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Can't believe the cajones on this guy - Jamie Dimon (1 Viewer)

I have not read the entire letter but there definitely is some truth to what he is saying.  I work in the banking industry and i can tell you first hand that Dodd's Frank is a nightmare.  Simple overreactions such as flood insurance and other regulations have cost lending institutions billions to fix and monitor.  Capital reserves that tier I banks are forced to maintain are also extremely aggressive.  If banks don't have money to lend then business that need money get hurt.  I am not excusing him, or any CEO of a large institution for that matter, of wrong doing but it doesn't mean all of  his points are completely invalid.     

 
Binky The Doormat said:
Dimon says regulation holding America back.

The ####### balls on this guy.  CEO of JP Morgan that was to pay $13B as one of the leading causes of the banking crisis.  

This guy should have already died in prison with a much larger ####### than he was born with.  
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I don't know what Dimon is referring to specifically, but more regulation does not mean better regulation.  We have a bad habit of layering regulation indefinitely due to political expediency as opposed to looking at it collectively and improving it.

We can simultaneously reduce regulation and improve its effectiveness.

 
this seems like  a reaction from a guy who hates CEOs who make a lot of money, not a guy who understands the ins/outs of regulation.

 
Most of their fines were related to Bear Stearns, which they "bought" at the request of the US Govt.  Jamie Dimon is not the villain you make him out to be.

 
New to Jamie Dimon?  He is revered on Wall St for these type of outbursts on behalf of the poor, downtrodden bankers

 
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There is plenty of blame to go around ...with Goldman Sachs leading the pack.  

Dimon led JP Morgan was in the middle of it.  It can be argued that a failure of regulation was more a part of the crisis than deregulation - but the answer isn't less regulation.  

 
Binky The Doormat said:
There is plenty of blame to go around ...with Goldman Sachs leading the pack.  

Dimon led JP Morgan was in the middle of it.  It can be argued that a failure of regulation was more a part of the crisis than deregulation - but the answer isn't less regulation.  
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No amount of regulation matters if it isn't adequately enforced.

 
Vanilla Guerrilla said:
No amount of regulation matters if it isn't adequately enforced.
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And even if everyone had the best efforts and intentions, it can still be very difficult to adequately enforce the regulations using staff at 1/10th or even 1/100th the cost of the talent they are trying to regulate. 

/former national banking regulator who moved to the private side 

 
RUSF18 said:
And even if everyone had the best efforts and intentions, it can still be very difficult to adequately enforce the regulations using staff at 1/10th or even 1/100th the cost of the talent they are trying to regulate. 

/former national banking regulator who moved to the private side 




 
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100% agree.  No easy solution.  

My additional aggravation comes from the amount of greed and law-breaking undertaken by a number of these entities.  And the fact that we don't hold these guys accountable for the grift and downright theft from customers and taxpayers ...then to have the nads to say regulations are holding them back.  

Goldman Sachs is still the worst of them all.  

 
sbonomo said:
I have not read the entire letter but there definitely is some truth to what he is saying.  I work in the banking industry and i can tell you first hand that Dodd's Frank is a nightmare.  Simple overreactions such as flood insurance and other regulations have cost lending institutions billions to fix and monitor.  Capital reserves that tier I banks are forced to maintain are also extremely aggressive.  If banks don't have money to lend then business that need money get hurt.  I am not excusing him, or any CEO of a large institution for that matter, of wrong doing but it doesn't mean all of  his points are completely invalid.     
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What types of reform would you have suggested in response to the 2008 crisis?

 
joffer said:
What types of reform would you have suggested in response to the 2008 crisis?
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Certainly not Dodd's Frank.  If you have specific questions i would be happy to expand or give you a real world assessment of how it affects banks from my perspective. 

 
sbonomo said:
Certainly not Dodd's Frank.  If you have specific questions i would be happy to expand or give you a real world assessment of how it affects banks from my perspective. 
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I guess I'm looking for the perspective of more than just the bank.  If a 50 billion dollar institution is inconvenienced a little or loses some profit, but that helps prevent another 2008-level crisis, I'm not going to lose sleep over it.

What about regulation of credit derivatives?  Essentially what Brooksley Born proposed in the late 90s.

 
sbonomo said:
I have not read the entire letter but there definitely is some truth to what he is saying.  I work in the banking industry and i can tell you first hand that Dodd's Frank is a nightmare.  Simple overreactions such as flood insurance and other regulations have cost lending institutions billions to fix and monitor.  Capital reserves that tier I banks are forced to maintain are also extremely aggressive.  If banks don't have money to lend then business that need money get hurt.  I am not excusing him, or any CEO of a large institution for that matter, of wrong doing but it doesn't mean all of  his points are completely invalid.     
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Not to defend Dodd-Frank, but what would you propose to prevent future abuses in lending practices? Complete deregulation isn''t the answer because human greed will always win out over sound lending practices.

 
jonessed said:
I don't know what Dimon is referring to specifically, but more regulation does not mean better regulation.  We have a bad habit of layering regulation indefinitely due to political expediency as opposed to looking at it collectively and improving it.

