JPMorgan's Dimon loses clout as reform critic

[Forever Sunshine]

Wall Street may have lost its most potent spokesman against Washington reforms.
JPMorgan Chase & Co Chief Executive Jamie Dimon has parlayed his bank's reputation as a white knight during the financial crisis into a position as the champion of a beleaguered industry fighting against excessive post-crisis regulation.

But the revelation of a shocking trading loss of at least $2 billion from a failed hedging strategy diminishes Dimon's credibility, and is already unleashing calls to get tougher on big banks.

"The argument that financial institutions do not need the new rules to help them avoid the irresponsible actions that led to the crisis of 2008 is at least $2 billion harder to make today," said Democratic U.S. Representative Barney Frank, who co-authored the 2010 Dodd-Frank financial reform law.

news.yahoo.com/jpmorgans-dimon-loses-clout-reform-critic-181944308--sector.html

[Royston Vasey]

JPMorgan Chase & Co Chief Executive Jamie Dimon has parlayed his bank's reputation as a white knight during the financial crisis...

Ha ha, the above statement would be chucklesome if many people didn't believe it to be fact.

Asset strippers:
J.P. Morgan filled their boots (and their books) at the expense of many struggling companies in the aftermath of the 2008 financial crisis. They are no more a "white knight" than is Chauchesku's memory revered by the Romanian people. Pigs with their snouts in a trough comes to mind; on second thoughts, perhaps my comparison is a little harsh on our farmyard friends. And (IMO) J.P. aren't the worst of what is a bad bunch, either - that rather dubious honour goes to Goldman Sachs.


Go well.

[dom]

that rather dubious honour goes to Goldman Sachs.

Ahh, but you cannot criticize them, Royston, for they are " Gods bankers" and must be assumed to be doing Gods good work,eh??

Aren't they ?

[Royston Vasey]

Hi Dom,

Ahh,but you cannot criticize them, Royston, for they are " Gods bankers" and must be assumed to be doing Gods good work,eh??

I think God would deny knowing Goldman Sachs three times before the cock crowed, I wouldn't blame Him either.


Go well.

[a]

www.bloomberg.com/news/2012-07-13/jpmorgan-s-botched-trades-may-generate-7-5-billion-loss.html

JPMorgan’s Botched Trades May Generate $7.5 Billion Loss

money.msn.com/investing/jamie-dimon-welfare-recipient-bloomberg.aspx

JPMorgan receives a government subsidy worth about $14 billion a year

[a]

www.forbes.com/sites/robertlenzner/2012/07/14/the-games-played-by-jp-morgan-chase/

The Games Played By JP Morgan Chase

This is the Wall Street version of Games People Play, circa 2012. It is played most expertly by the nation’s leading accountancy firms and their counterparts, the chief financial officers of major public companies.

The only way for JP Morgan Chase to report $5 billion in profits for the second quarter was to use accounting maneuvers that gave the bank such rosy profits as to propel its stock higher.

Most incredibly to me the bank arbitrarily reduced its loan loss reserves by the quite formidable figure of $2.1 billion. If it had not taken these “paper profits”– according to CEO Jamie Dimon — the profits for the quarter would have been reduced to $2.9 billion from $5 billion.

Then, there’s the eyebrow raising decision to reduce the bank’s quarterly litigation expenses to a measly $300 million — when a year ago the bank chose to reduce profits by a rather mean sounding $1.9 billion. With all the litigation, regulatory hearings and the like facing JP Morgan Chase, this maneuver to allow the reduction in litigation expense appears a tad clumsy and questionable. Had the litigation expenses been the same level as last year — $1.9 billion — then the earnings for the second quarter would have been a pretty skinny $1 billion.

And, by the way, some $500 million of its trading loss from the CIO muckup was slipped back into the first quarter report, diminishing it by $500 million — while not taking that hit in the 2nd quarter.

My biggest worry is the porous weak risk controls at the $370 billion CIO portfolio. I have to say it is surprising and worrisome due to the loosey-goosey sloppiness of it all.

Another fellow worry-wart in the finance trade has suggested what this means for the JP Morgan Chase derivatives book, which encompasses many tens of trillions of nominal trades. Is Jamie sure all of these positions have been marked accurately? Is he not taking some sickening risk that subpar risk control officers cannot divine? I’d want to comb over all those transactions to make sure there are no bad surprises coming in the volatile period I expect.

Still and all, I’m puzzled why the astute and ordinarily quite frank and honest Jamie Dimon testified before Congress that the size of the loss in the CIO office had been substantially reduced. I reported that hard news revelation — which just does not appear to be accurate — since the total loss is expected to be $5.8 billion — not $2 billion– and could rise to over $7 billion. This inconsistency is puzzling.