Jamie Dimon Eats $2 Billion Worth of Crow

If you are the CEO of a major global bank and you have to announce a $2.0 billion trading loss, you will no doubt feel that the shareholders, regulators, and reporters are all against you. But if you announce that the loss occurred in a portfolio that just six weeks earlier was the subject of criticism in the press, and which you described as nothing more than “a tempest in a teapot”, you are entitled to feel that the gods are against you.

The gods definitely have it in for Jaime Dimon, CEO of JP Morgan Chase, the legendary “fortress balance sheet” bank that prides itself on having avoided problems during the housing bust and credit crisis of 2007-2008. Someone inside the bank blew a large cannonball through the bank’s fortress walls, and it seems likely to have been “the Whale” of the credit derivatives market, JP Morgan’s Bruno Michel Iksil.

Messr. Iksil was identified in The Wall Street Journal as the trader whose transactions were so large he was moving an entire market (hence his earned sobriquet as the Whale). According to the press reports of early April, he was selling credit default swaps on a portfolio of corporate bonds. Credit default swaps are derivatives that act like insurance products – the buyer of the swap receives a cash payment from the seller if the corporation that is the subject of the swap enters into a credit default. Messr. Iksil was betting that the credit condition of the corporations involved in his portfolio would improve over time. The buyers of this credit protection were betting the opposite – that these corporations over time would worsen in terms of credit quality, and likely be subject to credit rating downgrades. The buyers of this credit default swap index were large hedge funds, and the press implied that they were buying precisely because they wanted to be on the opposite side of Messr. Iksil’s trade. If true, this is in market terms a damning statement, because it says the professionals smelled an opportunity to gang up on the Whale and force him to disgorge his position at a large loss.

There is nothing disreputable or illegal for hedge funds to do this, though this doesn’t happen very frequently, because it is unusual for any one trader to take on so much risk that prices for all instruments in the market are affected by his trades. It is even more unusual for JP Morgan to be caught in such a situation, but this isn’t the conservative, Aaa rated JP Morgan of old. This is Jamie Dimon’s bank, a point he made clear in the press conference today when he was asked whether this trading violated what is known as the Volcker Rule, which severely limits the ability of Too Big To Fail Banks to take on market risks for their own account. “No,” said Mr. Dimon, “but it violated the Dimon Rule.” When an institution of 250,000 employees depends on one person, the chairman, to keep it out of trouble with rules he invented, too much risk is riding on the shoulders of that one person.

This is Jamie Dimon’s Baby

There is no doubt that Mr. Dimon’s hands are all over this loss, in the sense that he built up the London-based unit (the Chief Investment Office, or CIO), which is responsible for the loss. In 2005 he appointed a Chase executive, Ina R. Drew, as head of the CIO, and instructed her to become more aggressive in taking on risk. Ms. Drew is no stranger to taking on large market risks, so this was an invitation to open the floodgates, which she certainly did. Mr. Dimon admitted that in recent years the amount of investment money Ms. Drew had to play with doubled, to $360 billion (according to former employees).

Jamie Dimon was also forcefully asserting that what the Chief Investment Office was doing was not trading, but hedging. This is largely a distinction without a difference, because both activities involve taking on market risk – the risk that losses might arise from price changes affecting financial assets like stocks, bonds, commodities, foreign exchange, and derivatives associated with any of these instruments. The difference between what Ms. Drew does and what a trader does is that Ms. Drew manages the market risk that arises from JP Morgan’s balance sheet, while traders manage the off-balance-sheet risk from assets bought and sold with the bank’s customers.

In Ms. Drew’s long history as a balance sheet risk manager, which dates to her days in Chemical Bank before it merged with Chase Manhattan (which later merged with JP Morgan, all of which merged with Bank One bringing Jamie Dimon as CEO), Ms. Drew toiled quietly but effectively, hedging what were already substantial risks because of the huge balance sheets the top US banks had even in the 1980s, when she started her career.

