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"We do believe this to be an isolated event," says Jamie Dimon (JPM) is his prepared testimony...

"We do believe this to be an isolated event," says Jamie Dimon (JPM) is his prepared testimony for tomorrow's Senate hearing. "We will lose some of our shareholders' money ... no client, customer, or taxpayer money was impacted by this accident." He expects "solid profitability" for the bank in Q2. "Our fortress balance sheet remains intact."
Comments (34)
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    This will be funny. Will Congress be upset that JPM lost shareholder money and thereby pass a law that companies cannot lose money? If so can we do away with capital reserves?

     

    It could be a good discussion about controls if anyone in Congress knows anything about corporate governance. And also hedging versus speculation would be a good discussion.

     

    Funny thing Jamie is a Dem if I recall correctly so who is going to be the antagonist and act offended?
    12 Jun 2012, 05:33 PM Reply Like
  • Losing Paper While Gaining ...
    , contributor
    Comments (497) | Send Message
     
    Yeah, but what discussion is it going to be? JPM underlings screw up, loses money but still profitable. Underlings get thrown under the bus with "discussions" with regulators will be had. I'm wondering what regulations is he trying to get imposed?
    12 Jun 2012, 07:01 PM Reply Like
  • frosty
    , contributor
    Comments (690) | Send Message
     
    people forget that Bear Stearns, Lehman and AIG began by losing only 'shareholder' money. the problem is, when the losses are big enough, there is a run on the bank caused by their counterparties which creates a bigger mess.
    13 Jun 2012, 07:57 AM Reply Like
  • wrwhiteal
    , contributor
    Comments (70) | Send Message
     
    This will be funny. Will Congress be upset that JPM lost shareholder money and thereby pass a law that companies cannot lose money? If so can we do away with capital reserves?
    ------
    In related news, Congress passes a law making pi = 3.000 and repealing the law of gravity...

     

    Banks are in the business of risk... Every loan, every investment is a risk....
    And I doubt our greedy, parasitic, corrupt, wasteful Fed Govt $16 trillion in debt should be telling anyone how to be responsible
    13 Jun 2012, 08:54 AM Reply Like
  • kmi
    , contributor
    Comments (3992) | Send Message
     
    http://bit.ly/MEoDso

     

    JPM campaign contributions.

     

    Most of it went to Romney, in case you don't care to click the link.
    13 Jun 2012, 10:46 AM Reply Like
  • jackooo
    , contributor
    Comments (1503) | Send Message
     
    Just watched part of the hearing. lol lol
    Dog and pony show....
    They are asking Dimon his advise!!! I thought this was the guy that just lost billions.
    13 Jun 2012, 11:48 AM Reply Like
  • jackooo
    , contributor
    Comments (1503) | Send Message
     
    When asked about the regulators,Dimon just said, in so many words, that the regulators are useless.
    Again I present my own simple regulation:::::::

     

    The problems of the banks could not of happened without the agencies dedicated to oversight ignoring their jobs. Even today the Todd-Frank or ANY laws we have on the books will not suffice. There can still be another blackmail for bailouts.
    One or two sentences can stop this in the future but no one is willing to put those sentences into law.
    1. All personal assets will be forfeited if any abuse of funds is deemed to be inconsistent with the objectives of the institution goals. They will include, but not be limited to, cars, boats, houses, pensions, savings accounts, airplanes, etc.

     

    2. All misappropriations of funds will carry a felony criminal indictment with jail time. There will no longer be a FINE without admitting guilt.

     

    Pretty simple, huh???
    13 Jun 2012, 12:03 PM Reply Like
  • wrwhiteal
    , contributor
    Comments (70) | Send Message
     
    Regulators work for the govt because they are lazy/stupid.... Otherwise, they would be doing something productive, worthwhile, profitable.... Competing in the 'real world'.... Not feeding at the public trough
    14 Jun 2012, 08:43 AM Reply Like
  • wrwhiteal
    , contributor
    Comments (70) | Send Message
     
    JPM traders didn't misappropriate or steal....
    They just made some hedges which lost money...more than expected...
    With this miserable democrat recession there is almost no home building or business expansion.... No loans.... Banks must try to investe/hedge to realize any deposited return..
    14 Jun 2012, 08:53 AM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    jackooo

     

    Let's be accurate about Dimon's statement on regulators. He did say there are so many competing agencies they don't know who is responsible for what. He did say they make JPM better as they question things that need questioning and at times review their models in depth. And he also said they could not catch what happened in this recent loss because it was a management error. I don't know if I agree with the last statement but he was taking ownership of the problem. And he said we need smarter regulation not more regulation.

     

    Indirectly I think he was saying get rid of all the agencies and just have one and focus on being smart not just layering on regulations infinitely.

