Why is it that Elizabeth Warren is the only politician with the balls to say this? Good for her!
Elizabeth Warren, a Massachusetts candidate for U.S. Senate, called for JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon to resign his position as a director at the Federal Reserve Bank of New York.
Dimon, who disclosed a $2 billion trading loss by his bank last week, shouldn’t stay on the board of the New York Fed because “he advises the Federal Reserve on the oversight of the financial industry,” she said in an e-mail release.
Warren, a Democrat, has served in the Office of the President and as chairwoman of the Congressional Oversight Panel for the Troubled Asset Relief Program. She helped establish the Consumer Financial Protection Bureau.
“After the biggest financial crisis in generations, the American people are frustrated that Wall Street has still not been held accountable and does not appear to consider itself responsible,” she said. “Dimon should resign from his post at the New York Fed to send a signal to the American people that Wall Street bankers get it and to show that they understand the need for responsibility and accountability.”
Speaking of Wall Street, IPO’s and the slimy Capitalists who run all of it there’s this. Facebook co-founder Eduardo Saverin who now lives in Singapore has renounced his American citizenship. Seems that Singapore has no capital gains tax. So if Saverin, who owns about 5% of Facebook’s stock, makes a few billion dollars off Facebook’s IPO he won’t have to pay the U.S. treasury one thin dime in taxes now that he’s renounced his citizenship. Ain’t Capitalism grand? This guy should be put on the terrorist watch list.
Susie nailed what’s happened at JPMorgan — a month ago!
Dimon said over the weekend that, apparently, no one, such as himself, could have known that the Whale was involved in risky derivatives, that no one had understood what was going on, and therefore…based on the report of Ina XXX taking “retirement” due to her role in not managing the Whale and risk properly…someone had to go. The Condi Defense.
But, 1der at FDL today, linked to a report by Susie, from 4/13/12 at Crooks & Liars, about how Dimon had demanded that the traders take more risks, make more money, etc.
BEGIN QUOTE:
Jamie’s employing the Sgt. Schultz defense.
Last month from C&L: JPMorgan Chase & Co. (JPM) (JPM) Chief Executive Officer Jamie Dimon has transformed the bank’s chief investment office in the past five years, increasing the size and risk of its speculative bets, according to five former executives with direct knowledge of the changes.
Achilles Macris, hired in 2006 as the CIO’s top executive in London, led an expansion into corporate and mortgage-debt investments with a mandate to generate profits for the New York- based bank, three of the former employees said. Dimon, 56, closely supervised the shift from the CIO’s previous focus on protecting JPMorgan from risks inherent in its banking business, such as interest-rate and currency movements, they said.
Some of Macris’s bets are now so large that JPMorgan probably can’t unwind them without losing money or roiling financial markets,
The transformation of the CIO has its origins in Dimon’s arrival at JPMorgan with the purchase in July 2004 of Bank One Corp., where he was CEO. Less than three months later, Dimon’s long-time lieutenant Michael Cavanagh became chief financial officer. He replaced Dina Dublon, a 23-year veteran of JPMorgan and its predecessors.
At the time, JPMorgan also said Ina Drew, who ran global treasury at JPMorgan prior to the acquisition, would report directly to Dimon. Drew’s title changed in February 2005 to “chief investment officer,” according to the 2005 year-end filing.
Dimon pushed the unit to seek bigger profits by buying higher-yielding assets, including structured credit, equities and derivatives, and ramping up speculation, according to two former employees.
END QUOTE.
Always, always, always place the real blame of underlings and toss them to the wolves.
Bloomberg reporter was on NewsHour tonight (can’t give you name as I was doing kitchen stuff and couldn’t stand around to watch for her name — NewsHour used to a guest list for each segment, as possible, prior to broadcast and there to check on. No longer. Have to wait til tomorrow — and I usually forget.)
But…she mentioned that when Dimon got the CEO position he was extremely hands on in telling the London office they would have to take more risks, get more rewards for the firm and themselves, etc. He moved Ina Drew from heading an investment area dealing with government bonds, pretty normal banking stuff, to this hedging, higher risk trading group.
But seeing “Margin Call” may be influencing my perceptions….
BEGIN QUOTE from Bloomberg article:
Dimon encouraged her unit to boost earnings by buying higher-yielding assets, including structured credit, equities and derivatives, in an expansion of risk-taking led by Macris, ex-employees said in April. That shifted the office from a role mitigating lending risks to becoming a profit center, former executives said.
Dimon said on May 10 that the unit made “egregious mistakes” by taking flawed positions on synthetic credit holdings and that JPMorgan could lose an additional $1 billion or more as it winds down the position. The U.S. Securities and Exchange Commission, the Federal Reserve and the Commodity Futures Trading Commission are investigating, according to people familiar with the probes.
END QUOTE.
It struck me that perhaps Dimon wanted someone from a low risk area to oversee this group and be the fall person for any downsides? However, the article also says her group was very successful during her tenure. Until this monster “mistake.”
The bank’s hedging activity was illegal, according to one of the legislators (Carl Levin?) who wrote the law.
The hedging activity was supposed to diminish investment risk, not increase it.
Dimon should resign from the Fed, or be removed, ASAP.