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The Art of Rubbing It In

For JP Morgan, pride goeth before the $2 billion trading fall - and schadenfreude from rivals comes after:

A huge portion of Wall Street's banking model is built around the idea of, 'I'm going to bet against my clients.'...and I see that and say, These are my clients! It's my job to make sure my client makes money, and know that I'll be rewarded for it.

That quote comes from Ed Clark, CEO of Toronto-Dominion Bank, or TD Bank, who revels in the description "old-fashioned banker."  He gave an interview to Bloomberg TV's Erik Schatzker in a piece on the risk-management superiority of our Canuck neighbors.

This kind of thing falls under the rubric of what CNN's Lizzie O'Leary sassily identified last week as "Dimonfreude." But it has perhaps a bit less impact when you count the Canadian government's "liquidity support" to their banks - $114 billion at the peak - as a plain old bailout.


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May 14, 2012

No, Mr. Dimon, I Expect You to Die...of Mortification

You might recognize the line above from Goldfinger, in which Bond asks, "Do you expect me to talk?" -- only to get the searing reply, "No, Mr. Bond, I expect you to die."

This would work better as an arch metaphor, here, if there were such a thing as Death by Complex Derivatives. But, c'est la vie.

Talking - and the lack thereof - is likely to be a big subject tomorrow morning, when JP Morgan's shareholder meeting starts in Tampa, Florida.

The words from Jamie Dimon, JP Morgan's CEOs, should be as honeyed as possible. You know things are probably going to be bad when shareholders are girding their loins, which the Wall Street Journal fully expects them to do. And what are they girding for? Why, more official decapitations, of course. The heads set to roll this time - if one influential shareholder has its druthers - belong to Ellen Futter and James Crown, both members of the board of directors.

The shareholder group CtW Investment Group said it will send a letter Monday afternoon to J.P. Morgan's presiding director Lee Raymond and other board members calling for J.P. Morgan to replace James Crown as chairman of the board's Risk Policy Committee, and remove Ellen Futter, a director who is a member of the risk committee, according to the letter, which was reviewed in advance by The Wall Street Journal.

Given the players, perhaps Bond is the wrong hero. Perhaps this could be called The James Crown Affair.

Of course, more transparency is the goal. But only Mr. Dimon - who has admitted his knowledge of the extent of the losses is slim-- knows if he will remain purse-lipped in the face of shareholder questioning.


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May 14, 2012

JP Morgan's Loss: The Explainer

May 11, 2012
How did JP Morgan lose $2 billion on a single bet? Here's some plain English to help understand it.
Posted In: JPMorgan

Hubris, Thy Name is Dimon

May 11, 2012
The well-regarded JP Morgan Chase CEO has been talking big talk about how well the bank managed its risk. But this week, we saw he didn't walk the walk.

Survey: Americans are stressed out

Apr 13, 2012
Consumer Reports polled 1,000 U.S. households and found that more Americans are feeling stressed today than at any time since September 2009.

Why Are Households Still Nervous About Municipal Bonds?

Mar 30, 2012
U.S. households hold half of all municipal bonds issued by cities and states in the U.S. But over the course of the past year, those investors have been backing away. Why?
Posted In: Muni Bonds

The Birth (and Death) of the Moral Age of Wall Street

Mar 27, 2012
Marcy Murninghan's unpublished late 1990s interview with former Goldman Sachs chairman John Whitehead illuminates how he tried to bring a moral sense to banking.
Posted In: Goldman Sachs

The Devil Wears Pinstripes

Mar 14, 2012
A New York Times op-ed by a former Goldman Sachs executive director illuminates the long, slow slide of Wall Street's culture and the divisions within the industry.
Posted In: Bankers, The Devil Wears Prada, Internecine Warfare

Citigroup: Who Are You Calling A Failure?

Mar 14, 2012
Citigroup put up a blog post today disputing that the bank had "failed" the Federal Reserve's stress tests.
Posted In: Citigroup, Banks, Report Cards

Businesses are spending again

Mar 8, 2012
A recent report from the Bureau of Economic Analysis about the health of the economy in the fourth quarter of 2011 shows a 20 percent spike in investment -- a sign that businesses are back to spending, not hoarding, their money.
Posted In: Jobs, Investing, investments

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About this collection

On January 8, 1964, LBJ used his first State of the Union Address to declare an unconditional war on poverty. He launched a legislative onslaught to create programs that enhanced the social safety net, and many of them survive today. But perhaps the most eloquent passage in his speech was this: “Unfortunately, many Americans live on the outskirts of hope--some because of their poverty, and some because of their color, and all too many because of both. Our task is to help replace their despair with opportunity.”