Back then, the biggest risk to manage was interest rate risk, which was an inevitable outcome of any bank’s operations, because banks “short fund” their assets. This means if the bank has a portfolio of loans earning 5%, it is going to finance this with short term liabilities (deposits and trading instruments including derivatives) costing about 3%. The difference in earnings is known as the “interest rate spread”, and going back even decades ago, these earnings were much, much bigger than anything reported by the trading room of the bank.

What if, however, the Fed starts aggressively raising interest rates in response to an overheated economy? This has happened before in the US and many other countries, especially in response to dangerous inflationary outbreaks. If the cost of liabilities goes up to 6%, the bank cannot avoid this cost because it is short funding, meaning it rolls over its liabilities every month or so on average and its rate of borrowing quickly ratchets up to 6%. Its assets, meanwhile, are long term in nature and cannot be easily changed, so the loans still earn 5%. The interest rate spread has gone negative, which is going to cause enormous losses – again, much larger than a trading room would experience.

This is the risk Ina Drew has been paid during her career to manage. She is what is known as an asset and liability manager, and these people toil anonymously in bank treasury departments, working for the Chief Financial Officer, and not for the trading department. Typically they have not earned the enormous bonuses traders get, ironically because the size of the risks they manage – the entire balance sheet of the bank – could make them billionaires if the same bonus formula was applied to their profit-making potential as has been applied to trading activity.

Changes Come to the Asset/Liability Management World

Beginning in the late 1990s, the world of asset and liability management changed dramatically for the big banks, and Ms. Drew is a beautiful example of how the job became much more powerful.

1) With all the mergers that had been occurring, JP Morgan Chase as the surviving entity has a balance sheet in excess of $2 trillion, which is a risk to the entire US economy considering the GDP of the US is $15 trillion.

2) Ms. Drew came into her job as head of the Chief Investment Office in 2005, and a few years later after the credit crisis of 2007-2008, she was handed an asset and liability manager’s wet dream: the Fed set interest rates for banks at 0%, and more important, has now promised to keep them there until at least 2014. This has been the mother of all short funding opportunities, because there is no risk involved. The bank can keep borrowing month after month at 0% and earn the entire return on its assets as the spread. This is a back-handed bailout of the big banks engineered by the Fed, with no say from Congress or anyone else. Jamie Dimon in his press conference said the CIO has unrealized profit in its portfolio of $8 billion, and it took $1 billion of that into income to offset its $2 billion trading loss.

3) The Federal Reserve has provided yet another back-door bailout to the banks besides zero percent interest rates. With all of its Quantitative Easing programs, and its new Operation Twist program, the Fed has flooded the banks with free money, in the form of Federal Funds paid when banks sell the Fed their riskier assets. The banks are supposed to lend these reserves back into the economy, but they haven’t done so because the credit risks are too high. Corporations which have sound credit ratings don’t borrow from the banks anymore, and the consumer is already overloaded with debt that has caused big losses for these banks. So banks merely invest these reserves in financial assets, like stocks, bonds, commodities and derivatives. This is why Ms. Drew’s investment portfolio could double almost overnight to $360 billion when the bank has barely increased its lending portfolio at all.

4) Because of these developments, Ms. Drew’s unit has taken on a vital role in the bank’s fortunes. Her unit alone in some quarters has generated 25% of all of the revenue of the bank. Ms. Drew personally took home $14 million in salary and bonuses last year, and the people under her like Messr. Iksil are millionaires as well.

5) When interest rates went to zero, and when the role of the risk manager became simply that of managing the return on assets (since liabilities no longer cost anything), it is no surprise that Jamie Dimon ordered Ms. Drew and her unit to maximize this return – to find assets earning as much as possible, even if it meant taking on assets with greater credit risk.

6) The reason the bank could do this is because around 2000, banks discovered they had tools that could be used to manage credit risk, and not just market risk. The tools were derivatives known as credit default swaps and credit default options, the very tools which were used to manage mortgage risk and which blew up spectacularly when the housing bubble burst. This is where Messr. Iksil comes into the picture – he has been managing the credit derivatives portfolio, and in a sense the credit risk of the whole bank, for Ina Drew. Considering how enormous the balance sheet of JP Morgan Chase now is, if Messr. Iksil merely hedged a portion of that balance sheet, he would still be known as the Whale.

