The Bishop and the Butterfly: Murder, Politics, and the End of the Jazz Age

    DIMON APOLOGIZES FOR JUVENILE DELINQUENTS

    By Oxy Mora on Fri, 01/28/2011 - 9:44am |

    Jamie Dimon is on a public relations kick to sweep the financial crisis under the rug so that JPM and the other mega banks can continue their strangle hold on American capital.

    At Davos, Dimon whined that people should stop bashing bankers.

    Dimon is already on record with a series of remarks justifying the further expansion of the mega banks. According to him, and seconded by Geithner, mega banks benefit from economies of scale and should be large and larger. Also, Dimon excused most of the juvenile delinquents by stating incorrectly that only the un-diversified banks failed. 

    But at Davos Jamie Dimon doubled down on his self serving claims about un-failing banks. As reported, he said: There is a huge misconception. Not all banks needed (rescue funding). Not all banks would have failed" French President Nicolas Sarkozy in a later session took Dimon to task. It was not reported where Geithner was at the time, perhaps checking out prices of condo's.

    It may be the case that JPM was the one bank which was not in de facto insolvency in the 2008 crisis but that possibility does not give Dimon portfolio to excuse the other 12 juvenile delinquents who were. And Bernanke has contradicted Dimon's claims about which banks were on the brink of failure. Bernanke said in testimony to the FCIC (as reported yesterday) "If you look at the firms that came under pressure in that period only only one was not at serious risk of failure". And far from minimizing the crisis as Dimon is trying to do, Bernanke believes that the 2008 meltdown was even worse than the Great Depression.

    One of the infamous 13 banks was not in default--maybe JPM, perhaps Goldman. But that one bank does not rewrite history. Whether Dimon was one of juvenile delinquents or whether he was not he has not been annointed by anyone to apologize for the gang. Nor should his disingenuous comments about the nature of the 2008 meltdown be allowed to justify the further expansion of the mega banks.

    Dimon's comments would not pass the smell test in a high school current events discussion , let alone the Harvard Business School from where he launched his career.   

    Comments

    The mythology, unfortunately, plays right into Dimon's agenda.  So far as the public is concerned, JPMorgan Chase was never in serious trouble.  Indeed, it was the only strong bank and that's why the Fed turned to Dimon for help in "rescuing" Bear Stearns.  Though Bear's clearing business was a legitimate asset that Dimon no doubt wanted, what he really bought (with taxpayer money) was the heir of being the "responsible banker."  At the start of the crisis it was Dimon and Blankfein who were the leaders.  Their banks, we were told, were not failing.  They didn't need help. Them good. Pandit bad.  Then Goldman took that backdoor AIG bailout.  Chase got lots of help from the public.  JPMorgan wasn't strong, it was merely stronger than its peers.  That was enough to feed the Dimon mythology though.


    by Michael Maiello on Fri, 01/28/2011 - 2:11pm

    Here's how myths get made.  From The Guardian, a paper that should know better:

    "JP Morgan, which employs more than 200,000 people globally including about 17,000 in Britain, was among the more profitable financial players throughout the credit crunch. When smaller rival Bear Stearns failed in March 2008, JP Morgan bought the business to rescue it from bankruptcy – an act, Dimon said, that was at the behest of Washington: "JP Morgan bought Bear Stearns because the US government asked us to.""

    Ugh!  Dimon has convinced a reporter that it "rescued" Bear Stearns and did it as a public service.  It really bought a floundering rival in a fire sale and demanded guaranties from the U.S. taxpayer to boot.  In exchange, JPMorgan Chase got hold of an incredibly lucrative and well known prime brokerage and clearing business.  That part of Bear was coveted by all its rivals on Wall Street.  Dimon didn't do anybody any favors.  He boughts something he probably wanted anyway and we promised him he wouldn't lose money on it.


    by Michael Maiello on Fri, 01/28/2011 - 5:36pm

    Thanks Destor. Hopefully in some small way we can help keep the truth alive.

    Dimon made addititional statements to Bloomberg yesterday, reiterating how well the banks are doing. 7% capital seems just fine with him. Geithner has done a good job. Daley is a good guy, has the respect of the business community.

    It appears that no one in the Obama Administration will ever utter another word in support of the decentralization of banks. And the fact that the mega banks fomented a crisis which then exploded the deficit will be excluded from the deficit reduction mania. Let the banks get larger and perpetuate another asset bubble. But for God'a sake, get the deficit under control by gutting the social safety net.   


    by Oxy Mora on Sat, 01/29/2011 - 8:09am