The Senate Committee on Banking held a hearing, A Breakdown in Risk Management: What Went Wrong at JPMorgan Chase? They had one witness, JPMorgan Chase CEO Jamie Dimon.
This one man apology show is about the $2 billion or greater trading loss JPMorgan Chase incurred due to speculative derivatives.
Truth be told the hearing was softball, not a grilling. This should be no surprise since JPMorgan Chase gives a lot of campaign contributions including those on the Senate Banking Committee.
Dimon revealed very little about the trade and not much more about his knowledge of it. He refused to discuss details of it, lest he reveal secrets to competitors -- who already know all about the trade and have been hammering JPMorgan on it, adding to the bank's losses. But the committee didn't challenge him on that, even after he turned down an offer to close the hearing to the public.
Bloomberg's story quote implies the Senators plain don't understand derivatives:
“The fact that the senators seemed slightly mystified by what had happened is really very significant and very telling,” Chernow said of yesterday’s hearing. “How can the government exercise oversight when the instruments that federally regulated banks are using and trading in have become so complex, high- risk, and highly leveraged?”
Senator Jack Feed (D-RI) managed to ask how JPMorgan Chasewas buying credit default swaps around 2008, yet selling them in 2011. He asks how JPMorgan Chase could be on both sides of a transaction.
Senator Jeff Merkley (D-OR), is about the only Senator who got any licks in.
Of course the massive loss was blown off as an isolated incident and how banning some of these CDSes, regulations and the Volcker rule are magically still not needed:
Dimon was not so chastened that he backed off of his long-standing criticism of Washington reforms.
The 2010 Dodd-Frank financial oversight law, he said, has produced a swarm of uncoordinated regulators, and he warned policymakers that they must smartly craft the Volcker rule that will ban banks from making speculative bets with their own money.
Dimon said Washington must not overreact to JPMorgan's trading loss and create such narrow exemptions that it hurts financial markets.
Naked Capitalism really blasts such claims and points out the JPMorgan Chase's CIO office was all about risky trades. They have coined a new term, Dimonspeak:
In Senate testimony, Dimon revealed his idea of “portfolio hedging” to be even more egregious than the harshest critics thought. Dimon presented the job of the CIO to be to make modest amounts of money in good times and to make a lot of money when there’s a crisis. (That does not appear to be narrowly true, since in the last couple of years, during which there was no crisis, the CIO’s staff were among the best paid in the bank and produced significant profits for the bank. That is a bald faced admission that the CIO’s mandate had nothing to do with hedging. A hedge is a position taken to mitigate losses on an underlying exposure should they occur. Instead, Dimon has admitted that the mission of the CIO is to place bets on tail risks that are unrelated to JP Morgan’s exposures. A massive, systemically destructive strategy like the Magnetar trade would fit perfectly within the CIO’s mandate.
Needless to say, this definition is an inversion of not just what the Volcker rule was meant to stand for (limiting financial firm gambles with taxpayer money), it’s NewSpeak, or in this case, DimonSpeak: “a hedge is whatever I say it is, no more and no less.” Another bit of DimonSpeak was his specious response when he was arguing against the Volcker rule. The JP Morgan chief asserted that a customer loan could be construed to be a prop trade. Um, no, Volcker applies to trading books. The fact that he’d run a line like that shows how little he thinks of the intelligence of the Senate Banking Committee and the public generally.
PBS also did a round up of some of the better analysis of Mr. Dimon's testimony. Finally, ZeroHedge really summed it up and we should mention it's an election year.
The crony capitalist show must go on: those bribed by Jamie Dimon are about to ask question of the same person. That this theatrical hearing will be a farce is by now well known by absolutely everyone, as confirmed by the rumor that late last night someone ordered 22 copies of "Credit Default Swaps for Bought and Paid For Senatorial Muppet Idiots" from Amazon.com.
Why scold the paymaster? That would only harm the whores
Why would any "public servant" (aka self-enriching criminal posing as such) scold the industries and people that enable them to get fat and richer at the expense of the true public and 99% struggling to get by? Indeed, why even make such paymasters uncomfortable for one second?
Doesn't Jamie "F Everyone But Me and Mine" Dimon and every CEO, corporate boardroom, and HR puppet enforcing their will as "gatekeepers against the ethically inclined" buy such protection when they "donate" funds from corporate treasuries (and isn't that what shareholders/pensions/m.funds allow nowadays, Dimon etc. to use funds to protect them personally)? Why have quid pro quo if you cannot use corporate $ to buy protection for those at the top. Sure, such payments might be deemed despicable in a moral society and by moral people (even two-year olds understand these concepts), but hey, they are the "best and brightest" because the rules of society simply don't apply to them anymore.
Circular reasoning par excellence by these morons: "I buy the law makers and buy protection, and don't get punished for obviously criminal and despicable acts; if what I was doing was immoral and illegal, wouldn't I be punished by now?"
