JP Morgan : Jamie Dimon Testimony

Ever thought of  how wonderful its is ! as we always knew it goes like this: Mahatma Gandhi, Mother Theresa, Jamie Dimon – the greatest friends of humanity. Well the story is over and it has become past the latest Jamie Dimon dog and pony show. To summarize what we can interpret it from : –

  • JPM is not too big to fail, but it is not at risk of failing unless the earth is hit by the moon”
  •  “We make CDS for the benefit of veterans, retirees, orphans and widows”
  •  “We only bought Bear’s assets in a firesale while the Fed backstopped its liabilities, because the US government made us”
  •  “VaR can be made to show anything. We have a closet full of models”
  •  “Gambling is not investing”

To sumarize the above Jamie Dimon refused to disclose the to-date losses on the CIO trade, but promises the firm will be profitable.
I went through an interesting piece the difference between ‘investing’ and ‘gambling’ . JPMorgan CEO diligently notes that “on average Gamblers lose” implicitly stating, we assume, that ‘investors on average win’

Betting against your initial bet suggests a lack of ‘knowing what you are doing’ is how Prof. Ackerman frames his concerns, and furthermore as hedging against your hedge just makes the whole thing farcical as if “throwing darts at a dartboard”.

if JPM is right a majority of the time it helps the company, but if they are wrong it puts systemically everything at risk – the public investing confidence in the system.

To conclude in the confidence Domon words “We don’t gamble; we do make mistakes”

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