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Eminentoes
America’s Most Overrated Banker
Jamie Dimon, the president’s favorite banker, cries a river for himself.
It was another instance of bad execution. In an act of public contrition, Jamie Dimon, the most overrated banker in America, fell on his sword — and missed. The tip of his sword only grazed his side before it pierced the heart of Ina Drew, JP Morgan Chase’s chief investment officer and the bank’s fourth highest paid officer, who had been tapped to take the fall with him — or, rather, for him.
Only days before this happened, as Wall Street Journal recounts, Dimon was telling colleagues that he didn’t have the heart to fire her: “What if this were your sister after 30 years of great performance and you said: ‘You’re out of here.’”
Well, he went ahead and fired her. And no matter, for afterword there were hugs all around. This is how the WSJ described the scene in its banner story on Friday, May 18 (“Inside J.P. Morgan’s Blunder: CEO Dimon blessed the concept behind disastrous trades”):
On Monday [May 14], Mr. Dimon accompanied Ms. Drew to the firm’s trading floor to announce her departure, and then to the operating committee meeting, where Ms. Drew apologized, attendees say. Mr. Dimon gave her a bear hug on the way out, they say.
Jamie had called the trades that led to $2 billion or more in
losses “sloppy” and “stupid.” He has described the transactions as
“self-inflicted” wounds. Most observers might think that would be
enough.
Nevertheless, Jamie, a long-time Democrat, seems oddly determined
to play the part of Icarus — the Greek wonder boy of an earlier
time who perished as a result of flying too close to the sun. Could
it be that Jamie is playing this role for the express benefit of
his friend — the full-time presidential candidate, sometime
president, and all-star banking analyst Barack Obama?
“JPMorgan is one of the best-managed banks there is,” the president said last week. “Jamie Dimon, the head of it, is one of the smartest bankers we’ve got, and they’ve still lost $2 billion and counting.… You could have a bank that isn’t as strong, isn’t as profitable managing those same bets and we might have had to step in.”
Who after all would know more about banking than a former community organizer who provided legal advice to ACORN, an organization that excelled in extracting money from banks for failing to make as many loans as they should to poor credit risks?
And of course there are other facts to consider: JP Morgan’s losses haven’t cost the taxpayers any money (“not a single dime,” as the president might say); they haven’t caused any of its customers to lose money; and they do not seem to have placed the bank in any danger of insolvency.
From start to finish, the WSJ article of May 18 dramatized the idea of unregulated exuberance in soaring too close to the sun. And it did so with the seeming connivance of Jamie Dimon and his top lieutenants — given all the attention-getting quotes attributed to “attendees” at key meetings:
For the first time [on April 30], Mr. Dimon saw all the positions, how they were connected, and how complex they were. It made him queasy, he told colleagues.
He immediately set up a war room on the 48th floor of J.P. Morgan’s Park Avenue headquarters in Manhattan, led by Morgan’s risk chief John Hogan. Financial, risk, and regulatory managers gathered in offices and conference rooms there, assembling documents and scribbling on white boards.
Mr. Dimon told the group “We’re in a major storm,” attendees say. “We’ve got to get to the bottom and come clean.
Poor Jamie. He didn’t sleep well that night. Nor the next several nights either. Entering, it would seem, the Dimons’ bedroom, we learn that Jamie “confided” in his wife: “I missed something bad.”
Then came the most memorable scene of all. This was not the May 10 conference call in which Jamie and the bank disclosed $2 billion in losses. It was next evening, when Jamie’s crisis management team moved from the “war room” to his office for some late night drinking and bonding:
Late that Friday night, several executives gathered in Mr. Dimon’s office. Messrs. Dimon and [Mike] Cavanagh drank vodka. Others had wine. They told their boss of how they had let down the firm, attendees say. “We all did,” Mr. Dimon replied, according to attendees. “Put on your JPM jerseys and get ready. We are going to take a lot of hits. We’ll draft our best team and get through this.”
About the Author
Andrew B. Wilson, a frequent contributor to The American Spectator, writes from St. Louis.
Letter to the Editor View all comments (24) | Leave a comment
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Jack in Wi.| 5.21.12 @ 8:14AM
Most people who make big blunders that cost their company billions of dollars get fired. Mr. Dimon should have been fired period.
Mac Jehoff| 5.21.12 @ 8:46AM
Go buy a few thousand shares of JP Morgan, charm the board of directors, and then pull the trigger to fire Mr.Dimon. The sage of Fromageville strikes again.
Kumar | 5.21.12 @ 6:10PM
there is pin drop silence on Jewish ethnic networking and warfare against Whitey.
Whitey is so gullible and so clueless he refuses to see the plain truth of things.
Whitey gets poorer and less free everyday. Whitey dies in Iraq/Afghanistan everyday.
Whitey gets flooded with 3rd world everyday.
Whitey gets looted and plundered by Jewish bankers everyday.
Clueless Whitey deserves it.
Wordmonger| 5.21.12 @ 8:44AM
Mr.Wilson, did you really mean aferward there were hugs,etc?
Von Mises Jr| 5.21.12 @ 9:03AM
No one should be surprised. "Crony capitalism," "corporatism" or what simply used to be called "fascism" and "central planning" has never worked. We were told that Barney Fwank was the genius boy from Harvard. Look at Fannie Mae and Freddie Mac. Robert Rubin and Vikram Pandit were the "best and brightest" and what did they do for Citi other than near bankrupt them and get bailed out.
Obamanomics is not intended to run business efficiently. It is a money laundering machine, and a freaking disaster in the end. JPMorgan, BOA, Citi, and reluctantly Wells Fargo have been turned into a money laundering operation for "Little Timmy" Geithner and the Obama regime. They borrow at the Fed Window at .002% and lend at 2-3% coupon by buying T-Bills at an "all you can eat" buffet.
