Jason Stanford, 6/25/2012 [Archive]

Jamie Dimon and the JP Morgan Casino

Jamie Dimon and the J.P. Morgan Casino

By Jason Stanford

J.P. Morgan Chase & Co. didn't lose $2 billion because of hubris, regulation, or market forces. It lost $2 billion because Ted Kennedy died.

J.P. Morgan's CEO, Jamie Dimon, explained it differently to the Senate Banking Committee the other day: "To achieve [reduced risk] in the synthetic credit portfolio, the CIO could have simply reduced its existing positions.Instead, starting in mid-January, it embarked on a complex strategy that entailed any positions that it did believe offset the existing ones.This strategy, however, ended up creating a portfolio that was larger and ultimately resulted in even more complex and hard to manage risks."

Translation: "We have rules against doing what we did because it's too risky, but I thought we could make a lot of money. Oops."

It's the Senate Banking Committee's job to hold people who gamble with our money accountable. But when Dimon showed up, the Republican members acted like Trekkies who'd been granted a private audience with Leonard Nimoy.

Ranking Republican Richard Shelby hails from Jefferson County, Alabama, which was recently forced into the largest municipal bankruptcy in U.S. history by J.P. Morgan. You'd think that Shelby would have sharp questions for Dimon. But Shelby also took $25,000 from Dimon and J.P. Morgan's PACs, so instead we got this non sequitur: "You were managing risk.What were you managing on this?"

It's very hard to dodge a question if you can't understand it, but Dimon rose to the challenge with this bit of blue-sky balderdash: "What it was meant to do was to earn, in benign environments make a little money, but if there was a crisis, like Lehman, like Eurozone, it would actually reduce this dramatically by making money."

Translation: "We thought that if everything went well we would make a boatload of money."

You'd think the Senators would get angry, but instead they asked Dimon for advice on how to implement the Volcker Rule, a section of the Dodd-Frank Wall Street reform bill that goes into effect next month.

Here's Idaho Republican Mike Crapo, whom Dimon and J.P. Morgan PACs have given $17,982: "What should the function of the regulators be?"

Bob Coker, a Tennessee Republican who's taken $15,500 from J.P. Morgan, stopped slobbering long enough to put the lazy in laissez faire with this bon mot: "A banker's always going to be ahead of a regulator, basically.And you're giving them the information they're using to regulate.So it's just not really realistic to think that a regulator's going to catch this."

South Carolina's Jim DeMint ($4,000 from J.P. Morgan) said his goal was to get an idea from Dimon about how he'd like to be regulated, which was like asking BP how they would like us to clean up the Gulf Coast.

Oregon's Jeff Merkely was the only Senator who put on his big-boy pants that day. His tenacious questioning of Dimon forced the banker to use simple words to tell a complex lie. "We are not in the hedge fund business," claimed Dimon.

"Well," answered Merkley, "I wanted to turn to the Bloomberg Report of a few days ago and it reports that Jamie Dimon created the CIO, elevated Drew from treasurer to chief investment officer, had her report directly to him.Encouraged her department, which had invested mostly previously in government backed securities to seek profit by speculating on higher yielding assets such as credit derivatives, according to half a dozen former executives of the company."

Translation: "You lying melon farmer!" Merkley, though, is from Oregon, so he had to play nice.

Taxpayers gave J.P. Morgan Chase bank $25 billion in the bailout, yet they recently lost $2 billion because they are still able to gamble with federally insured deposits. Our drunken teenager of a banking system totaled the first car we bought Dimon, and somehow the second one ended up wrapped around a tree, too. Shocker.

The Volcker Rule goes into effect July 21. It was supposed to ban commercial banks from using federally insured deposits to make risky bets on Wall Street but was gutted to win the vote of Scott Brown, the Republican who replaced Kennedy in the Senate. And if you think that's why J.P. Morgan's PAC gave Sen. Brown $10,000 for his re-election this year, then you're just cynical.


©Copyright 2012 Jason Stanford, distributed exclusively by Cagle Cartoons newspaper syndicate.

Jason Stanford is a Democratic consultant who has helped elect or re-elect more than two dozen Members of Congress. He lives in Austin, Texas. You can reach him at stanford@oppresearch.com or follow him on Twitter @jasstanford.

This column has been edited by the author. Representations of fact and opinions are solely those of the author.

Download Jason Stanford's color photo - Download Jason Stanford's black and white mug shot photo
Why not run a cartoon with the column? We recommend the cartoons below as a good compliment to Jason Stanford's topic.
Click on the thumbnail images to preview and download the cartoons.

Related Cartoons

Senators Swoon Over JP Morgan Chief Jamie Dimon
By: R.J. Matson

June 15, 2012

Senators Swoon Over JP Morgan Chief Jamie Dimon-COLOR
By: R.J. Matson

June 15, 2012

Chase Bank
By: David Fitzsimmons

May 17, 2012

Chase Bank
By: David Fitzsimmons

May 17, 2012

Shocked Shocked at JPMorgan
By: John Darkow

May 18, 2012

Las Wall Street - JP Morgan
By: Christopher Weyant

May 16, 2012

 Con  Milking the Wall St Bull COLOR
By: Christopher Weyant

May 22, 2012

Las Wall Street - JP Morgan COLOR
By: Christopher Weyant

May 16, 2012

 Con  Milking the Wall St Bull
By: Christopher Weyant

May 22, 2012

JP Morgan Chase
By: Milt Priggee

May 22, 2012

We do not accept and will not review unsolicited submissions from cartoonists.
Sales & Information: (805) 969-2829 sales@cagle.com
Billing Information: (805) 969-2829billing@cagle.com
Technical Support: support@cagle.com

FREE cartoons for your website if you're already a paying print subscriber!
Artwork and columns are copyrighted by each creator. All Rights Reserved. Unauthorized reproduction prohibited. Privacy Policy | Terms of Service