Jamie Dimon: Too Big to Fail, Too Big to Jail!

Long-suffering share-holders are bearing the brunt as JP Morgan shares come crashing down, but Jamie Dimon still thinks he’s worth his $23 million remuneration package ..

When will they ever learn?

Over the past few days investment banking giant JP Morgan Chase, the USA’s biggest bank, has announced trading losses of a staggering 2 billion dollars. As a result shares in the bank have come crashing down, so far by a massive 10%, effectively wiping more than $19 billion off its market value in just two days.

The crisis has been blamed on a UK-based trader called Bruno Michel Iksil, aka the London Whale, due to the huge size of the risky and ill-considered trades he made.

JP Morgan Chairman and Chief Executive Dimon, never one to shy away from the limelight, even when the headlines are far from flattering to him, has admitted that he was “dead wrong’ to dismiss concerns about the bank when quizzed about risky investments just over a month ago.

 In recent years he has been stridently vocal in his opposition to Banking Reform and the efforts of the Obama administration to tighten up banking regulation, going so far as to deride the Volcker Rule and the Basel III regulations as “Anti-American”. What a nerve the man has got! In January this year he received a pay and bonus package estimated at $23 million . He is arrogant enough to believe that he is indispensible enough to have “earned” this obscene sum, even when thousands of ordinary bank employees are made redundant, tax payers foot the bill to bail out the banks in the wake of the 2007 Credit Crunch, and share- holders in the banks see their life-savings dwindle away before their very eyes.

They may not remain passive for very much longer, however.  Jamie Dimon is currently facing a share-holder vote of ‘no confidence’ which may see him stripped of some of his dual responsibility as both Chairman and Chief Executive.

Ina Drew, formerly Chief Investments Officer at JP Morgan, with over all responsibility for the trading division which made the $2 billion loss has already “retired” from that position.  She’s gone, but this is hardly a punishment: with estimated earnings of more than $32 million over the last couple of years, I would call it Happy Ever After!

President Obama has spoken out, saying that the crisis at JP Morgan underlines the need for tighter financial services regulations. Speaking to ABC’s The View he said

 "Jamie Dimon…is one of the smartest bankers we got and they still lost $2bn and counting, precisely because they were making bets in these derivative markets.
Keep in mind if we get all the rules that we proposed and were passed by Congress implemented into law, it should prevent this kind of stuff from happening” .

I couldn’t agree more.  We need stringent and well-policed banking regulations to put the brakes on this run-away gravy train for banking executives, financed by the share holders and guaranteed by the tax payer, once and for all.  The new regulations are not Anti-American, but very necessary for the recovery and survival of the US economy in these times of global recession.