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In his annual letter to shareholders, Jamie Dimon says 2011 was a "year of challenges." Ongoing...

In his annual letter to shareholders, Jamie Dimon says 2011 was a "year of challenges." Ongoing global economic uncertainty and various traumatic events have impeded financial recovery. In the face of these setbacks, frustration with — and hostility toward — the financial industry continues. "We acknowledge it and respect people’s right to express themselves," Dimon says. However, "we all have an interest in getting the economy and job creation growing again."
Comments (21)
  • 7footMoose
    , contributor
    Comments (2266) | Send Message
     
    A shareholder letter even Warren Buffet appreciates. JD takes a common sense approach not widely appreciated by doomsayers.
    4 Apr 2012, 08:14 PM Reply Like
  • Lakeaffect
    , contributor
    Comments (998) | Send Message
     
    Then maybe him and his cronies should back away from the trough.

     

    When is it enough? One would think by now they'd be satiated.

     

    Where's Jon Corzine?
    4 Apr 2012, 08:15 PM Reply Like
  • deercreekvols
    , contributor
    Comments (5248) | Send Message
     
    Where is Jon Corzine?

     

    More and more SA readers need to be asking this question, in my opinion. Keep up the search Lakeaffect.
    4 Apr 2012, 10:58 PM Reply Like
  • ByloSelhi
    , contributor
    Comments (177) | Send Message
     
    Ha Ha Ha. Jamie helps blow up the reservoir and then wonders why people are mad there is no water. Additionally, he goes on to say that we all have an interest in restoring the water supply. Some people have no shame.
    4 Apr 2012, 08:22 PM Reply Like
  • X-terminator
    , contributor
    Comments (89) | Send Message
     
    Why not with his salary!
    4 Apr 2012, 09:38 PM Reply Like
  • icandoitdon
    , contributor
    Comments (611) | Send Message
     
    common sense approach my ass. another pig at the trough as far as i'm concerned. without free money from the fed every one of these CEOs would be looking to downsize the extravagant life styles gifted to them. dimon is just another self-serving cheerleader for the system that was as opposed to the system that should be....namely, smaller banks, higher capital requirements and more tightly regulated.
    4 Apr 2012, 10:25 PM Reply Like
  • wyostocks
    , contributor
    Comments (7714) | Send Message
     
    Another billionaire banker reaping the rewards of the government trough. What bull. What would he write if not for Ben.
    4 Apr 2012, 10:30 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2501) | Send Message
     
    Apparently "trough" is word of the day for the anit-bankers on SA. JP Morgan navigated the financial crisis very well, absorbing two failed institutions, and likely could have survived without TARP money. Its easy to bash the rest of the execs on Wall Street, but Jamie Dimon has run a relatively tight ship. He doesn't set the fed funds rate, or dictate what the fed does, so you can't criticize him for the current rates or QE programs. He only does what a good manager should do: spot opportunities and profit off them. Banks exist to make money first and foremost, just like every other corporation.
    4 Apr 2012, 10:37 PM Reply Like
  • 7footMoose
    , contributor
    Comments (2266) | Send Message
     
    MM, Well said. Don't despair if you are castigated by the masses the facts hardly ever get in the way of a good ill thought rant on this site.
    5 Apr 2012, 04:59 AM Reply Like
  • never going back
    , contributor
    Comments (312) | Send Message
     
    BS!!!

     

    JP MOrgan has had insider Fed info since before the Depression. They are the largest derivatives dealer/creator on the planet. Without the Fed there would be NO JPM!!! I couldn't agree more. Smaller banks and tighter regs. Take the investment teams to separate companies and leave the bankers to lend. The derivatives nightmare I am afraid is unwindable. Its like 10,000 spools of tattered fishing line all knotted together. JPM resides in the center of this mess and has their computers battle with Goldmans' on a 24-7 basis which has driven the entire global system to the brink once and close a few other times all while keeping the cost of everything higher for the middle/lower class. I wish all derivatives were kept to simple futures/options on open exchanges. When you read about what Goldenstein Sux did to Greece or the state of Mississippi it is criminal far beyond MFS Global. Where are the jail cells for these types???
    4 Apr 2012, 10:57 PM Reply Like
  • 7footMoose
    , contributor
    Comments (2266) | Send Message
     
    MM, As I said the facts are shifted and restated to suit the rant of the day. NGB being an example of the ill thought rant herd.
    5 Apr 2012, 05:01 AM Reply Like
  • moneyTalksBSWalks
    , contributor
    Comments (193) | Send Message
     
    Constitutional right to lobby? Really? You mean right to buy influence right. Hey Dimon, I think everybody pretty much knows how the game is played so might be wiser to stay quiet rather than come across as a furking hypocrite.
    4 Apr 2012, 11:02 PM Reply Like
  • Joe Morgan
    , contributor
    Comments (1500) | Send Message
     
    While I don't support Dimon's actions, I have noted that SA is getting infected with the doomers, anti-social and lunatics from zerohedge. Doesn't bodes well for the site.
    5 Apr 2012, 12:42 AM Reply Like
  • 7footMoose
    , contributor
    Comments (2266) | Send Message
     
    JM, I too have noticed the anger and ignorance levels increasing even as the economy improves. It is as though they want to expel all of their pent up animosity before its too late to have much to complain about.
    5 Apr 2012, 05:04 AM Reply Like
  • ByloSelhi
    , contributor
    Comments (177) | Send Message
     
    Banks are supposed to work for the benefit of society. Bring back Glass-Steagell. Break up the too big to fail.

