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The bank, the thief, his president, and their lawyers

Give the guy a break, he’s a huge douchebag.

If you take the current U.S. administration at face value, they have presided over the formation and passing of not one but two pieces of ‘historic’ reform. The Affordable Healthcare Act (AHA) and the Dodd-Frank Financial Reform bill were the key pieces of legislation President Obama both campaigned on and passed during his first year in office. Both were heralded as not just deeply significant, but in their own words ‘historic’ legislative processes. So historic that at the AHA signing ceremony, Vice President Joe Biden apparently forgot he was surrounded by the nation’s media and several hundred microphones, when he leaned in to Obama’s ear to tell him what a “big fucking deal” it was. Whether you agreed with Biden or not, it is too early to quantify how successful the AHA has been, as while it is true that insurance costs have increased since the bill passed, many of the key pieces of that legislation do not come into effect until 2014, so in the interests of fairness we can perhaps save our criticism of that for another day. The same cannot be said for the Dodd-Frank bill, and so it was that last week we all got a pretty decent reminder of what an abject failure that legislation was.

At the time it came as a blessed relief. I had been sat around chain-smoking trying to work out exactly what kind of weird cocktail of drugs it would take for me to view Obama or Romney’s websites’ with anything other than cynicism and disdain when, all of a sudden, a much more interesting story began to unfold. J.P. Morgan Chase are generally viewed within the mainstream media as America’s biggest and therefore best bank, and so when they announced a $2 billion trading loss, the response from within the media was one of disbelief. How could this happen? Surely the bank with so-called financial genius Jamie Dimon at the helm could do no wrong? Well think again. What has been happening in our financial system over the last few years is exactly what would happen if the clowns began running the circus, or perhaps more accurately if the clowns had started running things but then subcontracted their responsibilities to the monkey house in favor of coke and hookers. That may seem unfair, but let me take this opportunity to state unequivocally that I have no problems with circus clowns, monkeys, cocaine or prostitutes.

The immediate knock on effect, of what JPMorgan characterised as an ‘egregious’ error, was a 9% drop their share price, in real terms anywhere between $14-16 billion. I am beginning to think we have forgotten exactly what failure looks like, a view which has been backed up by the coverage from within the financial press. The immediate response from the Financial Times was an article claiming Dimon is in fact a whale of a hedge fund manager and that we’re lucky he was in charge because it could have been much worse. Dimon himself was quick to realize that outside of the bubble he and his colleagues occupy this might not play too well. An interview with Meet the Press was scheduled frantically and during it he generally came across as someone not used to being asked questions, or indeed expected to string coherent sentences together when in polite company. His main line of defense was a perhaps understated “Hey, everybody makes mistakes”, before reverting to his usual “I’m a peacock, captain, you gotta let me fly!” routine.

He has been credited with candor throughout the media; at least he’s being open and honest about it, they say. Well, that depends on who you talk to. Though JPM were quick to float the initial figure of $2bn, there are those who claim the loss could be $3-4bn. The FBI being one of the curious parties, and they made it pretty clear how much they took the Chairman at his word by immediately announcing a full investigation into what actually did happen. Moreover, and contrary to the initial reports coming out of Tuesday’s annual meeting, the shareholders also seemed fairly unconvinced, that is if the three lawsuits filed so far with the US District Court in Manhattan are anything to go by. The plaintiffs are seeking “unspecified monetary damages and a jury trial”, which is certainly an indication Mr. Dimon will be off a few peoples Xmas card list this year.

With all that said, perhaps I am being a little unfair to Mr. Dimon and his industry colleagues. After all it’s not like the entire world economy has crashed within the last eighteen months. JPMorgan never wanted to take the TARP money, though they did, and it’s not like they benefit in any way from borrowing billions of dollars from the US Federal Reserve at a near 0% interest rate. Furthermore it would be somewhat cynical to suggest these two factors had anything to do with their relative success over the last two years. It’s not like a license to print money could benefit a major corporation. I’m not suggesting at all that any real investigation would find Mr. Dimon guilty of possible criminal malfeasance, insider trading, massive fraud and/or corruption. Mainly because any and all of these things appear to be perfectly legal in the US these days, so long as you have a staff of corporate lawyers on retainer. Realistically, it is much more likely that Jamie Dimon will be found guilty of nothing more than the kind of naivety uncommon outside of 1970s pornographic films – “Gee Meester, you mean the bank only works if I take off all my clothes?”, he is after all simply the modern embodiment of your friendly local repair man.

President Obama has not exactly distanced himself from this view. “JPMorgan is one of the best managed banks there is. Jamie Dimon, the head of it, is one of the smartest bankers we got and they still lost $2bn and counting. It’s going to be investigated, but this is why we passed Wall Street reform.” Powerful words indeed, and no suggestion that any further reforms may be on the horizon, which will go a long way to allaying the fears and concerns of the Wall St Journal, whose laughable interview with so-called JPM rivals centered on a discussion about how further regulation would of course be much more worrying than cataclysmic drops in the share price. Apparently the reason we passed Wall St reform was to give the President another opportunity to speak out of both sides of his mouth, as well as offering valuable experience to the lawyers and financial lobbyists brought in to craft the bill behind the all too familiar closed doors of Washington. Quite how all those campaign donations from the financial sector will affect his second term is unclear; it’s not as if this movie has been locked on constant repeat for the last political generation or so. Moreover what is the point of collecting all that cash and getting elected unless you can offer the electorate a vision they should truly fear. People are scared of terrorists sure, but having a bank illegally foreclose on your family home certainly focuses their attention.

The fact of the matter is that this is precisely the kind of thing we should expect to happen. While the figures surrounding this failed trade are up for dispute we should perhaps consider that JPM’s derivatives exposure last clocked somewhere in the region of $90 trillion. For context you should consider that World GDP for the year 2011 was around $65 trillion. For further context you should also consider what JPM were hedging against in this trade, namely the U.S. economy. It is not in their interests for the US to do well, and you have to ask yourselves just how much money these people intend to make the next time they crash the world economy. In the meantime we are witnessing the greatest robbery in the history of theft, presided over by the worst kind of Oxford-cloth, drug-addled, hardcore gamblers and I don’t doubt it may one day make a great film. I have approached Michael Bay and his secretary assures me that once he’s worked out the kinks in his CGI hooker car wash scheme, we’re headed back to Hollywood. Got to retire somehow and we’re clearly not smart enough to make it in financial services. Outside of politics it’s the only way to make an honest living these days, selling people their nightmares back to them. Anyway, it sure has been a while since we were back where we truly belong and I for one welcome abject failure.


James A. Foster is a British freelance journalist, political columnist, and sworn enemy of the corporate owned media. He is also founder and editor of – A tight but loose collection of writers, covering national and global affairs in the fine tradition of Gonzo Journalism. He can be contacted through the website and also followed on twitter @ThisIsAdNauseam

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