that.

      There are three good books that every voter should read: Winner Take All Politics: How Washington Made The Rich Richer And Turned It’s Back On The Middle Class by Jacob Hacker and Paul Pierson, Throw Them All Out by Peter Schweizet, and Greedy Bastards by Dylan Ratigan. They will open your eyes to the real corruption of and in Congress. And we (the voter) need to do something about it.

      We need to RESOLVE that we will vote EVERY incumbent Congressperson out of office as they come up for reelection. The present Congress has shown that the do not have the interest of the people in mind and have only been interested in party politics and what is good for their pocketbooks and the financial welfare of their campaign contributors. It is time we vote each and EVERY one of them out as they come up for reelection.

      But that isn’t enough. As we send new Congresspeople to Congress we need to send them with OUR agenda. We cannot send them to Congress with the empty promises that they believe we wanted to hear when they campaigned, we must send them with a clear cut agenda from the voters. And we must watch their voting record, their financial dealings, and their ethics. Only then will we get a Congress that is truly “of the people, for the people, by the people”.

      • labrown69

        Wayne – yes, I quite agree. Dylan Ratigan should be president and we would all be much better off. The question is how to we go about changing the guard. Even if we vote out all the old congress, we are likely to get plenty of scum bags on the take in the new crop. As Ratigan constantly points out, we have to get the money out of politics” but that is like trying to take “the country outa the boy”.

        • wayneonly

          Labrown69, there is no quick fix. But there are a few things voters need to realize.

          1. It costs more money to get a new Congressperson elected than an incumbent. So, if the voters dedicate themselves to voting for new Congresspeople each term, big money has to put out increasing amounts of money with less results. It becomes less cost effective for them.

          2. The longer a Congressperson is in office, the more likely they are to develop more relationships with lobbies and and big banks and big money and be influenced by them.

          3. As candidates see more incumbents being voted out of office, they will be more likely to run for office. We might get lucky and get some who really have the interests of the American people at heart. We might even get some who are worthy of second terms.

          4. As first term Congresspeople see incumbents being voted out of office they will realize if they want a second term, they will have to SERVE the people instead of big banks and big money.

          5. Newly elected Congresspeople have not had a chance to be corrupted by the influence of big money nor do they have the corrupting influence of the “good old boys club” nor the influence of long term office. They haven’t learned to be as corrupt as their long term counterparts.

          6. When candidates learn that the voter will no longer put up with the way things HAVE been run in Congress and expect more from them, they will be more willing to serve the voter instead of big money.

          These are just a few of the things that could and should happen is the voters make a concerted effort to take back Congress. It won’t happen overnight and it won’t happen if the voters continue to follow the “party line”. And it will only happen if voters are willing to speak out.

          I have been trying to get this message out for the past year,but I need help. Would you be willing to help spread the message?

          • labrown69

            The apathy and sloth of the American public is impossible to over state however I am basically in agreement with you. To the extent that some can be mobilized they are still too stupid to understand. That is why republicans are still able to sell that horse sh*t about “liquidity, and free markets” blah blah blah blah!

          • labrown69

            PLUS, we all know that as repugnant as Roberts and Alito and the other wingers on the court were with the Citizens United decision and the other decisions that are despicable, having said that, without them the left would have already taken our guns and that is a big impediment.

            Chicago (McDonald vs Chicago) and Washington DC (Heller vs DC) both sued cities who had tried a total all out ban on ALL firearms within the city limits and most of the lefties on the court voted to support it. The world is more dangerous and the cops are more corrupt and non-responsive daily.

            Even though I am pro-choice and I support gay marriage and I am basically your typical liberal voter in every way, the right to keep firearms for home defense is as fundamental a right as there is to me and if the American left was not as stereotypical as the right says it is, they would figure out that they can not have everything their way and overcome their irrational fear of the tools that protect us in our homes. Even getting the economy back on track does not supersede my right to protect my home.

            The American far left has already created an atmosphere in which a burglar can successfully sue the victim/home owner, if he falls while climbing in a window to rob you. At some point the American left is going to have to come to grasps with this stuff or remain marginalized.

