Jeremy Hobson: Well in Tampa, Fla., today, there’s a JPMorgan Chase shareholder meeting going on. Not a great time for CEO Jamie Dimon to face shareholders, given the $2 billion trading loss he announced last week.
For more, let’s bring in Juli Niemann, analyst with Smith Moore and Company. She’s with us live, as always, from St. Louis. Good morning, Juli.
Juli Niemann: Good morning, Jeremy.
Hobson: Well, the chief investment officer at JPMorgan has already retired this week after that loss was announced. Do you think Jamie Dimon is at risk at this point?
Niemann: Oh no. Maybe some power-sharing; maybe a personal pay penalty to share good faith to shareholders. His public statements were so properly tuned: outrage, disgust — it was all designed to encourage sympathy, that he was let down by his really trusted lieutenants and heads will roll. But will they pay back the piggy bonuses to JPMorgan’s shareholders? No. But I’ve got a solution: defer those bonuses for three years; give it time to see if those genius moves really work.
Hobson: Defer the bonuses to make sure that people are thinking in the long-term as opposed to the short-term. And Juli, let me ask you the other question — what about new regulation? It seems like there are more calls for new regulation on Wall Street right now as a result of this, but Wall Street firms always do seem to get around that.
Niemann: Oh, this time it’s likely the parts of Dodd-Frank will go through. It needs some revisions that can’t be implemented, but the Volcker Rule definitely is out; it will be going forward. It’s forbidding speculating, trading with depositors’ money and that will go through intact. We need to bring back the old Glass-Steagall Act, which kept banks from doing exactly this. And it kept them safer. We can’t let the banks game the system — so regulation, it’s coming.
Hobson: Juli Niemann, analyst with Smith Moore and Company, thanks as always.
Niemann: You bet.