Not that Buffet, but he is part of the game as well. That is why he suffers being used as a "Bokonon" against his fellow "fat cats." It is the dues for being a crony capitalist.
Ryan| 5.21.12 @ 10:57AM
I MUCH prefer the term "corporatist" here, as I dislike attaching the term "capitalist" to anything these crooks do.
Von Mises Jr| 5.21.12 @ 11:43AM
I agree Ryan. I just wish to alert people that the fascist "Third Way" was named "Crony Capitalism" to try and connect fascism to capitalism. Fascism is socialism with the nuance being "control" versus ownership of the means of production. I think people need to know that. It is a distinction without difference.
Ryan| 5.21.12 @ 12:28PM
I don't think that it's so much socialism - property is technically still in "private" hands under fascism, with more collusion than control between the state and corporatists.
Of course, the end result is exactly the same, with the nuances being barely discernable.
Von Mises Jr| 5.21.12 @ 1:51PM
Property right means to utilize and dispose of assets as one wishes. If the government controls the company as with GM, GE, "Green Energy," then they de facto own the company.
R Martin| 5.21.12 @ 9:04AM
Some thoughts:
A $2 billion loss to JPM is a slap in the face, not a serious wound and certainly no reason for politicians to get the vapors. This is entirely a political tempest.
The facts, as we know them so far, reveal that strong personalities in geographically separated entities were inadequately managed, and that was due largely to the absence of Ms. Drew, who was on sick leave. One might reasonably ask whether or not politicians who have managed our government into a rather nasty hole are best qualified to question the management practices of a private sector company.
I suspect Mr. Dimon is not a particularly cuddly or likeable person. But he is certainly not the most overrated banker. That would be Mr. Pandit at Citicorp.
Most bank stock prices are lower today than they were at the end of 2005. Even the well-regarded Wells Fargo is off despite the Dow being up almost 20 percent.
Finally, let’s see how JPM resolves this matter before we jump headlong into a government fix.
Clint| 5.21.12 @ 9:29AM
So Far, Ina Drew Has Taken The Fall.
David W| 5.21.12 @ 9:32AM
They went into his office and had vodka. You know, maybe that's part of the problem as well.
Paul from SA| 5.21.12 @ 10:17AM
When dozens of Democrats on TV, including Obama, claim Jamie Dimon is the smartest and best banker in the world, we conservatives know they are lying and tying to conceal something.
It makes me believe Dimon is corrupt and is a big-gov't Democrat -- spending other peoples' money for personal gain.
LMajito| 5.21.12 @ 10:44AM
Having witnessed first hand (and suffered as well) how inept JPMorgan (aka Chase) has been for us for the last 4+ years, when i heard POTUS state 'JPMorgan is one of the best-managed banks there is' , its proof to me (beyond any doubt) that he is totally clueless when it comes to financial matters...but then again, BHO has about half a million worth of shares in JPM stock...he's better than Hillary in commodities...
What was the net worth of BHO when he ascended to the WH? now he's worth 10 mill?? the late usa is no more and more resembling a banana republic where their political leaders become insanely rich as soon as they take office...
besides, JPMorgan is a private entity, the money they lost is private money. Leave it alone and let their shareholders determine their future...
However, the government should take these huge banks and split them, preventing normal banking divisions to engage in fund management and such...like it was in the old days...
Now we have four entities controlling over 50% of the banking transactions in the US...that's a cartel and monopoly...we need smaller banks that actually do cater to their customers.
Warrior | 5.21.12 @ 12:26PM
Dimon is an ametuer. Making $2 billion dissapear with nothing to show for it to Obama, Geithner and crew only takes a few minutes.
Crassus| 5.21.12 @ 10:58AM
Put Bobby Lowder in charge of J. P. Morgan. He'll get the ship righted just like he did at Colonial Bank.
JoshInHB| 5.21.12 @ 11:13AM
And yet, this jackass was oh so important that he had to be bailed out in '08.
shipley130| 5.21.12 @ 12:15PM
I get the feeling that all the "losses" might be due to a bigger problem. Weapons of mass economic destruction. Can you say "Glenn Beck was right" and "Kevin Freeman knows what's going on".
shipley130| 5.21.12 @ 12:17PM
Is this what our military members are fighting and dying for?
Cuffs| 5.21.12 @ 12:35PM
Let me see, Geithner is from the NY Fed,
and Dimon sits on the board. Didn't the
Fed fee money to JPM to snatch up
Lehman? Washingto needs to purchase
a bigger bed so all of them can get in
together and snuggle.
cicero| 5.21.12 @ 3:45PM
Let's all shed aa tear, now, for Ina drew and the other 2 or 3 who took the bullet for the team. Now, until they end up with another bank, or investment house, or with a government under secreaties' position, they will have to struggle along with the 10s of millions they have stuffed down the front of their nickers over the past few years. Poor babies. This is all for show. the idea is to make the masses think that our fearless leaders really do have a clue, and really do care about the taxpayers they have been fleecing.
The only way to solve the problem is to pass legislation that clearly states that the United States' government will not spend one single d ollar of taxpayer money to bail out any banking institution; will not spend one taxpayers dollar investing in a private corporate or individual venture; and will give no takpayer money to anyone without a contract that benefits the taxpayer.
bagittagit| 5.21.12 @ 8:40PM
Again, what's being papered-over is was this a mistake or a crime? $2 bil. may not be that much to JP Morgan per se but it is a nice little bundle for a relatively few people to divy up amongst themselves. Like their gov. counterparts, corporate big-shots are raiding the companies they are supposed to growing and prospering instead of raping and looting.
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