JP Morgan (NYSE:JPM) got its ass kicked in Washington DC again. The whole London whale thing was rehashed except with power of subpoena and regulatory oversight a slightly different view is coming out.
Jamie Dimon originally characterized the problem as dumb mistakes and people got fired but we have the capital so don’t worry. Some of the testimony indicates major fails in the governance process. Executives skated the puck around pretending it was something else as the risk management process was subverted to get around problems until the whale was so big nothing more can be done.
Imagine a Harvard Case Study where the CEO declares “We were dumb”. Yes they were dumb and continue to be dumb. It no longer is business. This is politics. The Obama administration needs to show changes on Wall Street. Jamie Dimon who once nurture fantasies of a cabinet level position is now only a CEO of a major NYC money center bank. (with a fancy Upper East side apartment of course)
Elizabeth Warren is a Senator from Massachusetts and probably will be re-elected for the rest of her life. Jamie Dimon has played his political cards very poorly. He even flirted with that guy Romney for a little while. Politically they want a poster boy scalp. The left wants the raw meat. The right is too disorganized to mount a defence. The Tea Party may be funded by Wall Street but it does not know how to defend Wall Street.
Target JP Morgan and Jamie Dimon.
Look at JP Morgan’s Board of Directors. no one and I mean no one has any experience in trading, derivates or mathematics and underpins both. So when the regulator says the board is inadequate you have to be afraid. But how do you change the board. The power structure will support itself and defend against change. shareholder wealth will not be maximized.
So if you are starting to belive there is a political plot against Jamie Dimon and JP Morgan. I would agree with you.
Check out a few board members and see if they should be involved in trading derivatives and political machinations.
James Bell 63 retired from Boeing.
Timothy Flynn 55 retired head of KPMG
Crandall Bowles 64 retired Chair of Spring Industries a manufacturer of window products made it onto the board of JP Morgan.
David Cote 59 Chair and CEO of Honeywell. an industrialist.
William Weldon 63 was Chair and CEO J&J now just chair.
Laban Jackson 69 Real Estate Developer
Steven Burke 53 NBCUniversal and Comcast
Ellen Futter 62 President American Museum of Natural History. Perhaps one day they will have an exhibit of trading desks.
Lee Raymond 73 Fmr Chair & CEO of ExxonMobil. He may have some understanding of trading.
James Crown 58 Private Investor.
No one on the board has an operational background in banking, financial services, derivatives, or political operations. Perhaps Team Obama has figured this out and sees a soft target.
Not sure if Jamie Dimon has figured this one out yet.
But he will?
George Gutowski writes from a caveat emptor perspective. Follow him on twitter@financialskepti or maybe follow his evil twin who is writing a Wall Street Murder Thriller at twitter@georgegutowski