CEO Jamie Dimon of JPMorgan Chase (shown left) went public with a whale of tale today about how one of its investors, Bruno Michel Iksil, known as the “London Whale” lost $2 billion in bad bets on volatile synthetic credit securities. What is most striking about the story is that Dimon was the executive who led efforts to limit reforms by the Federal Reserve after the last financial scandal. Now he says “There were many errors, sloppiness and bad judgment . . . grievous mistakes, they were self-inflicted.” Sound familiar?
Iksil is also known as “Voldemort” because of the massive power he wielded. Dimon has worked hard to prevent reforms limiting or monitoring such risk-taking enterprises. This includes opposition to the Volcker rule and related reforms.
Now Dimon is expected to blame the whale rather than his own anti-reform position. It is not the first time that a mad leader personified his own failings:
“All that most maddens and torments; all that stirs up the lees of things; all truth with malice in it; all that cracks the sinews and cakes the brain; all the subtle demonisms of life and thought; all evil, to crazy Ahab, were visibly personified, and made practically assailable in Moby Dick. He piled upon the whale’s white hump the sum of all the general rage and hate felt by his whole race from Adam down; and then, as if his chest had been a mortar, he burst his hot heart’s shell upon it.”
– Moby Dick, Herman Melville
Dimon can save time on writing his own testimony and simply take this from Melville:
Towards thee I roll, thou all-destroying but unconquering whale; to the last I grapple with thee; from hell’s heart I stab at thee; for hate’s sake I spit my last breath at thee. Sink all coffins and all hearses to one common pool! and since neither can be mine, let me then tow to pieces, while still chasing thee, though tied to thee, thou damned whale!
He might however want to check what happened to Ahab in his final encounter with the whale.
Source: Time
Never mind Holder’s recent NWU speech that did more to undermine the US Constitution than all the previous undermining over 200 years combined, you remember, where Obama decreed he’s got the right to be judge, jury and executioner of every living soul on the planet: “This is a vital part of the Obama legacy. The prior decade witnessed the most egregious crimes imaginable by the nation’s most powerful actors: torture and warrantless eavesdropping from political officials (with the aid of corporate giants), and massive fraud from financial elites. None has been held accountable; the opposite is true: the Obama administration has steadfastly protected all of them.” (G. Geenwald 2-10-12 – Salon)
The main reason Prof. Turley & I along with 80 million others who won’t vote for President in this election are the grotesque & Orwellian abridging of inviolate legal principles. Never have such fundamental legal principles, as Greenwald reiterates in the same Salon article above: “undergone such a relentless assault under this administration. That general development is odious in its own right. That the specific shielding of Wall Street is driven by such corrupt ends makes it even worse. But the worst part of it all is that Obama is going to spend the next six months deceitfully parading around as some sort of populist hero standing up for ordinary Americans and the safety net against big business, and hordes of people [like lots of the regular commenters on this blog] WHO KNOW HOW FALSE THAT IS will echo it as loudly and repeatedly as they can, tricking many people who don’t know better into believing it.” (G. Geenwald 2-10-12 – Salon)
Res ipsa loquitur
This guy was primed to declare regulation to be the bain of capitalizm. Give us our bailouts but the bail bucket is ours. Where is Willard Romney, the Bain Capital genuis, on this issue?
Dimon has complained that the financial regulations would cost JP Morgan over $400 Million. But he is not worried about losing a bet on 2 Billion! What a great CEO.
http://www.nytimes.com/2011/06/19/opinion/19everson.html
Mr. Everson did get himself in a bit of a spot after he left the I.R.S.
http://www.bloomberg.com/news/2012-05-11/what-jamie-dimon-doesn-t-know-is-plain-scary.html
From what I have read the worst is yet to come in these derivative trades….. Whale blubber burns for quite a while……. Unfortunately they will he taking down those firms unable to sustain the loses….. About 97 of them and counting…..Wasn’t this something Dominic Strauss was going to warn us about before they found his weakness? Sometimes the messenger gets shot sometimes they get eliminated…… If it’s still on line…. I wonder what he had to really say about the IMF?……
How Wall Street Killed Financial Reform
It’s bad enough that the banks strangled the Dodd-Frank law. Even worse is the way they did it – with a big assist from Congress and the White House.
