Seeking Alpha

Dimon's mistake: He trusted the government

  • Mike Mayo takes us back to a great source of modern security analysis, paraphrasing Otter consoling Flounder in Animal House ... "You [messed] up, you trusted us."
  • Jamie Dimon believed the government would never come after JPMorgan for mortgage losses related to Bear Stearns and WAMU. "Get it in writing," says Mayo. "We're in an era of Big Brother banking," he adds, noting regulators were MIA prior the financial crisis and have now moved to a stance of over-zealousness. "We should have gone to law school instead of business school."
  • JPMorgan and these loud numbers (reported $13B fine) make for great copy, but the Bank of Dimon (JPM +0.2%) is slightly higher this morning in wake of the news, and just 4% off its 52-week high.
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Comments (18)
  • SoldHigh
    , contributor
    Comments (1013) | Send Message
    Anyone naive to trust the current administration, which is chock full of unethical power-mongers, is a fool.
    21 Oct 2013, 10:30 AM Reply Like
  • buffett222
    , contributor
    Comments (945) | Send Message
    you forgot "socialist"
    21 Oct 2013, 10:47 AM Reply Like
  • Fracjob
    , contributor
    Comments (1243) | Send Message
    Interesting to note that the housing crisis began with a program from the Democrats known as the "Affordable Housing Act." Mandated bad paper supported by mandatory bad documentation flooded the system, with the blessing of the Democrats. Truly a shame that these politicians do not understand the unintended consequences of their less than sophisticated meddling. It was guaranteed to end badly. The Democrats have a new program with Affordable in the description, and it is already turning into a similar debacle. The Leftists are propaganda machines, and it should leave the rest of us to ask: Who are these programs affordable for?
    21 Oct 2013, 01:43 PM Reply Like
  • SoldHigh
    , contributor
    Comments (1013) | Send Message
    Why state the obvious?
    21 Oct 2013, 01:51 PM Reply Like
  • sarichter
    , contributor
    Comments (388) | Send Message
    Extremists from either left or right are propaganda machines. Get it right... anything in the middle is better than either end of the spectrum.
    21 Oct 2013, 02:21 PM Reply Like
  • apberusdisvet
    , contributor
    Comments (2899) | Send Message
    It is simply hilarious to see the various financial news pundits wringing their hands over the "shocking" attempts to rein in one of the most egregiously criminal organizations on the planet. To be sure, there will never be any criminal prosecutions, since the regulators and the Congress would have too much to lose in revolving door sinecures and campaign contributions. The Creature From Jekyl Island should be required reading for all high school students.
    21 Oct 2013, 10:45 AM Reply Like
  • tomlos
    , contributor
    Comments (1147) | Send Message
    Join the club JPM, there's a couple hundred million of us.
    21 Oct 2013, 11:06 AM Reply Like
  • SoCalNative
    , contributor
    Comments (496) | Send Message
    And what of this $13B "fine" (and probably many more through 2016).


    Wonder where it will go? Towards infrastructure? (cough cough), Small business lending? (ah hem), Printing more SNAP cards? (most likely). I seriously have no idea where these "fines" end up. Does anyone have an answer? At least a plausible one?


    Long JPM!
    21 Oct 2013, 11:13 AM Reply Like
  • chopchop0
    , contributor
    Comments (3547) | Send Message
    I'm amazed at how quiet things have been about BAC. They swallowed way more toxic companies/assets than JPM, yet not a peep about them lately.
    21 Oct 2013, 11:34 AM Reply Like
  • candor
    , contributor
    Comments (73) | Send Message
    Anyone who believes the Government will look out for them only has to look at the American Indian as an example of how well they will do that.
    21 Oct 2013, 11:45 AM Reply Like
  • sarichter
    , contributor
    Comments (388) | Send Message
    Anyone who thinks they are not part of the 'government' are completely ignorant. If you want to complain about a specific individual that is employed by our country, do so... but please bring some substantial facts and not hearsay.


    Government is you, me, and everyone else that resides in this country. We all have a say and a hand in how this country runs. The business someone runs, the food someone buys, the thief who steals, etc. Complaining about it and not doing anything about it is stupid. If you don't like it here, go find another country.


    No matter how you cut it, there will always be corruption. It's part of human nature to be greedy (it's a general statement not a universal one).
    21 Oct 2013, 11:55 AM Reply Like
  • haroldberk
    , contributor
    Comment (1) | Send Message
    Reports indicate that JPM was investigating an acquisition of Bear Stearns long before the fall of Bear, so they had time for more due diligence than they have admitted. And when you buy junk on the cheap and bargain for everything in the barrel you get whatever there is and have to take responsibility for it.


    But remember that part of the settlement relates to JPM failures on mortgage modifications and workouts after the Bear acquisition.
    21 Oct 2013, 11:57 AM Reply Like
  • josephd7
    , contributor
    Comments (2) | Send Message
    ". . . egregiously criminal organizations . . . ." Of course, you're talking about the Democratic Party.
    21 Oct 2013, 11:57 AM Reply Like
  • sswitzky
    , contributor
    Comments (51) | Send Message
    I don't want to defend the government's heavy handed, petty cronyism, but JPM is not an innocent bystander in anything they touch. They pushed Bear Stearns and Lehman Brothers over the cliff during each firms funding crisis to their own benefit, they've manipulated rates and currencies, hardly a week goes by that they aren't caught doing something unethical. Internally, that place is a den of thieves and Dimon is either fine with it or incapable of reining it in. It is a prime example of the need for sensible regulation to create financial firms that CAN fail without bringing down the entire system.
    21 Oct 2013, 12:02 PM Reply Like
  • slash32is4
    , contributor
    Comments (137) | Send Message
    please explain how that is possible (sensible regulation to create financial firms that CAN fail without bringing down the entire system.) while every bank is in trouble because of confidence... sounds like a fantasy.. we will have another banking crisis and the banks will get emergency loans again even though the people that want your votes say they won't... If they really cared about the country they would cut back entitlements and go through pain now for gain later but they want votes and sacrificing now for a better future doesnt get votes... hell most people dont even live their own lives that way....
    21 Oct 2013, 12:48 PM Reply Like
  • sarichter
    , contributor
    Comments (388) | Send Message
    Another post about entitlements?


    1. The ACA is an attempt to reduce the hefty healthcare cost in entitlements.
    2. Lets start reducing National Defense as well. However, people start saying things like this and all hell breaks loose. We do NOT need an army of this magnitude.
    21 Oct 2013, 12:58 PM Reply Like
  • Don Eremin
    , contributor
    Comments (6) | Send Message
    JPM's behavior under Dimon clearly fits that of a Criminal Enterprise.


    After the crash Dimon was pictured as an executive who was on top of the entire worldwide bank under his control.


    Now he is constantly surprised by each scandal.
    21 Oct 2013, 01:05 PM Reply Like
  • josephmilo
    , contributor
    Comments (5) | Send Message
    The liabilities of a company do not disappear, nor should they, with a change in ownership. There are real victims here who would be wronged even further should the government not pursue justice. When you buy an entity, you inherit all of its assets and liabilities. If the government promised to ignore any past wrongdoings, that would be wrong to the people affected and harmful to our justice system. That would be nothing short of corruption, and JPM should never have expected that sort of treatment, whether they were promised it or not. Instead of blaming the government for doing its duty, maybe reconsider being a shareholder of the company. As a shareholder, you are and should be responsible for any acquisitions you make.
    21 Oct 2013, 02:26 PM Reply Like
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