This is Why We Need the Volcker Rule

All of this sets the stage for today’s announcement of a $2 billion loss in the CIO unit. It reminds everyone of the press reports six weeks ago describing outsized trading done by Bruno Iksil. Mr. Dimon would not identify the culprit by name, and there are some indications that the problem is bigger than just Messr. Iksil – the whole CIO unit is under review. Mr. Dimon would only say that “In hindsight, the new strategy was flawed, complex, poorly reviewed, poorly executed and poorly monitored.”

There is an awful lot of crow-eating in that one statement, and Mr. Dimon did some noticeable self-flagellation in today’s conference call. It is part of Mr. Dimon’s charm and why the analysts love him – he owns up to his mistakes. And these were, ultimately, his mistakes. He set the unit up; he charged it with increasing its risks in a big way, including using credit derivatives; he runs the bank like it’s a personal fiefdom, meaning a lot rides on his judgments about risk and return. If the strategy was poorly monitored, it is partly because the market risk oversight function of these big banks does not extend to looking carefully at what asset and liability managers do. Remember, they are “hedgers”, not traders, and the banks get caught up enough in this arbitrary distinction that they allow their hedgers to avoid the more rigorous controls imposed on trading. Which is also why Jamie Dimon has been spending months now in Washington working with the Federal Reserve to water down the Volcker Rule, which is part of the Frank-Dodd Act of bank reforms meant to prevent a replay of the credit crisis. This would also explain why the strategy at the bank was poorly monitored; in a one-person show like JP Morgan Chase, the CEO was too busy to monitor it.

Mr. Dimon did admit that this fiasco is going to revive the debate about the Volcker Rule, and perhaps undermine his careful work of exempting the CIO unit from the Rule because it is a hedging and not a trading unit. Mr. Dimon was purposely vague about exactly what the positions were, but if the press reports from April were correct, Messr. Iksil was selling credit default swaps. If he were hedging the loan portfolio and the risk that credit would deteriorate, he would be buying credit default swaps. So what was Messr. Iksil really up to? To the outsider observer, it sure sounds like speculation.

This is what Sen. Carl Levin thought, as evidenced by his statement today. “Today’s announcement is a stark reminder of the need for regulators to establish tough, effective standards… to protect taxpayers from having to cover such high-risk bets.” Sen. Levin is dead right; if a trading or hedging loss is big enough in a bank Too Big To Fail, the taxpayers must cover the loss. Good luck, however, on getting the regulators to do anything about this. The Fed will set up an investigation and tut-tut for awhile, maybe even placing Jamie Dimon in a public doghouse of shame, but it will all blow over and be forgotten, The Fed exists to carry water for these big banks, which is exactly why it was watering down the Volcker Rule in the first place.

The only outside chance something might change is if this loss gets much larger. Jamie Dimon said that is a possibility, since they are going to hold on to the credit default swap position for some time. Remember, on the opposite side of these trades are major hedge funds, and in their shark-eat-shark world, they smell wounded prey. They are going to do their best to push rates further against JP Morgan and force them to cough up even more blood. Some observers estimate the loss in that situation could reach $20 billion, and if that happens taxpayers better hold on to their wallets.

At that point Jamie Dimon would probably regret touting his bank’s fortress balance sheet and excellent risk management skills. Maybe he does already. Since his family is of Greek background, he probably understands better than most other bank CEOs that the gods inevitably punish hubris.



Jamie Dimon eats $ 2 billions worth of crow

Jamie Dimon has been touted as Midas. But $ 2 billions worth of crow proves that he has been "gold plated," like those U.S. "gold plated" weapons that cost millions to built but are useless in battle, and most don't even go into production - after the U.S. spends $ billions to design and test them- like the $ 150 billions wasted on the army's "Persuader Cannon" whose production was scrapped!