            While we are on this topic, how f***ing stupid was it to call the financial reform bill “Dodd-Frank”? Wouldn’t “The Greater Transparency and Accountability Act” have been a better name? How am I supposed to not think the Dems are almost as stupid as the Reps when they name this f-ing bill after two of the most hated crooks in the country? Any honest non partisan knows that these two were in the housing market scams up to their gullets. Dodd got special sweetheart deals from Countrywide’s Angelo Mozilo and Barney had to be dragged kicking and screaming to write anything of value regarding “default swaps” and other derivatives into the so called “reform bill” that bears his name. This sh*t ALL needs to be on the books. We now have a 700 TRILLION dollar “swaps” market in a world in which the GDP of all countries combined is around 60 Trillion. We are never coming back until we face this and in fact we may simply never be coming back as the hole we have dug for ourselves is just that deep.

            Maybe we are just so f***ing stupid that we deserve the worst?

          • CPANY

            We’re not stupid. We’re apathetic, because we haven’t been sufficiently aroused to revolt by a charismatic leader.

          • labrown69

            Extremely apathetic among other not particularly admirable qualities.

          • wayneonly

            Labrown69, from the voter comments I have read in a lot of political news commentaries I don’t get the feeling that the voters are frustrated. Their biggest problem is not that they are apathetic, but that they are confused and they don’t know what to do other than follow their party line. And big money would rather have them that way than to become better informed. If and when the voters decide they are fed up and are not going to take it any more, the incumbent Congresspeople and big business will lose their hold of Congress and government. We can only hope this happens before they destroy our economy and put the U.S. into another depression.

          • labrown69

            Wayne – I am afraid you are right and the scary thing is anyone who is buying into the Republican “party line” at this point is so stupid they should be euthanized. At least Dodd-Frank, Richard Cordray and the consumer protection agency and what could be a strong Volker rule now that Jamie Dimon has tripped over his own d**k at just the right time are a whole lot better than the republican version of “free markets” which to them, is synonymous with fraud.

          • wayneonly

            Labrown69, I try not to label advocates of either party as that just incites more name calling. There are some who honestly believe the “party line” of either party and then there are some who are just so confused they don’t know what to believe. The sad thing is that some believe that a change in the White House will make everything right when the real place for change is in Congress. As long as voters continue to vote the same incumbent Congresspeople into office that have brought us to this point we will have no POSITIVE change. Unfortunately, I believe we will have NEGATIVE change, possibly even another bank bailout, which could and probably will send the U.S. economy into a depression. When banks are allowed to put depositors’ money at risk without risking their own money and no risk of prosecution, they will always gamble, hoping for their own profit. It’s kinda like going to Vegas with a blank check from somebody else’s account.

          • CPANY

            Name calling is all right if the names are accurate. I believe that calling our current legislative and business leaders a bunch of elitist pricks is accurate and that it’s appropriate to call them names like that.

      • CPANY

        We need to revive the Glass Steagall Act and put the banks out of the investment business.

    • Sundance98

      This is typical of “short trading” operations. They sell the so-called Synthetic Investment Vehicles….or Specialty Investment Vehicles…or Credit Default Swaps….and they as soon as they sell as much as they can…….they short sell….for the immediate profit. However when they over sell…..things can go wrong as they did in this case.

  • For all we know, JP Morgan is betting against Greece or Spain or France.

  • 49erca

    This is just to unbelievable. Just how ignorant are we?

  • Where were the watch dogs we were supposed to have when this haywire idea of hedging??

    Does this help me be for lowering corporate taxes? Does it make me thing that geniuses are heads of corporations, not nincompoops? Am I for bailing out another bank? NONONONO
    What happened was that we left the crooks still in business. As I have said from day one, WHEN ARE THE HANDCUFFS COMING DOWN ON THE CROOKS WHO NOT ONLY PLANNED THIS RECESSION WE HAD BUT ARE STILL DOING THEIR DIRTY WORK? When we were first presented with watchers I asked how many they are going to hire to watch the watchers? Here we go again!

  • Investment banking has always been nothing more than a legal form of a ponzi scheme. Invest money in something, drain off what they can, then hope that more money will continue to come in. When the money input stops, the pyramid collapses and banks lose peoples investments, retirements, lives…… but notice how the bank officials continue to be paid huge salaries with plush benefits.

  • howa4x

    This is the biggest blow to Mitt Romney yet. Now he has to justify his hands off Wall st stance in the face of this giant loss on another bet. The taxpayers will not stand for another bailout and if this is the recklass behavior that they are doing then it’s on their dime, not ours. JP Morgan/chase is showing us what the future holds if we don’t regulate them. What are the Republicans saying now? Do they really want to dillute Dodd/Frank? Democrats need to seize on this and ram it to the anti regulation crowd once and for all.