By Matt Taibbi
May 10, 2012
http://www.rollingstone.com/politics/news/how-wall-street-killed-financial-reform-20120510
Excerpt:
Two years ago, when he signed the Dodd-Frank Wall Street Reform and Consumer Protection Act, President Barack Obama bragged that he’d dealt a crushing blow to the extravagant financial corruption that had caused the global economic crash in 2008. “These reforms represent the strongest consumer financial protections in history,” the president told an adoring crowd in downtown D.C. on July 21st, 2010. “In history.”
This was supposed to be the big one. At 2,300 pages, the new law ostensibly rewrote the rules for Wall Street. It was going to put an end to predatory lending in the mortgage markets, crack down on hidden fees and penalties in credit contracts, and create a powerful new Consumer Financial Protection Bureau to safeguard ordinary consumers. Big banks would be banned from gambling with taxpayer money, and a new set of rules would limit speculators from making the kind of crazy-ass bets that cause wild spikes in the price of food and energy. There would be no more AIGs, and the world would never again face a financial apocalypse when a bank like Lehman Brothers went bankrupt.
Most importantly, even if any of that fiendish crap ever did happen again, Dodd-Frank guaranteed we wouldn’t be expected to pay for it. “The American people will never again be asked to foot the bill for Wall Street’s mistakes,” Obama promised. “There will be no more taxpayer-funded bailouts. Period.”
Two years later, Dodd-Frank is groaning on its deathbed. The giant reform bill turned out to be like the fish reeled in by Hemingway’s Old Man – no sooner caught than set upon by sharks that strip it to nothing long before it ever reaches the shore. In a furious below-the-radar effort at gutting the law – roundly despised by Washington’s Wall Street paymasters – a troop of water-carrying Eric Cantor Republicans are speeding nine separate bills through the House, all designed to roll back the few genuinely toothy portions left in Dodd-Frank. With the Quislingian covert assistance of Democrats, both in Congress and in the White House, those bills could pass through the House and the Senate with little or no debate, with simple floor votes – by a process usually reserved for things like the renaming of post offices or a nonbinding resolution celebrating Amelia Earhart’s birthday.
The fate of Dodd-Frank over the past two years is an object lesson in the government’s inability to institute even the simplest and most obvious reforms, especially if those reforms happen to clash with powerful financial interests. From the moment it was signed into law, lobbyists and lawyers have fought regulators over every line in the rulemaking process. Congressmen and presidents may be able to get a law passed once in a while – but they can no longer make sure it stays passed. You win the modern financial-regulation game by filing the most motions, attending the most hearings, giving the most money to the most politicians and, above all, by keeping at it, day after day, year after fiscal year, until stealing is legal again. “It’s like a scorched-earth policy,” says Michael Greenberger, a former regulator who was heavily involved with the drafting of Dodd-Frank. “It requires constant combat. And it never, ever ends.”
That the banks have just about succeeded in strangling Dodd-Frank is probably not news to most Americans – it’s how they succeeded that’s the scary part. The banks followed a five-point strategy that offers a dependable blueprint for defeating any regulation – and for guaranteeing that when it comes to the economy, might will always equal right.
Jamie’s Cryin: Dimon, J.P. Morgan Chase Lose $2 Billion
by Matt Taibbi
May 11, 2012
http://www.rollingstone.com/politics/blogs/taibblog/jamies-cryin-dimon-j-p-morgan-chase-lose-2-billion-20120511
Excerpt:
If you’re wondering why you should care if some idiot trader (who apparently has been making $100 million a year at Chase, a company that has been the recipient of at least $390 billion in emergency Fed loans) loses $2 billion for Jamie Dimon, here’s why: because J.P. Morgan Chase is a federally-insured depository institution that has been and will continue to be the recipient of massive amounts of public assistance. If the bank fails, someone will reach into your pocket to pay for the cleanup. So when they gamble like drunken sailors, it’s everyone’s problem.