A citizen with an IQ over 80 and an ethical four-year old: "That makes no sense. You are a criminal and wrong."
Moronic retort: "HOW DARE YOU! I'm a bankster and defy all rules! Senator, come scold these naysayers!"
one really should be asking about these "shows"
This isn't the first time the Senate has held a "hearing" for a 1 man show. That's the question how one guy gets his own hearing. Bill Gates got one just lying through his teeth, demanding more foreign guest workers and all of the Senators were kissing the hem of his gown.
How much money does it cost to give the uber-rich their one person show? The actual hearing, clearly the Senators were not getting to the bottom of credit default swaps and how unstable they really are, or any other derivative, they already didn't pass derivatives reform that is so necessary.
So, why these shows and this one was clearly supposed to be some admonishment, but to me, it looks like a nice PR stunt for JPMorgan Chase.
The surest sign prosecution won't happen is a Congress. hearing
More and more we're seeing these "hearings"/PR stunts as a nice ploy and kabuki theater whereby both the Congressional paymaster/puppetmaster/CEO can appear before his puppets. The whole show is finely choreographed before word-one is uttered. That's what lobbyists and staffers and PR people are paid for. Then, the theater begins. The doofuses, sorry, politicians, may say they are "shocked" more than once, ask questions that last 10 minutes to show how "tough" they are so some gullible constituent that thinks these 1%er politicians give a crap about them at home, Dimon, or Corzine, or Murdoch (still waiting on him, I guess owning the press + people's secrets buys LOTS OF PROTECTION from the law) feigns ignorance or a really bad memory for "the best and brightest" control freaks who laud themselves for how they know and remember everything (unless it gets them in trouble). And then . . . nothing. Not a word from DOJ, no AG or local DA has any interest in enforcing the law or conducting a quick and thorough investigation. All for a few pieces of silver. Murdoch's hacking happened years ago and yet still no criminal prosecutions in the US for a US corporation that bribes police in a foreign country? And hacked tens of thousands of messages and accounts? Really? THE RULE OF LAW IN AMERICA IS DEAD!
Bill Gates, yeah, he's a prize. Steals other people's IP, makes billions off it, and then sets up a charity to make himself feel better while simultaneously selling out American workers and making personal appeals for tens of 1,000s more H-1B visas to undercut Americans and destroy the middle class. All the while hiding out in his private retreat bought and paid for on the backs of others.
Surest sign of a traitor - someone that destroys the American middle class, donates to politicians and their families (if they aren't politicians themselves like Clintons), and then sets up a charity in their name (narcissism, after all, is everything to these scoundrels)to make themselves feel better and to impress fellow criminals at Davos meetings and at Hamptons BBQ away from the hoi polloi they helped impoverish.
Nokia 10,000 layoffs
I couldn't help but notice Nokia just announced another 10k layoff. Seems anybody who gets in bed with Microsoft these days is doomed. Right, also not that the rest of the world isn't in trouble with severe poverty, starvation and so on...
but I find it amazing considering Americans do not have health care, are in poverty, need desperate help, these same people never seem able to touch helping out these Americans. Never a fund raiser in sight, i.e. part of that agenda is pure political agendas.
Cowardly CEOs should face every skilled employee they fire
In this age of blatant lies and corruption at the top of both business and govt., it's time CEOs and politicians actually face the consquences of their lies and despicable behavior. I'm not satisfied with them being harangued for only a few seconds by a brave protestor in a Congressional hearing before they are whisked away by privately security or protected by their bought-and-paid for NYPD units (oh yes, Dimon PAID FOR NYPD with corp. funds and apparently this is legal nowadays).
Every single CEO and HR punk that claims they cannot find "skilled Americans" while firing hundreds of thousands of those very same skilled Americans with 20+ years of experience and multiple degrees in STEM and other fields at the same time (HP, Microsoft, IBM, etc.) should be forced to stand outside the offices as the people are being escorted out like they are trash. They should visit every single community that is decimated and stand on the unemployment line among those desperate people. Then, repeatedly, they must repeat their lie face-to-face with the unemployed and their families, "I CANNOT FIND ANY QUALIFIED AMERICANS AND NEED MORE FOREIGNERS ON H-1B VISAS AND EVERYONE WITHOUT A JOB IS UNEMPLOYABLE NOW."
Now, I'm guessing this blatant lie won't go down so well when CEOs aren't surrounded by sycophants and asskissers in TV studios and Congressional secret chambers or on the front lawn of some Malibu compound.
You want to lie and get rich off the lies and corruption while destroying millions of lives and causing actual deaths through suicide, destroyed health, lack of medical coverage, depression, then be a real man (or woman, whatever case applies) and face the consequences. I'm guessing the Wizard of Oz is too damn scared to step out from behind the curtain.