Well the dog-and-pony show that was JP Morgan Chase shareholders meeting came and went.
If you blinked, you probably missed it.
Jamie Dimon’s heart-to-heart with his shareholders lasted a whopping 50 minutes on Tuesday. Apparently that was all the time he felt he needed to trot out the same apology speech he gave on Meet the Press, and then duck for cover.
And surprise surprise, nothing changed. Dimon held onto his dual roles as chairman and CEO, as I fully expected he would.
To the shareholders credit, they didn’t take this lying down. They challenged his role as a member of the New York Federal Reserve. They kept the heat on Dimon for Chase’s role in the mortgage servicing fiasco.
But Dimon’s responses were cursory at best, a brush off no different than the ones homeowners have gotten from Chase. They were hardly worth the price of admission.
Now I’m no conspiracy theorist, but clearly Chase held back this information about their $2 billion oops until after all the votes were in. That is clear.
Dimon may be saying the right things in public, but his actions clearly show that he is doing everything possible to downplay this loss. But if it goes unchecked, it could be a harbinger of even BIGGER losses.
Every consumer needs to a long hard look at the the way these banks do business and the interwoven relationship between these banks and our government. Not only are these banks too big to fail, but Dimon himself has become too big to fail in his own right.
The idea that he is both chairman and CEO essentially allows him to be judge, jury and executioner of his bank’s money. It’s too much influence for one man to have, and as this trading loss shows, it proves a need for proper checks and balances, not just for the banking industry, but within the individual banks themselves.
And if the government is going to be serious about financial reform, it has to come down hard on JP Morgan Chase, because Dimon won’t take care of business himself.
Unless he removes himself from the New York Fed, how can we take a thing he says seriously?
He calls his position on the Federal Reserve ‘an advisory role’, but it’s just further proof that it is impossible to tell where the banks end and the government begins.
It is a real problem how some Feds are encompassed by the Big Banks, and Dimon’s position is me example. The largest banks are creating a system that is there to protect their own hides, which is not what the Federal Reserve is intended for, at least on paper.
The Fed needs to be working to stabilize the economy and protect consumers from interest rate spikes and unemployment spikes, but it sure seems like they are there to make sure the banks will have some kind of liquidity, and for the banks to have a bailout big brother in DC whenever they need it.
While the FBI is investigating the trading loss, I have serious concerns about its legitimacy. President Obama points to JP Morgan’s actions when talking about the need for financial reform, but he also described Dimon “one of the smartest bankers we’ve got”, so the President is too is talking out of both sides.
Both the President and Dimon are conveniently overlooking how strong Dimon has campaigned against legit regulation, not to mention that Dimon has been to the White House 18 times, and had a private meeting with Tim Geithner just last March!. (For the record, I’ve been told my invitation is in the mail!)
For Dimon to suggest he is 80 percent for Dodd-Frank is fallacious, because he has been one of it’s most outspoken critics. JP Morgan has done everything possible to make sure Dodd-Frank lacked teeth, and it’s why we still haven’t gotten away from Too Big To Fail.
There have already been a few lawsuits over the $2 billion trading loss, and there are sure to be many more.
If the federal government does not take this incident with a sense of urgency, then it can only be a matter of time before the other shoe drops.
From The Trenches,