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High, Hard Heat for JP Morgan’s Jamie Dimon

Posted by Larry Doyle on June 13, 2012 9:25 AM |

Most eyes on Wall Street will be fixated this morning on JP Morgan CEO Jamie Dimon as he provides Congressional testimony and faces questioning atop Capitol Hill.

Wall Street banks may be too big to fail, too big to manage properly, and too big to understand for most financial executives.

Jamie Dimon is unlike most financial executives.

Having worked at JP Morgan Chase for six years early last decade, I personally witnessed Dimon’s amazing level of detailed insight and analysis on more than one occasion. Do not think for a second that he was not fully aware of each and every exposure within JPM’s chief investment office. Impossible you think? 

I am firmly convinced Dimon is actually a savant in terms of his ability to drill down into the minutest of details on the most arcane topics. In fact, I believe Dimon took almost a perverse pleasure in grilling department heads on their business units and operations.

Understanding the specific exposures and overall risk profile within the CIO’s office? Nothing more than a ground ball for Mr. Dimon.

To that end, Congress should not allow Dimon to deflect the serious inquiry which investors and the nation deserve to hear so we can all understand how JP Morgan operates.

Let’s dispense with the formalities. Here are the questions I would throw high and hard right under Mr. Dimon’s chin:

1. When, and be very specific sir, was the first time that the CIO’s office utilized a different valuation on a specific investment position than the valuation utilized by the trading desk within your broker-dealer operation? (If he chooses not to answer or deflects this question, tell him to call his head of risk management, John Hogan, right then and there to get the answer.)

2. What was the actual price differential in these aforementioned marks and what was the overall monetary difference?

3. Why were different valuations allowed given the fact that the CIO was actively involved in trading positions on a daily basis?

4. Would you qualify the fact that different valuations were being utilized as a form of “cooking the books?”

JPM shareholders suing the firm certainly would like the answers to these questions. They deserve to know this information, as does every investor and the nation as a whole.

There you go. While we will certainly get plenty of posturing from both sides of the desk and the aisle, which Senator has the cojones to throw these fastballs in classic Nolan Ryan style?

America deserves the answers. Will we get them?

Larry Doyle

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I have no affiliation or business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

  • Harry Johnson

    The economy will not improve until a huge number of hedge fund managers, investment brokers, commodities traders, derivative speculators, investment bankers, venture capitalists and their ilk are in prison for long terms.

    • Don’t forget to throw in the irresponsible senators and representntatives and that’s a remedy we would go for.

  • With more than $4 trillion in cash setting on the sidelines, it should come as a surprise to no one why the economy added only 69,000 jobs in May and unemployment grew to 8.2%. The fact is, Americans no longer trust Wall Street banks, which reflects negatively on federal banking and market regulators tasked with protecting investors.

    Please sign the petition to the U.S. Senate Banking and House Financial Services Committee asking for improved oversight of federal banking and market regulators.

    To read more about what we’re trying to do and to sign the petition, click here:

    It’ll just take a minute!

  • Peter S.

    WSJ “Prompted by questions, Mr. Dimon said the still-unfinished part of the law known as the Volcker rule was unnecessary and “too confusing,” though he indicated support for stronger capital requirements to cushion against losses. In general, he argued that the Dodd-Frank overhaul passed nearly two years ago in reaction to the 2008 financial crisis is too complicated.”

    How about Glass – Steagall, that’s pretty simple.

    They just can’t give up the cake they eat.

  • Barry

    Brilliant! Thanks.

  • Anna

    Dimon isn’t the only person at JP Morgan whom Congress (and others) should be hesitant to trust. The Project On Government Oversight has identified seven members of JP Morgan’s team who used to work for the U.S. government and now lobby on behalf of JP Morgan, thereby giving them inside knowledge of governmental profits that can only benefit their new employer. More information here:

    JP Morgan Deploys Former Regulators to Talk to Current Regulators

    • LD

      Sounds something like this:

      “Welcome aboard…I think you will like it here!!”

      “Just go right through that “revolving door”, up the escalator, and you will see the red carpet rolled out for you!!”

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