     

    It's not just "pent up animosity" when our institutions are working against the common good. End 401k and pension skimming too....
    5 Apr 2012, 02:46 PM Reply Like
  • 7footMoose
    , contributor
    Comments (2266) | Send Message
     
    Banks are businesses built to profit their owners and only in socialist and communist societies do they "work for the benefit of society" and even then that is questionable.
    5 Apr 2012, 03:47 PM Reply Like
  • icandoitdon
    , contributor
    Comments (611) | Send Message
     
    so JPM 'would have survived' without the fed, huh?

     

    the entire system was (and is) a house of cards, and it is likely that none in the house would have been left standing absent the actions taken by the federal reserve. that includes boatloads of taxpayer-subsidized loans, federal guarantees, zero interest rates, worthless paper shifted onto the feds books, etc. i won't even get into the suspension of mark to market accounting rules that would clarify for the public the insolvency of all these institutions. god knows we can't have that.

     

    the subsidies continue to this day and anyone who has a savings account makes an ongoing contribution. in the history of our country, tell me another industry that has enjoyed that kind of federal support. yet every step of the way, JPM has fought tooth and nail against tighter regulation of the system that would have otherwise collapsed. i don't find that heroic on dimon's part...i find it ignorant and self-serving.

     

    we have these crises about every 20 years or so....or maybe the defenders of the status quo are too young to remember the savings and loan bailout of the 1980s or the bail out of LTCM in the late 90s. or maybe they're just socialists disguised as capitalists.

     

    large banks should be broken up. they should have much higher capital buffers. they should not be permitted to trade derivitives. but this would make dimon's paycheck a lot smaller, wouldn't it? i guess we can't have that either....
    5 Apr 2012, 08:11 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2501) | Send Message
     
    In a fractional reserve banking system, like we have, there is never enough cash to cover all the deposits. Its how banking has worked for hundreds of years. In times of crisis, if there is a bank run, it causes less economic damage for government to step in, whether its the FDIC to a bank or thrift, or the Fed and Treasury to an investment bank, than to let the institution go into a disorderly failure like we saw in the Great Depression. Small banks fail almost every week, and are seized by the FDIC and sold to larger banks. Its the most effective way of dealing with troubled institutions. JPM took over Bear Sterns and WaMu at the request of the Fed, the Treasury, and the FDIC. Large, healthy banks are able to take over weaker rivals in times of stress, and protect the taxpayers from having to put additional capital at risk. Imagine the extra costs the taxpayer would have had to shoulder if the Fed and Treasury had to unwind Bear, and if the FDIC had to unwind WaMu. Imagine if the taxpaper was on the hook for CountryWide, instead of the Bank of America shareholders?

     

    Low interest rates discourage savings and increase investment in other areas to spur the economy. Pushing money out of savings accounts into higher risking assets and activities is the point. Its not just the banks benefiting from the low rates, its companies like McDonalds and IBM issuing corporate paper at record low interest rates. Its all the "junk" rated companies that are selling debt at interest rates of 6%, rather than 12%. Its the people getting mortgages at record low rates.

     

    S&L saw 20% of the thrifts fail at the time, so clearly smaller institutions do not prevent crises. LTCM was a hedge fund, not a bank, and its bailout was largely funded by the big banks.

     

    The government has made a profit on TARP for the largest banks, so its not like taxpayers made a bad investment. Why arent more people up in arms about the GM and Chrysler bailouts, which will likely never be repaid in full? Or Fannie and Freddie, that have gotten $150 billion to date and still require additional bailouts every quarter? You want an industry that has gotten more Federal support than the banks? Look at housing. That $150 billion in losses on Fannie and Freddie is because of all the inflating the Government did of the housing bubble. When the second wave of foreclosures hits this summer and Frannie and Freddie need another $75 billion, will the Congress fix those awful institutions then?
    5 Apr 2012, 10:46 PM Reply Like
  • icandoitdon
    , contributor
    Comments (611) | Send Message
     
    where to start....

     

    first of all, i wouldn't be promulgating the misleading propaganda put out by the fed about "TARP made a profit." our national debt has absolutely exploded as a result of this meltdown in the financial services industry. the FED has hundreds of billions of toxic assets on its books of still-dubious value...but TARP MADE MONEY, FOLKS! jesus..how irrelevant is that?

     

    i would also add that distorting the cost of money by implementing a zero interest rate policy doesn't just help ibm's and macdonalds of the world. the biggest beneficiary is the federal goverment. but when the yield curve normalizes, which it eventually will....heh heh...payback will be a bitch. i would also add that i've been a saver all my life...and the governmet is fucking me royally along with any other saver or person on a fixed income, while it rewards debtors and overleveraged corporations (like banks).

