HOW DO YOU LIKE ME NOW ? Jamie Dimon of JP MORGAN that is !!!

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    Jun 13, 2012 9:37 PM GMT
    Senate treats JPMorgan CEO Dimon with kid glovesBy Roland Jones

    It was billed as a tough grilling but ended up more like a light sauté.

    JPMorgan CEO Jamie Dimon lived up to his reputation for steadfastness and tough dealing Wednesday in a forthright, and sometimes combative, performance before the Senate Banking Committee.

    Dimon was expected to receive a frosty reception in his first congressional appearance since he announced the bank sustained a trading loss some analysts now estimate is at least $3 billion. It was a massive loss for the nation's biggest financial institution.

    Instead, Dimon, who has won praise for bringing JPMorgan (JPM) through the financial crisis relatively unscathed, was treated cordially by most of members of the Senate Banking Committee. They peppered him with questions about regulation and risky practices at the bank, but did not press him to give an update on the losses resulting from the trade. JPMorgan is expected to give an update to shareholders when it reports its second-quarter earnings July 13.
    Dimon told lawmakers he could not defend the strategy conceived in the company's London-based chief investment office. He explained that what began as a hedge mutated into a multibillion-dollar trading loss.

    He insisted the bank’s botched trades were designed to hedge its overall risk rather than simply a speculative bet that was hidden from shareholders and regulators.

    “This particular synthetic credit portfolio was intended to earn a lot of revenue if there was a crisis. I consider that a hedge,” Dimon said. “What it morphed into, I will not try to defend.”

    Previously: Live blog of Dimon's appearance before the committee

    Dimon, known for his skills as a risk manager, has been an outspoken opponent of the Volcker Rule, which was intended to reduce risky trading by banks. Dimon used his platform in the nationally broadcast hearing to criticize proposed rules to change bank regulations -- rules he said do not make sense.
    When asked by Sen. David Vitter, R-La., if he thought there could be a “true version” of the Volcker Rule, which is mandated by the 2010 Dodd-Frank financial reform law, Dimon said, “I think we’re going to really struggle to get it right.”

    When Vitter asked if it would be worth lawmakers starting with a blank page to rewrite it, Dimon said: “I think it’s unnecessary … it’s just too confusing,” adding that risk could be controlled with proper capital and risk controls.

    Dimon said the Dodd-Frank law has not solved problems facing Wall Street but instead has created a confusing new regulatory system for banks.

    “What we set up is a system with more and more regulators. We don’t actually know who has jurisdiction over many of the issues we are dealing with anymore,” he said. “I would prefer a simple, clean, strong regulatory system, with real intelligent design, but that's not what we did.”
    The hearing -- which included questions about bank risk, the crisis in Europe, and penalties for JPMorgan employees involved in the bank’s trading debacle -- did produce a few flashpoints.

    When Sen. Jeff Merkley, D-Ore., told Dimon that his bank would have failed if not for the injection of billions of dollars in federal bailout money at the height of the 2008 financial crisis, Dimon reacted angrily.

    “I think you were misinformed,” he snapped, saying that his bank did not need so-called TARP funding but was asked to accept it “by the Secretary of the Treasury of the United States of America.”

    Earlier, after Dimon said JPMorgan’s “fortress balance sheet” is intact and that the bank will be solidly profitable this quarter despite the trading losses, Sen. Bob Menendez, D-N.J., responded that the bank’s balance sheet has a “moat dug by taxpayers,” noting that taxpayer money has played a part in keeping his Dimon’s bank healthy.

    Menendez also blasted Dimon for calling bank capital rules "anti-American
    Committee Chairman Tim Johnson opened the questioning by asking about Dimon’s “tempest in a teapot” comment -- the phrase he used to brush off early media reports of multibillion-dollar losses at the bank.

    “When I made that statement, I was dead wrong,” Dimon told Johnson, explaining that at the time he had been assured by his lieutenants the the bad trades were an isolated incident.

    Johnson, D-S.D., also asked whether the bank’s compensation structure incentivized risk-taking and whether the trading debacle will lead to “clawbacks” -- efforts to recover compensation paid to employees whose performance was later found to have harmed the company and shareholders.

    Dimon said it’s “likely, though subject to board [approval], that there will be clawbacks.”

    Asked the same question by Sen. Chuck Schumer, D-N.Y., Dimon said there could be several layers to the clawbacks. For senior staff, there could be clawbacks “for bad judgment,” he said

    Looks to me like the damn fox will be staying in the hen house !!

    Should he go or stay? Shouldn't Obama get rid of this guy from the advisory board position he placed him on ? Oh but we cannot do that, THE ELECTION IS COMING SOON, don't rock the boat RIGHT ?
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    Jun 13, 2012 9:56 PM GMT
    The financial services bailout is where tea partiers and ows folks intersect in their opposition -

    Dimon is a Democrat and worked in Barack Obama's adopted hometown of Chicago.

    After Obama won the 2008 presidential election, there was speculation that Dimon would serve in the Obama Administration as Secretary of the Treasury. Obama eventually named the president of the Federal Reserve Bank of New York, Timothy Geithner, to the position.
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    Jun 14, 2012 12:23 AM GMT
    It's funny how conservatives in other countries think they understand America but make basic mistakes like ignoring how Jamie Dimon has been an outspoken critic of the President for about two years now. icon_rolleyes.gif