We can simultaneously reduce regulation and improve its effectiveness.
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I am not optimistic about that happening over the next four years.

 
I'm sorry, but to have the privilege of being a leader in the industry that we allow to produce 90%+ of the nation's money supply out of thin air, whining about being regulated by said nation just makes you an #######, even if the regulation sucks, mmmkay. 

 
Dimon is one of the reasons this country need a Bastille Day.  This anti-Dodds Frank bunk is the same hilarious and stupid stuff about the ACA.  "I can't give you an answer, but this is bad".  Ok, thanks for being part of the problem then.  So many people are just content on being tools of the wealthy.

 
Binky The Doormat said:
100% agree.  No easy solution.  

My additional aggravation comes from the amount of greed and law-breaking undertaken by a number of these entities.  And the fact that we don't hold these guys accountable for the grift and downright theft from customers and taxpayers ...then to have the nads to say regulations are holding them back.  

Goldman Sachs is still the worst of them all.  
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It's not just failing to hold the individuals accountable, but we need to hold the organizations accountable.  These corporations are immortal and collect knowlege and wealth unparalleled with a human individual, all the while incapable of being truly punished.

 
joffer said:
I guess I'm looking for the perspective of more than just the bank.  If a 50 billion dollar institution is inconvenienced a little or loses some profit, but that helps prevent another 2008-level crisis, I'm not going to lose sleep over it.

What about regulation of credit derivatives?  Essentially what Brooksley Born proposed in the late 90s.
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Actually i started to post about the derivatives and ran out of time.  That regulation was absolutely essential and has worked its way down to all levels of lending.  I can tell you from first hand from experience how many bad deals Bank of America did with Borrowers that had zero business utilizing a derivative (the most popular is issuing a swap to fix a floating rate loan).  Now your contention that it is an inconvenience is vastly understated to the point that deals just don't close.  This is extremely harmful to liquidity in the general market place which stifles growth.  Honestly, this is a much more complicated discussion.     

 
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sbonomo said:
Actually i started to post about the derivatives and ran out of time.  That regulation was absolutely essential and has worked its way down to all levels of lending.  I can tell you from first hand from experience how many bad deals Bank of America did with Borrowers that had zero business utilizing a derivative (the most popular is issuing a swap to fix a floating rate loan).  Now your contention that it is an inconvenience is vastly understated to the point that deals just don't close.  This is extremely harmful to liquidity in the general market place which stifles growth.  Honestly, this is a much more complicated discussion.     
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It must be, because I'm not sure what you're trying to say.  The regulation was both essential and harmful to liquidity, right? Essential to prevent what?

 
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sbonomo said:
I have not read the entire letter but there definitely is some truth to what he is saying.  I work in the banking industry and i can tell you first hand that Dodd's Frank is a nightmare.  Simple overreactions such as flood insurance and other regulations have cost lending institutions billions to fix and monitor.  Capital reserves that tier I banks are forced to maintain are also extremely aggressive.  If banks don't have money to lend then business that need money get hurt.  I am not excusing him, or any CEO of a large institution for that matter, of wrong doing but it doesn't mean all of  his points are completely invalid.     
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Simon should probably leave this message to someone else.

 
joffer said:
It must be, because I'm not sure what you're trying to say.  The regulation was both essential and harmful to liquidity, right? Essential to prevent what?
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I am sorry i was thinking specifically of interest rate derivatives (SWAPs) that were being used to synthetically produce a "fixed" interest loan.  Problem was banks, and i will discuss Bank of America specifically because i used to work there, were using these across all business lines.  For instance, Pre Dodd Frank they would take a Priest that wanted to buy a new church for his congregation.  Instead of setting up a mortgage style fully amortizing loan they would enter into a swap contract which has a monthly mark to market "MTM" based on LIBOR.  Now if you entered into that contract in 2004, by 2008 you were completely under water due to the free fall of interest rates.  Do you think the priest has any idea what that meant?  Nor did he have any idea how to pay his multi million dollar MTM when it comes time to refinance the note.  This is an extreme case but it happened way more than you think.The Bank loved these loans and used them very widely in all segment because they could book all of the revenue from the SWAP day 1 (SWAPS are a third party contract with a winner and a loser).  This is extremely advantageous from a revenue perspective because a traditional mortgage style loan would see revenue come over time. With Dodd Frank, there are actual guidelines of what a qualified investor is and who has the savvy to enter into an complex agreement of this type.  IMO, this is a good thing that came out of it.  

