JP Morgan Chase’s $2 Billion Loss: Stupidity Really?Posted: May 14, 2012
(Update 5/15/2012: Chase shareholder meeting today and shareholders approved Chase CEO Dimon $23 million pay package. Many votes were cast prior to disclosure of $ 2 Billion loss.)
In response to JPMorgan Chase’s recently reported $2 billion dollar loss due to “derivates”, California’s Senator Feinstein stated on Fox News,
“Well, this is a big surprise because this particular bank is well-respected. It is well-led. And so, to have this kind of a loss from hedging activities is a big surprise. I think what it points out that there are no rules of the road for hedging and for derivatives. And this needs to happen.”
I’m not surprised, what’s changed. Its been over 3 years and here we are again, bankers losing billions. And, no real safeguards. Or, any meaningful prosecutions.
Chase is a “well-led” bank. Really? In 2008 and 2009, Chase received a multi-billion dollar taxpayer bailout under this very same CEO, Jamie Dimon.
And, yet, Chase’s Dimon even admitted on Sunday’s Meet the Press, as reported on cnn.com, “In how we manage that portfolio, we did lose $2 billion trading. In hindsight, we took far too much risk. The strategy we had was barely vetted. It was barely monitored. It should never have happened…this is a stupid thing we should never have done.”
Chase’s strategy was “barely vetted”? “barely monitored”? Chase “took too much risk”? “a stupid thing”?
So, now, in addition to the same “too much risk” excuse that Chase used to explain prior losses during the 2008-2009 market meltdown, we now have learned that over 3 years later that Chase also fails to properly monitor and vet their investment portfolios. Wow.
With all due respect Senator, how do you legislate against that “stupidity”? Or, will another billion dollar taxpayer bailout cure any “stupidity”?
And, frankly, can a bank still claim “stupidity” 3 years after the market crash?
Maybe, this is a bank too “stupid” to hail.
Simply my opinion, what say you?