Sense on Cents

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

ISN’T IT TIME to subscribe to all my work via e-mail, an RSS feed, on Twitter or Facebook?

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.

This entry was posted on Wednesday, June 13th, 2012 at 9:25 AM and is filed under General, JP Morgan. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.