More to follow on some of the bad's of the regulations.   

 
sbonomo said:
I am sorry i was thinking specifically of interest rate derivatives (SWAPs) that were being used to synthetically produce a "fixed" interest loan.  Problem was banks, and i will discuss Bank of America specifically because i used to work there, were using these across all business lines.  For instance, Pre Dodd Frank they would take a Priest that wanted to buy a new church for his congregation.  Instead of setting up a mortgage style fully amortizing loan they would enter into a swap contract which has a monthly mark to market "MTM" based on LIBOR.  Now if you entered into that contract in 2004, by 2008 you were completely under water due to the free fall of interest rates.  Do you think the priest has any idea what that meant?  Nor did he have any idea how to pay his multi million dollar MTM when it comes time to refinance the note.  This is an extreme case but it happened way more than you think.The Bank loved these loans and used them very widely in all segment because they could book all of the revenue from the SWAP day 1 (SWAPS are a third party contract with a winner and a loser).  This is extremely advantageous from a revenue perspective because a traditional mortgage style loan would see revenue come over time. With Dodd Frank, there are actual guidelines of what a qualified investor is and who has the savvy to enter into an complex agreement of this type.  IMO, this is a good thing that came out of it.  

More to follow on some of the bad's of the regulations.   
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Thx.  I understood that.

ive never understood why MTM accounting is legal.  That was a big part of the whole Enron disaster right?

 
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The General said:
No matter how valid his points are or aren't  they will be dismissed because people think he is a blood sucking dickbag.
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While that may or may not be true, I've always thought he was one of the more well-respected CEOs of the big investment banks.  Granted, that's all relative.

 
joffer said:
Thx.  I understood that.

ive never understood why MTM accounting is legal.  That was a big part of the whole Enron disaster right?
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You need MTM accounting in order to make the contracts work.  The posting of collateral is necessary to ensure that someone doesn't get holding the bag at settlement with an insolvent counterparty, and MTM is necessary to keep those amounts in line with the current value of the original contract.

Enron was brought down by old fashioned greed, but facilitated by an elaborate accounting fraud scheme that created sham off balance sheet entities that hid enormous liabilities from its counterparties, while also recognizing large gains on its income statement from what were just temporary MTM swings.  Arthur Andersen was justifiably bankrupted by their liabilities associated with being asleep at the wheel as their auditors, or even complicit in the fraud itself in some cases.

 
joffer said:
While that may or may not be true, I've always thought he was one of the more well-respected CEOs of the big investment banks.  Granted, that's all relative.
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It's also a pretty amazing comeback story - he was ousted as Sandy Weil's heir apparent at Citi/Travelers, and went to head what was then second- or third- tier Banc One in Chicago, pretty quickly elevating their status and position - to the point where their eventual merger with JP Morgan Chase created his path back to the top of the industry.

 
elbowrm said:
It's also a pretty amazing comeback story - he was ousted as Sandy Weil's heir apparent at Citi/Travelers, and went to head what was then second- or third- tier Banc One in Chicago, pretty quickly elevating their status and position - to the point where their eventual merger with JP Morgan Chase created his path back to the top of the industry.
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Can't believe the cajones on that guy...

 
joffer said:
Thx.  I understood that.

ive never understood why MTM accounting is legal.  That was a big part of the whole Enron disaster right?
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Kind of.  Basically, and any cpa's that do this for a living chime in, per gaap you must recognize the value of a derivative at year end (this is hedges including currency, int rates, etc ), or the mtm.  In the small business world it is not a huge deal other than if you are up for renewal you have an actual gain/loss that is due.  This is a true third part contract with a winner and loser at execution meaning if you are out of the money you have to pay.  These folks thought they had a fixed rate loan, which in a perfect world they would have.  Four beers into it so will try to explain better tomorrow.

 
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elbowrm said:
You need MTM accounting in order to make the contracts work.  The posting of collateral is necessary to ensure that someone doesn't get holding the bag at settlement with an insolvent counterparty, and MTM is necessary to keep those amounts in line with the current value of the original contract.

Enron was brought down by old fashioned greed, but facilitated by an elaborate accounting fraud scheme that created sham off balance sheet entities that hid enormous liabilities from its counterparties, while also recognizing large gains on its income statement from what were just temporary MTM swings.  Arthur Andersen was justifiably bankrupted by their liabilities associated with being asleep at the wheel as their auditors, or even complicit in the fraud itself in some cases.
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Ex are Arthur Andersen employee :bagoverhead:

 
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