I am surprised why Dimon hasn't resigned yet, or why the JP Morgan Chase board of directors hasn't fired him. It is probably because JP Morgan Chase hasn't lost it own money; it lost the investors money. Nothing to worry about. After all, when the Wall Street collapsed a few years back, the executives not only were not fired, but when the federal bailout funds came in those losers executives shared $ 300 million in bonuses from the taxpayers money.

I won't be surprise if Dimon receives a $ 15-20 million bonus in the next few months! Dimon would certainly eat crow, but with 24 carat gold silverware!
Nikos Retsos, retired professor, Chicago

No real lessons until forfeiture and real prison time

This story will go on and will be repeated in this corporate boardroom or that trading desk. It will be repeated because the taxpayer is on the hook for the losses and the culprits are never truly punished.

No one is surprised by this who reads the real news on the blogs - we knew about the massive derivatives out there and still outstanding liabilities in the trillions these people hold. Just as oil and silver and gold manipulation is no surprise and going on daily, but the MSM will just learn about that in a few years. It seems the fawning press was shocked, but then the truth shouldn't stop Facebook 24/7 coverage or the inevitable pump-and-dump scam from happening.

Dimon will apologize, try to blame a few people below him, develop memory loss when appropriate, talk about the mistakes that were made and only he can fix the issue because he presided over the mess. Isn't that quite a scam! Just as Corzine did, just as Murdoch did, and on. Did the Koch Bros. ever face real prosecution for violating sanctions with Iran? Nope. Murdoch for hacking and bribes? Nope.

The fawning press and paid-for politicians don't want to hold this "job creator's" feet to the fire, so he'll get a pass or retire with a massive bonus. And if push comes to shove, the diseased banks can always claim, "if you destroy us, we are so ingrained and large that you will kill the host." IT's GREAT TO BE A PARASITE!

Compare a store manager. Comes up short $500. Can he say, taxpayers, come bail me out? Can he get a massive salary and a bonus and find another job if forced to retire. Nope. No job for him. No sympathy. No CNBS coddling him.
Until these people and institutions face real investigations by honest and driven folks, they are arrested for insider trading, manipulating commodities, endangering entire nations, they will smirk and laugh on the way to the Hamptons or Davos. Real arrests, real loss of all their wealth, and real prison time in a real prison. You think these people wouldn't change their actions facing the loss of all their ill-gotten wealth and the thought of one count of a federal or state crime sending them to a MAXIMUM SECURITY PRISON for 10+ years? Of course they would change, and right quick. Under state law, the prison is determined by the length of time one serves, so no camps are available. One count of lying to a fed is a real crime and so incredibly easy for lazy prosecutors to use - and yet they never use it. The USCode is filled with laws that could apply and are easy to charge these criminals with, but the feds won't and they will prevent states from prosecuting the cases because they are "federal matters." And so the story repeats itself.

Losses could extend to $20B?

I personally think we need certain derivatives outright banned and a return to full-bore glass-steagall, plus break up the TBTF banks. I mentioned the FDIC plan in my JPMorgan Chase. Interesting both of us used the exact same term to describe JPMorgan Chase, hubris.

I also briefly mentioned the new FDIC plan, we have now "living wills" and on and on about closing down large banks, but hello, didn't JPMorgan Chase with CDSes and derivatives just do precisely what caused the financial crisis, yet we cannot get these derivatives banned, regulated, monitoring, including approval for their actual model?

This drives me nuts because no one mentions their mathematical model the derivative itself, is front loaded with contagion and massive risk, potential losses. How can these "bad math" structures even be allowed?

My take on JP Morgan Chase is here.

Excellent Analysis, clearly

Excellent Analysis, clearly laid out and financially on point. To date, this is the only article I have read anywhere over the past two days that clearly explains the situation at JPMorgan from both a holistic market perspective and the current credit default swap position situation.

One point I would like to raise (and this is only because I worked closely with JPMorgan's Senior Executives until recently and have an insider's viewpoint) is that while Jamie is an incredibly hard-working and hands-on manager, it is by no means "a one-person show" at JPMorgan. The other business unit managers definitely play a part in JPMorgan's success (and in this instance the unfortunate failures).