     

    Your solution is likely "cruel and unusual punishment" and what "abuse of funds" or "misappropriations of funds" means is anyone's guess which means you have to write laws to define it and when it is appicable and you will find yourself buried in more legal statutes. And nobody will admit guilt to anything which means the government will not bring any charges because they cannot afford the trials. They don't have the money, the skills or the manpower. We need a balanced approach.
    14 Jun 2012, 10:48 AM Reply Like
  • Losing Paper While Gaining ...
    , contributor
    Comments (497) | Send Message
     
    "He did say they make JPM better as they question things that need questioning and at times review their models in depth."

     

    I thought that was the company's job, not the job of people assigned at taxpayer expense. Banks (not just JPM) are not only "outsourcing" the losses to the taxpayers (previous bailouts), but also the risk assessment?

     

    "Indirectly I think he was saying get rid of all the agencies and just have one and focus on being smart not just layering on regulations infinitely."

     

    That would make it easier, sure, It's also much easier to do regulatory capture when there's only one regulatory body. This is something he'd probably quite like.
    14 Jun 2012, 03:44 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    If the government does not want any audit function then great pull them all out.

     

    Regulatory capture is only possible when the regulators are not as smart as who they are regulating. Wait that means they are already captured. Multiple agencies is not a strategy that is turf wars and government waste.
    14 Jun 2012, 05:01 PM Reply Like
  • Losing Paper While Gaining ...
    , contributor
    Comments (497) | Send Message
     
    It's not solely about smart. It's also about corruption. I'm sure there are plenty of smart regulators, and I'm sure there are honest ones, but it seems more and more like a lot of them, including the smart ones, are just plain corrupt. This gives potentially fewer regulators more power. And you know what's said about power...
    14 Jun 2012, 06:32 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    Indirectly you are saying who is auditing the auditors? Keep in mind public banks are audited by big accounting firms and 100's if not thousands of people listen to their conference calls and review their numbers.

     

    I would not say a lot of the auditors are smart because why would they work for the government if they were that smart? They are looking at very complex FI's and if they understood them well they could likely work for them and many follow that path. What is left is likely the dregs.

     

    We have even more oversight bodies before the 2008 crash and obviously that did not help. Number of regulators is not the answer.
    14 Jun 2012, 06:55 PM Reply Like
  • Losing Paper While Gaining ...
    , contributor
    Comments (497) | Send Message
     
    I'm not for increasing the regulators by any means. I'd be happy if there were less regulators and more accountability in the market, in that they'd be allowed to go bust and there'd be no bailouts.

     

    What I'm trying, and maybe failing to do well, is to say is that less regulators with more power results in a greater concentration of power and easier corruption.
    14 Jun 2012, 07:01 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    The issue you have is that the regulators are like the two outfielders who are yelling "I got it" and then neither of them catches the ball and they both look at each other. Accountability is hard to assess when responsibility is not assigned. Nobody gets fired for not regulating the banks under the statutes as they are now defined. In fact nobody knows the name of any regulators because they do their thing and go home and if it blows up it is not their problem.

     

    This patchwork and lack of accountability is dysfunctional and that is a bigger problem than any corruption. They don't have to be corrupted they are too incompetent to bother with.
    15 Jun 2012, 12:21 PM Reply Like
  • youngman442002
    , contributor
    Comments (5131) | Send Message
     
    He has already lost his credibility......tomorrow will be a bunch of lies...he canĀ“t tell the truth or he would lose another 2 billion...
    12 Jun 2012, 05:36 PM Reply Like
  • Stoploss
    , contributor
    Comments (1727) | Send Message
     
    I think he said that the CIO didn't understand the trade. If that's the case, then why did it take a massive loss to draw attention to it?
    That tells you he doesn't have a clue to what's going on in his company. More lies until the next wave hits is the order of the day.
    12 Jun 2012, 06:58 PM Reply Like
  • Rummeljordan
    , contributor
    Comments (477) | Send Message
     
    I thought the government only got mad when the banks made a lot of money?
    12 Jun 2012, 07:14 PM Reply Like
  • wrwhiteal
    , contributor
    Comments (70) | Send Message
     
    The cynical, corrupt, pandering socialist demagogue attack 'the rich', banks, all private enterprise no matter whether they profit or lose.....
    14 Jun 2012, 08:39 AM Reply Like
  • Venerability
    , contributor
    Comments (3048) | Send Message
     
    How much of that "fortress balance sheet" has been built on the backs of several generations of PM investors?

     

    How much of it rests on the foundation of The Largest Silver Short Position in Human History and the Web of Derivatives - upon Derivatives - upon Derivatives . . . ad infinitum that it originated?

     

    LTCM were arrogant and elitist, but they were never in the position of being Alpha Bank in the US economy. Since Goldman lost their flag position after the 2008 Crash, JPM has taken on the Alpha Bank mantle, but continued to neglect the PM-originated Spiderweb of Derivatives not very well hidden in its (London?) attic.
    12 Jun 2012, 07:46 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    Ven

     

    Jamie Dimon has not even been around for several generations of investors so hard to know what you are talking about unless you are just engaging in hyperbole to get attention.

