The Fourteenth Banker Blog

May 5, 2010

JP Morgan Unmasked

Filed under: Running Commentary — thefourteenthbanker @ 4:18 AM

JPMorgan Chase Memo Sneers At ‘Ignorant’ Senators, ‘Time For The Grownups To Step In’.

While the bank apologized this afternoon for this rant by its Chief Economist. The hubris of such insulting language at a critical time in the regulation debate is proof that Too Big to Fail is Too Big to Manage.   Glassman appears to office in New York, so it is not too far a leap to assume that he is well connected in the firm and that his attitude reflects the attitude of others in the Exec ranks. Also in the report is rosy language on the economy at a time when many are questioning the quality of the growth seen heretofore and certainly the strength of the recovery into the second half of 2010.  Goldman has been a convenient distraction for the other bigs, but many more of these stumbling comments and the millions spent on lobbyists may be written off as money down a rat hole.

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6 Comments »

  1. Calling someone ignorant in public is not a good practise but beyond that, this letter makes a fair share of good points and is mostly reasonable.
    He also writes: “No institution should be too big to fail. Public funds should not be relied on to resolve failing financial institutions.” 🙂

    Comment by Kitty — May 5, 2010 @ 8:09 AM | Reply

  2. “senators displayed “an unnerving ignorance of fundamental principles of market economics”

    unfortunately is a fair assessment, IMO. The ones who did understand – the Phil Gramms of the world, put us in this soup, and the ones there now, with a few exceptions, appear to be clueless. So which is scarier? Legislation and deregulation by the ignorant or by the malevolent?

    On the other hand, I wonder if he meant the kinds of market economics we learned back in the day, in Econ. 101, or the new, super-duper, whiz-bang kind practiced over the past 20 years?

    Where are the statesmen?

    Comment by Sandi — May 5, 2010 @ 4:05 PM | Reply

  3. Was just reading a review of a book called “Every Man Dies Alone”, based on a true-life couple in Berlin during the war, who fought their own little subversion against the Reich, until they were caught and beheaded. But it speaks to the surreal way power can not only corrupt but turn entire worlds upside down and inside out, and how powerless we feel to stop them. —-
    “Quangel is a taciturn man, but a moment comes, at his grotesque trial, when he can no longer contain himself: “It was then that Quangel laughed for the first time since his arrest, the first time in a very long time. He laughed with wholehearted gusto. The preposterous comedy of this gang of criminals branding everyone else as war criminals was suddenly too much for him to take.”

    Fallada catches the intersection of monstrous crime and “preposterous comedy” in power’s intoxication. The confrontation of Inspector Escherich and Quangel is unforgettable. Escherich, having got his prey, is contemptuous of this “gnat” fighting an “elephant:”: “What did you expect anyway, Quangel? You, an ordinary worker, taking on the Führer, who is backed by the Party, the Wehrmacht, the SS, the SA?”

    For some reason, it made me think of this different power we’ve been discussing, and the sense of other worldliness it seems to give those who abuse it. Something about the twistedness of both applications struck me.

    Comment by Sandi — May 5, 2010 @ 5:03 PM | Reply

  4. Arrogance permeates every word; it is used as a weapon to defend their position. The detachment from reality is complete – it enables unlimited perpetuation of the corrupt position. In fact, it appears that the “integrity” they practice is applied in defense of the indefensible. The only reality is the one they created, and nothing’s gonna take that away!

    I’m intrigued by the tone of this message. You can almost feel the guy’s breath in your face. It’s really a first-class emotional outburst.

    Not an ounce of compassion. Not a scrap of regret. No responsibility for any of it.

    How these guys became monsters is not nearly as important/significant as how is it that We The People tolerate it.

    Comment by Susan Marie — May 5, 2010 @ 5:23 PM | Reply

    • Susan Marie, I’m convinced “We the People” tolerate it because we are intellectually incurious as a people, and because to the extent we (present company excluded) are paying attention, it’s to all the wrong people – (Rush, Glenn, Larry Kudlow, Jim Cramer, etc.)
      Interestingly, I heard yesterday that before Henry Luce died, “Time” had begun to fade, but his more recent baby, “People”, was going gangbusters. And continues to this day.

      ‘Nuff said.

      Comment by Sandi — May 5, 2010 @ 5:48 PM | Reply

    • Jimmie Cayne said, in testimony today, when asked about “window dressing” for quarterly reports, that he didn’t like that term because it implied skulduggery (if the shoe fits……….), then went on to say that shareholders demand quarter to quarter share price increases and increased profits, so it’s basically all their fault. Something like what the priest told my friend, after her husband beat her into an ER -“If you had been a better wife to him, he wouldn’t have had to beat you.” More blame the victim here.

      During the Nixon years (and more recently the Bush years), I worried about the executive branch becoming too powerful. Politicians want money for the political power it can buy, whereas financiers seem to want money to buy political cover in order to be unfettered to make more money. One group wants to rule the world, the other wants to own it. Maybe splitting hairs, but I think there is a difference here, and if Simon’s right about this last 30 years leading to a bloodless coup, what will that mean on the ground for you and me?

      Comment by Sandi — May 5, 2010 @ 11:50 PM | Reply


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