Having said all this, I think it is time to go back to safer banking practices and to (re)enact regulations that are meant to protect us from exactly the kind of market turbulence and ground-shaking losses that have been occurring since 2007. If I never hear the word derivative again in the financial context I will be a happy camper.

Ina R. Drew is on her way out

According to the NY Times and other reports, Ina Drew has offered to resign several times since April and has now had her resignation accepted. It sounds like Dimon dithered, since she and the CIO are ultimately his creatures, but the pressure was too great, probably from the board. Whoever they get to replace her is not going to be bringing in the revenue she did, so the 10% haircut the stock took Friday sounds warranted and permanent.

We still don't know the details of the position itself that caused this trouble. The NY Times implied that in April Ms. Drew ordered the CIO traders to hedge the risk in the European credit portfolio, and then when the hedge didn't work well, they got whacked when they tried to leg out of the hedge. Alternatively, I have read that the bank had the hedge on, and then got fancy by trying to earn premium as well through selling CDOs. This makes some sense, since there has to be some optionality in the position to cause losses to spike so dramatically and quickly. But if Ms. Drew offered to resign in early April, this suggests that something bad happened even before the losses began to mount, such as unauthorized trades being put on, or something being hidden from NY management, as well as the oversight people and auditors.

As to Mr. Dimon's role in all this, I describe the bank as a one-man show because in watching his career, and from some familiarity with his management style, he makes major decisions on the basis of his own reasoning or gut instinct. He will perhaps consult with his closest cronies in the bank, such as Charlie Scharf and others who have followed him from place to place, but he will not run such decisions by the Operating Committee. This is probably not that bad a thing normally, since delicate decisions and announcements such as closing down a business are not done by committee anyway. Still, there is something of a cult of Jamie Dimon at the bank, not of the magnitude of the Jack Welch cult at GE, but pretty strong nonetheless. It is the sort of thing where the CEO can start believing his own press, which has been hagiographic in recent years. Dimon has enough of an ego to start with that he doesn't need a lot of hero worship around him or he will get into trouble.

An example in this case of the problem here with the CEO is the dismissal of the press reports in April as a complete tempest in a teapot. Not only was that Jamie Dimon speaking, it was Jamie Dimon's conclusion of the situation without really looking into the facts (unless the facts were deliberately withheld from NY). Barring that exception, it was a one-man show decision. Nor does he admit he did anything wrong here. He says "we acted defensively" when those reports came out. Sorry - he acted arrogantly, which is a very different thing, and which happens when you have a CEO who is super-confident in his personal decision making. Again, the one-man-show phenomenon. Notice too that while he beats himself up somewhat in these press briefings, there is a still a lot of "we made mistakes" and "we will learn from this". I doubt if you are going to get any deep introspection on his part about how he is running the bank.

For play-by-play, see Jon Corzine/MF Global script and Murdoch

This is the obvious script. Corzine used it for MF Global, Murdoch used it for police bribes and phone hacking on an industrial scale and to head off the FCPA charges that DOJ brought, oops, won't bring, and it's the standard script that apparently lulls complete idiots and sycophants in the press and govt. and Wall Street to sleep.

This can be used by any parasite/"elite"/1%er that needs FDIC funds and/or special taxpayer bailouts to backstop their hundred billion dollar bets on heads or tails.

Any time it goes horribly wrong and they picked heads when it turned up tails and they might see a 1% drop in their $50 million dollar salay, repeat after me:

"Mistakes were made, I forget, I blame my subordinates that I ultimately am responsible for, but I don't have any idea how they could have screwed up so badly. I am sorry, it's not my fault, I'm not responsible, unless it's good news and I can cash my check and it's bonus time, in which case I take full credit. And if you punish me, I am so ingrained in the system now, you'll only hurt yourself even more."

