JPMorgan’s Connections to the House Finance Committee. Jamie Dimon, CEO of JP Morgan Chase, testifies in front of the House Financial Services committee. Fang Zhe/Xinhua/Zuma This story first appeared on the ProPublica website. JPMorgan Chase CEO Jamie Dimon is on Capitol Hill again today, this time to talk to the House Financial Services committee about the bank's recent multibillion-dollar trading loss. According to his prepared testimony, Dimon plans to deliver basically the same remarks he gave the Senate banking committee last week, apologizing but giving few details.
His Senate hearing was hardly a grilling; senators mostly praised him for his "emphasis on continuous quality improvement," in the words of Senator Jim DeMint, R-S.C. As we charted last week, JPMorgan happens to have plenty of connections to the Senate committee. The House Connections JPMorgan has two in-house lobbyists with connections to the House Financial Services committee.
Rick Lazio joined JP Morgan in 2004 as chief of government relations. The SEC The CFTC The OCC The Fed. Tom Ferguson: Senate Banking Chair Calls Jamie Dimon to Testify -– But JP Morgan Chase is His Biggest Contributor! By Tom Ferguson, Professor of Political Science at the University of Massachusetts, Boston and a Senior Fellow at the Roosevelt Institute. Cross posted from Alternet Holding your breath about the fallout from J.
P. Morgan Chase’s derivatives losses? It’s good that the watchdog is barking, but we’d all better watch closely to see if it will bite. Alas, it gets worse. Don’t bank on the watchdog. Slobbering Senators Woo Dimon While They Gut Dodd-Frank. I often get asked a Wall Street variation of the Ronald Reagan 1980 campaign saw, “Are you better off than you were four years ago?” To wit: Are we safer than we were four years ago? Will the 2010 Dodd-Frank law and the regulations that the Securities and Exchange Commission and the Commodity Futures Trading Commission are busy writing and rewriting prevent a recurrence of the kind of financial meltdown that we experienced in 2007 and 2008?
Just as in November 1980, the answer is easy: a resounding no. Neither Dodd-Frank nor the Volcker Rule nor bank-capital requirements nor the other regulations that will ultimately get written -- with a lot of help from Wall Street’s lawyers and lobbyists -- will change the behavior of the hundreds of thousands of bankers, traders and executives who work on Wall Street and who do the things every hour of every day that slowly but surely have had a tendency to lead to the collective action that cause financial crises. Need some evidence? Corzine’s Folly. Senators Grovel, Embarrass Themselves at Dimon Hearing | Matt Taibbi. Dimon Plays Humpty Dumpty to Congress.
“When I use a word,’ Humpty Dumpty said in rather a scornful tone, ‘it means just what I choose it to mean — neither more nor less.” “The question is,” said Alice, “whether you can make words mean so many different things.” “The question is,” said Humpty Dumpty, “which is to be master— that’s all.” -Lewis Carroll, Alice in Wonderland The House Financial Services Committee hearings on the losses in JP Morgan’s Chief Investment Office were an improvement over the Senate version, in that there was comparatively little fawning over Jamie Dimon and more earnest, even if not very successful, efforts to pry information from him (one wonders whether the fact that Chuck Schumer has been hitting Wall Street up for superPac donations was a contributing factor).
But to anyone who knows bupkis about finance, the striking thing was how many times Dimon gave sloppy to downright dishonest answers. Let’s give a few examples of Dimon’s crude propaganda efforts. This point is essential. More on the Supposedly Out of Control JP Morgan Chief Investment Office and the “Fortress Balance Sheet” Whocouddanode? As more and more tidbits leak out about the activities of the JP Morgan Chief Investment Office, it increasingly appears to be a unit that was inadequately supervised. While that revelation is a dent to the reputation of self-styled ubermensch and alleged control freak Jamie Dimon, if he takes a few lumps in the press and otherwise can carry on as before, what difference will it make to him and the industry? Lloyd Blankfein took at least as much heat over a longer period, and he’s still firmly in place. The CEO “I’m in charge and I know nothing” defense is alive and well because it has proven to be so successful. But some of the latest stories reveal that the CIO was really out of control, in the sense that direct orders, both from on high and by the CIO to its traders, were ignored.
