The Tai-Chi Mastery of Banker Bull$#!*

Posted on May 15, 2012


Recently, the name of JP Morgan’s CEO has come into the news because he has been at the helm while the bank suddenly lost $2 billion on self-admitted “sloppy, stupid” bets with shareholder money.  While this was not in the league of contagious global financial doom, it was an out-of-the-blue super-loss for a bank that has prided itself on being relatively careful.  Up until now, Jamie Dimon has fashioned himself to be a rare “straight shooting”, down-to-earth mega-banker who says he sympathizes with Occupiers and the idea of paying higher taxes.  During the beginnings of the public rage against over-compensated bankers, he claimed that no golden parachutes existed at JP Morgan and that bankers, like himself at least, are people too–regular, $23 million-a-year earning folk.  And because his particular bank stood only ankle deep in the shizzer that took the American economy down, instead of the industry benchmark of neck deep, he has been treated as the Relative Hero–the Big Banker who could still be trusted–so, his stance has been that it is still possible and profitable for banks to basically self-regulate.  He’s been the, “Poor man’s rich man” with the savoir-faire of laissez-faire.

Rewind to January 2012.  I was trying to understand the Euro crisis, by reading up on it and watching interviews with various “experts”. I happened on Dimon’s interview in Davos, with CNN’s Richard Quest regarding his views on the issue.  Being the CEO of the one of the biggest banks in the world, I assumed he would have something original to say.  But, what seemed to come out of his mouth was little more than vapour in the Swiss winter air.  Something about “something should be done, everybody needs to do all they can, I’m sure they are” etc.  Well no shit, Sherlock.  What a total waffle.  A la mode.  At first, I thought it was me, who needed to shake the Magic 8-Ball of Banker Rhetoric harder to extract meaning, so I kept re-playing his sentences over and over.  BUT…it was actually for the first time, in my shaky-foal-legged understanding of finance / economics, that I realized this man doesn’t himself really know things at a level he should know…and was Tai-Chi-ing his words to create an atmosphere of expertise.  I was surprised at myself!  I’m usually told this through the safe, reliable filter of a Liberal cynical sneer, and here I-did-it-all-by-myself!  Look, Mom!

(Please help me find this video–where he draws on Richard Quest’s chart.  It was January 26, 2012.  There was snow and they were on a balcony.  It’s been taken down.)

Anyhoo.  Fast-Forward to Now. Dimon is back, Mr. Nice Guy–admitting to being a very Bad Dog.  But see how he voluntarily sits in the Dog House in the wake of somehow having eaten $2 billion dollars off the kitchen table?  Big Banks are still wuvable yesss they are!  Here are some recent sound bites:

“We know we were sloppy, we know we were stupid, we know there was bad judgment. . . . Of course regulators should look at something like this, [but] we don’t know if [our actually breaking any law] is true yet.”

And a further “BUT”:

“This is not a risk that is life threatening to JP Morgan. This is a stupid thing that … we should never have done. But we are still going to earn a lot of money this quarter. So it isn’t like the company is jeopardized.”

True, 2 billion in losses is not much when you consider that in one quarter this year, JP Morgan made 19 billion.  But then after this disclosure, JP Morgan shares lost 20 billion in value.  Whatchu gonna do now?

“So, number one, we’re going to manage it to maximize the economic value for shareholders. What does that mean? It means that we’re not going to do something stupid.”

Again, no shit, Sherlock.

“Speaking for the Senior Management team and myself, while we can’t assure you we won’t make mistakes, we will – we can assure you we are going to try not to. These were egregious mistakes, they were self inflicted, we were accountable and we happened to violate our own standards and principles by how we want to operate the company. This is not how we want to run a business.”  (Meet the Press, May 13, 2012)

So, then you’ll agree that  William Golding hadn’t meant to write an inspirational handbook for the banking industry?

It’ll be interesting to see if Dimon can Tai-Chi this one away.  Pro-regulation folk have been doing the Charleston over the checkmating of the last bastion of banking self-rule.

Perhaps, it depends on what Dimon’s strategy is to stay afloat in the media savvy pool of public opinion:

#1. Pretend all along that he was really that lovable guy from the Ridiculist:

#2. Stay hidden behind a neighbourly-looking fence regularly dispensing questionable nuggets of wisdom from his seemingly greener lawn:

#3.  When in doubt, wax on, wax off:

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