Rinse and repeat until the US collapses in a heap of crap caused by unbridled greed that the powers CHOOSE TO IGNORE while blaming all fault on the helpless little people who see this coming on a daily basis and have no power to stop because the wealthy psychopaths keep us locked out. Truman, "the buck stops here"? Nah, that requires a modicum of class and integrity. These people are just rich narcissists and got that way by being true psychopaths.


Update: The Struggle to Make a "Decent" Return

Why so much fuss over a $2 billion loss? In the context of the $360 billion portfolio that Ina Drew was given to hedge, losing $2 billion is slightly more than 0.5% of the total portfolio. That's about what JP Morgan Chase pays consumers on its long term CDs. One should expect that the annual swings in a portfolio that size should be $5 billion give or take, up or down, each year.

Even if you look at it as the $200 billion subset of the portfolio, which is what the London office of CIO was given under its head Achilles Macris, $2 billion is still a 1% loss. In his best year, Macris made $5 billion, which is a 2.5% gain, nothing remarkable. Surely, therefore, a 2.5% loss out of London wouldn't be a surprise.

So the question is, why is the bank making such a fuss over a loss that should be reasonably expected to occur from time to time? Among the possibilities:

1) The bank has asymmetric targets for the unit. It is happy to accept $2 - $5 billion in annual profits, but less than $1 billion in annual loss. This leads to distortions in hedging strategies - for example, incurring premium to buy insurance, but selling options and earning premium as an offset to the expense. This seems to be how Bruno Iksil created a hedge with asymmetric results.

2) It wasn't the amount of the loss that was unexpected, but the manner in which the position was booked or managed. There are some reports that Dimon was unhappy with the vague answers he was getting out of London when the losses began to mount. There is an investigation to see if positions or results were hidden from management.

The problem here seems to be emblematic of a bank-wide situation. JP Morgan Chase made a return on equity last year of slightly more than 10%. The return part, or net income, was $17.5 billion. The CIO was an important part of this net income picture, and it was why Jamie Dimon reorganized the unit in 2005 to become a profit center rather than just a hedging center. This was to compensate for the fact that earnings were going to be chronically, if not permanently lower, in many other parts of the bank. The mortgage business was kaput; retail banking was under pressure because the easy money in checking overdrafts was being outlawed; investment banking was weak because IPOs and mergers were down; net interest income was disappearing in an era of zero interest rates and Operation Twist, forcing two year rates down to record levels. That left trading, which is the most unpredictable business in banking. It should be no surprise, therefore, to find that CIO made about 1/4 of the bank's net income, even though it had by far the fewest amount of people of any division.

Add to this the fact that the regulators were asking for more capital, and the Volcker Rule was going to kill off trading, and the bank was looking at a serious decline in its ROE. Yet Jamie Dimon was and is fully expecting to go back to the glory days of 2006 when a 15% minimum ROE was expected for the institution. In fact, that was the internal hurdle rate for its businesses at the time; any performance less than this was considered a failure.

What to do? Dimon's solution was to push for revenue wherever he could, rather than give up on his earnings targets. He still expects his bank to earn 15% as its right and obligation; the annual report says high returns are normal for banks given the leverage involved in banking.

The opposite situation is never considered. In other words, maybe banks should have lower leverage and therefore lower returns. What is wrong with that? It was the situation from 1945 to 1982, before the Reagan era of deregulation. Banks back then had 12% equity to assets, and 6%-8% returns. In fact, a serious argument is being made by some observers that big banks should have 20% capital to assets, given the systemic risks of TBTF. That would allow for 4% returns on capital - no room left for big bonuses in that environment. With $440 billion in capital against $2.2 trillion in assets, JP Morgan Chase would not have to sweat so much over a $2 billion loss from trading/hedging.

What we are watching here is Jamie Dimon twist and squirm in response to broad economic, political, and social pressure that is pushing banking back into its 1945-1982 environment. The economy, in other words, cannot grow with highly leveraged, or poorly capitalized (it's the same thing) banks sucking up precious economic resources to cover the risks that result from bad bets made to generate outsized returns. It is the same struggle hedge funds are beginning to go through, which will ultimately decimate and transform that business.