This is a breakdown of the normal chain of authority. It means insubordination was tolerated. Now note this is already a little weird. But why does that matter? Ahead Of Tomorrow's Dimon Hearing, Presenting JP Morgan's 93.5% Historical Winning Trade Perfection. We are just about 16 hours away from Jamie Dimon's sworn testimony before the Senate Banking Committee, which even has the theatrical name: "A Breakdown in Risk Management: What Went Wrong at JPMorgan Chase? " Will anyone learn anything? Of course not: Jamie Dimon has been well-schooled in not disclosing critical trading information, and will certainly use the "proprietary position" and "more shareholder losses" excuse for any directed question asking how big the JPM CIO loss has become.
Because while the hearing could have been productive, if indeed its purpose was to seek to prevent future massive losses of scale such as the suffered by the JPM prop trading unit and its hundreds of billions in CDS notional position, the last thing anyone will care about tomorrow is market efficiency and actual regulation. First and foremost: grandstanding and posturing, in the case of the politicians, and not disclosing anything, without saying too many "I don't recall"s in the case of Dimon. Serious Questions for Jamie Dimon in Occupy the SEC/Alternative Banking Senate Letter. As many readers may know, Jamie Dimon is on deck tomorrow before the Senate Banking Committee to explain how a so-called hedge produced losses that are almost certain to exceed the $2 billion the bank has ‘fessed up to.
But this is likely to be at most a ritual roughing up. First, the hearing is only two hours, and that includes the usual pontificating at the start of the session. By contrast, Goldman executives were raked over the coals for 10 hours over their dubious collateralized debt obligations. The comparatively easy treatment is no doubt related to the fact that JP Morgan is a major contributor to the five most senior committee members. Per American Banker: JPMorgan is Banking Committee Chairman Tim Johnson’s second-largest contributor over the last two-plus decades, according to the Center for Responsive Politics, which analyzes campaign giving from companies’ employees and their political action committees since 1989. The same is true for the committee’s top Republican, Sen. Chris Whalen: Will Jamie Dimon Tell the Truth, Because He Hasn't Done So Yet.
"Of all forms of tyranny the least attractive and the most vulgar is the tyranny of mere wealth, the tyranny of plutocracy. "John Pierpont Morgan Chris Whalen makes some interesting observations and cuts to the heart of the matter, although he sometimes falls into the morality of the income statement. The reactions of the CNBC spokesmodels and Andrew Ross Sorkin are worth watching. Still I give them credit for having these sorts of discussions at CNBC, as compared to Bloomberg TV which has become an extended, often arrogantly frivolous, infomercial bordering on propaganda for the one percent. At least the print version of Bloomberg maintains solid journalistic standards.
It is interesting that the argument keeps coming back to the defense that Wall Street firms 'write off big losses all the time.' The bank has come far from when its founder, J. Asked: "Is not commercial credit based primarily upon money or property? " Have we learned nothing? Jamie Dimon's Complete Senate Testimony. Presenting JPMorgan's CEO Jamie Dimon's prepared remarks for tomorrow's debacle: The truth, the whole truth, and nothing but the totally unvarnished version of the truth that will fulfill Jamie Dimon's obligations to sit through a few hours of snide remarks, condescension, and bating.
It does seem however that our initial perspective on this being a systemic risk hedge (i.e. a 'delta-hedged' senior tranche position as opposed to some easily managed and understood pairs trade) that rapidly grew out of control due to risk control inadequacies, is absolutely correct - though we suspect that is as close to the real truth anyone will ever get. The following is the testimony of JPMorgan Chase Chairman and CEO Jamie Dimon prepared for his appearance Wednesday before the Senate Banking Committee: Chairman Johnson, Ranking Member Shelby, and Members of the Committee, I am appearing today to discuss recent losses in a portfolio held by JPMorgan Chase's Chief Investment Office (CIO). What Happened? Dimon Redux: Why Bank Risk-Taking = Risk Making. In case you haven’t had enough of Congresscritters lobbing softballs at Jamie Dimon, the JP Morgan CEO is appearing before the House Financial Services Committee on Tuesday. There have been a number of suitably scathing accounts of how members of the Senate Banking Committee fawned over Dimon, with Matt Taibbi pointing out that Dimon was actually not terribly persuasive, stumbling and mumbling over the parts of his defense that were a stretch.
But most important, they had an opportunity to demand explanations, such as of what the trade actually is, who was involved in approving it, when did it start to go awry and when did management realize there was a problem, and muffed it. For the overwhelming majority of the legislators, that was no accident. Let’s go back to Dimon’s defense. It boils down to “we got on top of this pretty quickly, we’re a big bank and this isn’t much of a loss, shit happens and we’ve learned from this ‘mistake’.” That sounds pretty tame, right?