     

    Jamie has been talking about building and maintaining a fortress balance sheet since he took over Bank One in 2000 and in that process sent certain commercial customers packing because they overexposed the balance sheet and company capital to risk with very little return.

     

    Goldman was never an alpha bank in that they were not even a bank until 2008 and they never had close to the scale of JPM. Apples and oranges.

     

    As long as you get more readers/followers I guess that is all that matters.
    12 Jun 2012, 08:21 PM Reply Like
  • frosty
    , contributor
    Comments (690) | Send Message
     
    Greenberg also bragged about AIG's fortress balance sheet.
    13 Jun 2012, 08:00 AM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    Your point?
    13 Jun 2012, 11:45 AM Reply Like
  • mextex
    , contributor
    Comments (15) | Send Message
     
    Gee, as long as this accident is only shareowner money, why not have the accident occur to the management salaries and bonuses?
    12 Jun 2012, 10:44 PM Reply Like
  • six-oh
    , contributor
    Comments (564) | Send Message
     
    This is pure politics. Congress will grandstand and Dimon will be contrite to a point. Then the Kardashians will be on and everyone will go back to business as usual.

     

    Looks like the JPM loss will run to 8 billion or so. Not exactly a drop in the bucket, but small potatoes for JPM in the long run. Dimon is a solid leader and has the track record to prove it. If this is the only misstep he makes, then he is still the guy you want in charge.

     

    I am a bit bothered by his dismissive attitude with respect to shareholder losses, but his point is that the losses will be more or less victimless. Even though we are all shareholders, and don't see it that way, he is playing to the American public that is largely ill-informed and susceptible to empty political rhetoric about evil Wall Street financial firms. He just needs to get through the public portion of this mess, and then he can quietly get back to business.
    13 Jun 2012, 01:54 AM Reply Like
  • Stoploss
    , contributor
    Comments (1727) | Send Message
     
    You may have left out a couple of zero's.

     

    It is well known that the derivatives this trade is stacked up against is
    70 Trillion..
    13 Jun 2012, 09:46 AM Reply Like
  • frosty
    , contributor
    Comments (690) | Send Message
     
    Seems to me its JPM's 'diversity' that caused the loss. Diversity works well when all 'diverses' are making money, but when one 'diverse' gets out of control (a la AIG's credit default swap operation) then bad things can overwhelm the other 'diverses'.
    13 Jun 2012, 08:06 AM Reply Like
  • wrwhiteal
    , contributor
    Comments (70) | Send Message
     
    By definition, hedges involve losses.. E.g. When you diversify, make Bets both for and against something to reduce the worst case, you will have some losses, and some gains..

     

    The attack publicity has magnified the JPM losses, as it forces them to liquefy the hedges at bigger losses,than otherwise..
    13 Jun 2012, 09:03 AM Reply Like
  • Caa1378
    , contributor
    Comment (1) | Send Message
     
    Imagine Congress, incapable of passing a budget, wrecking our country with debt, refusing to consider tax legislation, sitting in judgement of anyone who runs a highly profitable business that employees over 200,000 people!
    13 Jun 2012, 08:30 AM Reply Like
  • jackooo
    , contributor
    Comments (1503) | Send Message
     
    You wanted HOPE and CHANGE. You got it.
    Just Hope things Change in Nov.
    13 Jun 2012, 12:00 PM Reply Like
  • User 17948
    , contributor
    Comment (1) | Send Message
     
    A simpy solution to "Banking Regulations". 1. Get rid of Dodd-Frank
    2. Reinstate Glass-Steagall for all financial institutions, Savings Banks, Commercial Banks, Insurance Companies, Investment Banks.
    3. Exempt Primary Dealers from Glass-Steagall ( because big banks will successfully lobby against G-S) 4. Require all Primary Dealers to raise Capital Base to 15% of all assets and let the market be what it will be.
    14 Jun 2012, 08:38 AM Reply Like
  • Losing Paper While Gaining ...
    , contributor
    Comments (497) | Send Message
     
    Want a simpler solution? Let them fail.

     

    It may hurt for a while, but eventually they'll realise they need to bring reserve requirements back to a sane value, and we can get away from the pyramid scheme we currently call a banking system.
    14 Jun 2012, 03:48 PM Reply Like
  • wrwhiteal
    , contributor
    Comments (70) | Send Message
     
    You must appreciate the spectacle
    The same Democrats who created the housing bubble and sub-prime mortgage crash with 'affordable housing' and Freddie/Fannie...
    The same Dems who have DOUBLED our national debt in only 6 years.... Who skyrocketed our parasitic, greedy, corrupt Fed Govt spending/waste/pork...

     

    Democrats calling others irresponsible/greedy is a joke
    15 Jun 2012, 09:31 AM Reply Like
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