There's nothing quite like being the victim of your own arrogance. The ugly $2 billion loss - which is probably only the beginning since the bank still owns those positions - sits squarely on the head of CEO Jamie Dimon. As we learned during the crisis of 2008 as well as this latest Wall Street failure is that we need much more transparency in the too-big-too-fail world.
Karma, anyone?
Soon after lawmakers finished work on the nation’s new financial regulatory law, a team of JPMorgan Chase lobbyists descended on Washington. Their goal was to obtain special breaks that would allow banks to make big bets in their portfolios, including some of the types of trading that led to the $2 billion loss now rocking the bank.The big problem that we see once again from Wall Street is that they know Washington is a bunch of spineless jellyfish, who talk the talk but won't walk the walk. Wall Street knows that when these big banks get into trouble, the gutless will always be there to bail out the banks. Heads they win, tails they win. It's a fixed game and Wall Street knows it.
Several visits over months by the bank’s well-connected chief executive, Jamie Dimon, and his top aides were aimed at persuading regulators to create a loophole in the law, known as the Volcker Rule. The rule was designed by Congress to limit the very kind of proprietary trading that JPMorgan was seeking.
Even after the official draft of the Volcker Rule regulations was released last October, JPMorgan and other banks continued their full-court press to avoid limits.