     

    and about the "stimulus" effect of low rates..i guess you must think that's worked out pretty well. if so, you're one of the few.

     

    regarding your other points....

     

    citing the housing "industry" as comparable to the banking industry in terms of taxpayer support entirely misses the point. there were no homebuilders bailed out by the feds that i'm aware of. neither did home depot or any other retailer that serves the housing industry ask for or receive taxpayer support. there have been some efforts to reduce the principal value or mortgages by the obama administration but that's very small potatoes and is mostly for show. the biggest housing taxpayer subsidy is the tax-favored treatment of mortgages and deductibility of property taxes...but that's a different issue altogether.

     

    the real financial support has been directed at the horribly mismanged financial services industry that supports the housing industry. commercial banks/investment banks/fannie/freddie/c... to mention AIG, moodys and S&P... were different breeds of pigs eating at the same trough. banks and mortgages companies weren't forced to make no-doc loans...they threw due diligence out the window knowingly while they all rode the housing wave. i would add that the banks who held a lot of the toxic paper that originated with their brethern was moved onto the books of the federal reserve in an effort to save not housing....but the banks themselves. AIG was supported because of the domino effect their failure would have had on these banks. if you want to argue that GSE's have no place in private industry or that congress shares blame with the financial services industry, i'm with you there. but shared blame doesn't make the financial services industry a victim.

     

    as far as GM and chrysler are concerned, they deserved to fail and should have....just like any other institution that can't stand on its own. why is the financial services industry different than a retailer? or a manufacturer? why don't the feds save Kodak, which is certainly just as "american" as general motors or citigroup? the answer is because when the entire financial system nearly goes under it's a reflection on the federal reserve itself. they saved the banks en masse...with a few sacrificial lambs like WA MU, wachovioa and lehman brothers....to save themselves.

     

    i repeat...the sytem is corrupt. banks are too large and should be broken up. their trading arms should be spun off and separately capitalized. next time this happens will likely be the last...because today's too big to fail is likely to become tomorrow's too big to save.
    6 Apr 2012, 07:18 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2501) | Send Message
     
    The deficit is exploding because of Medicare and Mediicaid being unsustainable, coupled with the fact Washington thinks it has the right to waste 2 dollars for every dollar we give it. While the crisis did not help our debt situation, it is not the cause of the yearly deficit. Two wars and a few tax cuts later, and here we are, with the Clinton Surplus gone. Either way that happened long before the crisis.

     

    If you dont think that low rates stimulate the economy then you dont believe in monetary policy, and I understand why you are so mad at the system.

     

    And fannie and freddie back one in every two mortgages, if not more. Without them, everyone whose bought a house since their creation would have had to pay a higher mortgage rate, and a sizeable amount would not have been able to get a loans. This all comes down to the banks, with the OK from the Federal Government via Fannie and Freddie, giving out TRILLIONS of dollars in mortgages to people who would never be able to pay them back. Thats a lot a support from the government. The government interference in the housing market is as much to blame for the crisis as the banks are, since the government set up the system in which countrywide could issue all those mortgages, that Lehman could lever at 40 to 1, and that AIG could sell insurance on billions in bonds without making any reserves for those contracts.

     

    My point is everyone was wrong, from Barney Frank to Angelo Mazilli to the home buyer who couldnt afford the home. But banks like JPM, that came through the crisis larger and stronger, did a whole lot more right than they did wrong.
    6 Apr 2012, 08:29 PM Reply Like
  • icandoitdon
    , contributor
    Comments (611) | Send Message
     
    we agree on as many things as we differ on.

     

    as far as major banks that came through the crisis "stronger" is concerned, just how many can claim that? many of these institutions have damaged franchises with less earning power. just look at their 15 year stock charts.

     

    perhaps JPM and WFC can make that claim but i think it's too early to tell. also consider this: in addition to those that did fail...Wa Mu, Countrywide, Bear Stearns, Lehman....there were several that certainly would have failed without fed intervention....BAC and C...or might have failed, i.e. GS and MS. that doesn't seem like a very good average to me.

     

    you're right about my views on monetarism as practiced by the fed. there is no more important mission of the fed than safeguarding the financial system and they've failed miserably at it. think of it....the system nearly collapsed and the fed denies any responsibiity for it, characterizing it as a "once in a lifetime" event; as if the fed's years of perpetually loose monetary policy and disregard of its regulatory mandate was of no consequence. bernake defends that senile old fool greenspan every chance he gets because he (bernake) was greenspan's chief architect of free money. as far as i'm concerned they let the system get out of control until it reached the point of collapse. and we're to thank bernake for saving it? not me.

     

    i understand what bernake has done and why he did it. but it is also clear to me that he has consequently held our economy captive to a zero interest rate policy as far as the eye can see, with some combination of perpetually high unemployment, low economic growth and/or stagflation. he's screwed the middle class upon which this country's economy...if not democracy itself...depends. that, to me, will be his lasting legacy.

     

    over and out. i enjoyed the debate.
    7 Apr 2012, 02:33 AM Reply Like
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