The brilliance of our aged U.S. Senators never ceases to amaze me.
There it was, written in bold headlines in a recent article, “Senate grills J.P. Morgan over ‘London Whale’ loss.”
What appears to be a fairly simple stock market transaction is once again converted into a very complex issue by the bought-and-paid-for-legislators.
The derivatives trading desk in London represented a very large portion of profit for J.P. Morgan’s bottom line.
To believe that J.P. Morgan’s upper management team had absolutely no clue as to what was going on is to obviously suspend reality.
Now, however, we’ve learned that it was much more than just a “tempest in a teapot,” as J.P. Morgan CEO Jamie Dimon so quaintly described it back in April of 2012.
In fact, at the recent Senate investigation subcommittee hearing, former J.P. Morgan Chief Investment Officer Ina Drew described it “like the Twin Towers falling down.”
This most recent big bank Washington, D.C. drama harkens me back to when ex-MF Global CEO Jon Corzine — after his firm lost $1.6 billion of customer money in 2011 — was called before a Senate committee to be asked, “Where’s the money?”
Paraphrasing Jon, he so aptly replied, “Beats me, I was only the CEO.”
Of course, any first-year business student would find it incomprehensible that a sharp, skillful CEO, much like Jamie Dimon, along with the rest of J.P. Morgan’s upper management team, were not aware of a multi-billion dollar trading loss which was increasing on a daily basis.
Au contraire, it seems that upper management did have a better feel for the stock market than the “whale” since management apparently encouraged the “whale” to continue on and — the general public is expected to believe — without Dimon’s knowledge.
In addition, any first-year business student would have simply asked Jon Corzine about the person that executed Corzine’s Italian bond trades and also would have inquired about the person that sent Corzine the margin call, because that’s where the money is.
Oh, it was J.P. Morgan…..surprise, surprise.
The U.S. Senators, however, having been lobbied by the $35 million that the House of Morgan has spent over the past five years, will probably choose to suspend reality.