Dimon's in the Rough

See what I did there in the title? With the mixed metaphors and play on words and such? SO clever. Anywwaaayyy, JP Morgan Chase, the formerly venerable white shoe investment banking institution, reported a $2 billion trading loss yesterday afternoon. Not so surprisingly, Jamie Dimon managed to continue to sound like a giant doucher while attempting to show some sort of facsimile of contrition. While admitting to immense risk management failures, he managed to contend that oversight of the banking industry was still a ridiculous idea. Here are two actual quotes (well a quote and a paraphrase) from the same call to analysts:

"There were many errors, sloppiness and bad judgment," Dimon said. "These were grievous mistakes, they were self-inflicted."

 followed by...

Dimon said yesterday that the timing of the trading blunders "plays right into the hands of a bunch of pundits out there" who want a strict proprietary trading ban, the Volker Rule, named for former Federal Reserve Chairman Paul Volcker.

I mean... wow. Only a wanna-be pugnacious solipsist like Jamie Dimon could somehow claim that his firm's catastrophic failure in self-oversight somehow indicates that the Volcker Rule is a bad idea. Listen, I'm no class warrior. While sympathetic to a couple of Occupy Wall Streets complaints (when they enumerated them), I'm not marching for the 99%. But people like Dimon and some of his cohorts need to get their shit together and realize that while such rules will definitely be bad for their bottom line, it'll probably be good for the health of the world economy as a whole. While this is really for another, longer, post I've been thinking about for awhile... many commentators seem reluctant to assert is that the Volcker Rule, formerly known as the Glass-Steagall Act of 1933, worked pretty well for 6 decades. Enacted in the turmoil of the Great Depression, Glass-Steagall, among other things, separate commercial banking from investment banking. Lo and behold, there were no serious shocks to the banking system anywhere approaching the same scale of the Great Depression. Our current Great Recession then occurs after it was essentially repealed in 1999 (Good call Billy) and the Volcker Rule hopes to re-institute a weaker version. Now, clearly one cannot directly correlate the repeal of Glass-Steagall and the Great Recession, but why not bring back a rule that worked so well for over half a century? I've not really heard any compelling reasons, that hold any water, from folks like JD... who's firm bears little resemblance to the old JP Morgan & Co. that once ruled Wall Street (read this fantastic book for more. Seriously, Ron Chernow is the MAN).

To make a long story not any longer than the above, I hope Jamie stops spewing BS until the time he can put forth a reasonable argument for why the provisions of the Dodd Frank Act, including the Volcker Rule, would be bad for anyone aside from him, his cohorts, and their respective bottom lines.