Activity like this is exactly what the Volcker rule, which effectively banned risky proprietary trading by federally insured institutions, was designed to prevent. It will be argued that this trade was a technically a hedge, and therefore exempt from the Volcker rule. Not only does that explanation sound fishy to me (as Salmon notes, for Iksil’s trade to be a hedge, this would mean Chase had an equally giant and insane short bet on against corporate debt, which seems unlikely), but it’s sort of immaterial anyway: whether or not this bet technically violated the Volcker rule, it definitely violated the spirit of the law. Hedge or no hedge, we don’t want big, federally-insured, too-big-to-fail banks making giant nuclear-powered derivatives bets.
Wall Street’s immunity
Why has the Obama administration so aggressively protected the financial industry from legal accountability?
By Glenn Greenwald
5/10/2012
http://www.salon.com/2012/05/10/wall_streets_immunity/singleton/
*****
Why Can’t Obama Bring Wall Street to Justice?
May 6, 2012
http://www.thedailybeast.com/newsweek/2012/05/06/why-can-t-obama-bring-wall-street-to-justice.html
Excerpt:
Despite his populist posturing, the president has failed to pin a single top finance exec on criminal charges since the economic collapse. Are the banks too big to jail—or is Washington’s revolving door at to blame? Peter J. Boyer and Peter Schweizer investigate:
•Obama’s 2009 White House summit with finance titans, in which the president warned that only he was standing “between you and the pitchforks”
•Why, despite widespread outrage, financial-fraud prosecutions by the Department of Justice are at 20-year lows
•Attorney General Eric Holder’s lucrative ties to a top-tier law firm whose marquee clients include some of finance’s worst offenders
•How Obama’s trumpeted “task force” for investigating risky mortgage lenders—announced in this year’s State of the Union speech—is badly understaffed and has yet to produce any discernible progress
“Dimon and Obama go way back, to the early 1990′s in Chicago.”
Aw, that’s so sweet. Barry has admitted to getting twisted by hanging around these types too much.
Dimon and Obama go way back, to the early 1990’s in Chicago. Dimon has always impressed being as being more amoral and arrogant that Lloyd Blankfein too.
No bank is too big to whale.
The headline in the Financial Times reads, “JP Morgan’s Whale Causes a Splash “. One thing for sure is that these bankers have not learned a thing. And Jamie was supposed to be one of the better ones….
Ahab lost a leg to the whale. Dimon only lost two billion. His salary and bonus won’t be effected. This is more like Dimon losing 2 or 3 hairs to the whale… He can go out and buy a transplant, no need to be upset.
The ocean of American ignorance and apathy, is wide and deep. The Banksters have smooth seas, clear skies, and a far far horizon. The Banksters and Whales get along in “Moby Dimon” …er eh… I was going to write “Dimon Dick” and then giggle, but I’m much too mature for that. 🙂
The London Whale blows $2Bn. That’s got to suck!
I’d say it was a sperm whale.
http://dealbook.nytimes.com/2012/05/11/s-e-c-opens-investigation-into-jpmorgans-2-billion-loss/
http://www.salon.com/2012/05/11/romneys_jamie_dimon_problem/singleton/ “J. P. Morgan’s 2 billion dollar blunder make Mitt’s pledge to repeal Obama’s bank reform look dumb”.
“There were many errors, sloppiness and bad judgment . . . grievous mistakes” . . . like not sending you to prison for the rest of your life for your role in the CDS debacle, Jamie. Like not sending in the regulators to break up your bank. Like bailing your criminal acts of malfeasance out in the first place.
I don’t think this is Dimon’s final encounter with “the whale”…unfortunately.