Of course, another answer is for Jamie Dimon to shrink his assets but keep his capital levels. Sell off some divisions, reduce the investment portfolio dramatically, close down proprietary trading, and so on. He could even get his bank to a size where it would no longer be TBTF. But you won't see him doing that. TBTF is too important to these big banks, and they are not going to give it up voluntarily, not after working so hard to maneuver themselves into this position.

The big banks will just have to keep taking the big, dangerous bets and hope they continue to pay off big time.

These people know exactly what they're doing-they don't care

To expect 15% returns is ridiculous in a "free market," even in the best of times when everyone could hide their heads in the sand pre-1929 (or earlier, pre-tulip bubble), but to do so post-Long-Term Capital Management, post-Lehman Bros./AIG/Bear Sterns, well, that's willful blindness (and yes, I use the term deliberately because it has criminal implications). But to fail to earn those returns when receiving free money from the Fed and with the power of a banking cartel - well, that just proves how inept they are (sorry "best and brightest"). In doing what they do on a daily basis, they are endangering us all.

It's like saying, "Sorry officer, how was I supposed to know transporting this drum of liquid from the Army Testing Lab would endanger millions, I was simply told I would be paid $1 million to drive from the Lab and dump the cannister into the reservoir that supplies the nearest big city while security was absent, but never to ask what was in the cannister and to never tell anyone what I did and to wear protective gear when I dumped it or else I would die within an hour." Is that driver entitled to a bailout by taxpayers if he happens to ruin millions of lives? Will CNBS sing his praises? Will he be interviewed on NBS and meet with the President? Can he get a seat on the NY Fed's Board?

Well, we need to hold these people earning tens or hundreds of millions of dollars to the same standard, after all, don't they tell us repeatedly on TV how smart they all are? When they create trillions of dollars in derivatives that have the power to destroy entire nations' economies and crush taxpayers through FDIC and other bailouts, then they must be personally responsible under the law. After all, Buffett himself called them WMDs before he doubled-down on GSachs and JPM. If they are not, there is something very, very wrong here (I know, it's already very wrong).

And yet, and yet we see Dimon replace the CIO with Matt Zames of LONG-TERM CAPITAL MANAGEMENT! The very same LTCM that used certain tax avoidance transactions and purposely avoided certain regulatory burdens (sound familiar?). It failed (sound familiar?). And required a bailout by the NY Fed (on which Dimon now sits on the Board). Players involved in the negotiations and/or bailout included a cast we all know from more recent times: GSachs, AIG, Buffett, Morgan Stanley, Bear Sterns, Lehman, etc.

So, these people all know what they are doing and it seems they all engage in musical chairs. They all pretend to be big boys and girls. They all collect paychecks that only people who cure cancer should ever have a right claim (and yet it seems the truly great people in our societies turn such rewards down because it's unseemly and they do what they do for their fellow man). They ignore the past, they know the risks, and they know they are endangering entire nations and people's welfare. THEY DON'T CARE. At what point do we say ENOUGH? They know what they are doing and have proven time, and time, and time again they just don't care about anyone but themselves. They and their friends in the media and govt. play us for fools. We are not. Indeed, many among us are much, much smarter than they are. It's just that what we actually care about the US and other societies and we find what these people and businesses repeatedly do to be utterly despicable. When will they be held to account for their reckless, and in all likelihood, criminal actions?

So while Dimon and the rest of the banksters can pressure Bernanke to print more money in QE3, and QE4 . . . more ZIRP until 2099, and the banks can pressure the Fed to create more money that they put into their own bank accounts, "borrow" at 0% and use it to line their own wallets or bet trillions on coin flips or instruments even they don't understand, or manipulate gold or silver or aluminum prices (why do investment banks need warehouses for aluminum besides price manipulation? should hoi polloi even dare ask such questions?), we still have to deal with the real inflation that the USG ignores, the real unemployment that the USG ignores, and the real corruption and massive wealth transfer that the USG allows. We are being raped repeatedly by these bad actors and have to deal with it?

Is this democracy? Is this capitalism? Is this the best we can get in the USA? NO.