First, so you keep reading, the title is facetious. This is an article from the examiner about Jamie Dimon’s testimony “courtesy appearance” in front of the Senate Banking Committee. It seems absurd in the first place that a CEO is testifying at a Committee detailing just why exactly the private organization lost so much money. JP Morgan has a little over $2 trillion in capitalization. A fact that Dimon dances around in only complimentary terms, but never states outright. Their tier capitals are all far above government standards (because they got so much credit from the FED, but nevertheless…)
Prima facie.
But, really, there is no difference. You ‘attempt to reduce risk by diversifying your portfolio’. It’s really the same thing. They are just not using the absolute term “elimination.” Using leverage actually would make this worse if one was risk averse. The author might mean to say ‘they trade direct risk for indirect risk in an attempt to make even more money from the initial risk’, no?
Okay.
Okay… If you watch the testimony it becomes painfully apparent that the so called “Senate Banking Committee” is not interested in anything but trying to get Dimon in trouble and to demonize the bank. They want a “them-friendly” sound byte. (I am not one to usually stick up for them, but since Rand is compromising, so will I, eh?) They, over and over, ask the same question…
“Mr. Dimon. Mr. Dimon, can you explain further…umm, the same thing you just spoke at length about? I don’t get it and I won’t get it, but I need you to talk yourself into a stupor so I can look like I am doing my “job.” Now, again, what do you mean by synathentic credit portfolio…? And mind you, do not feel obliged to reveal any proprietary trading strategies. Just what went wrong?”
Okay, why have I not heard Jamie Dimon say these things before? He sounds like Peter Schiff. He doesn’t bash the FED, for pretty transparent reasons, but I’ll say it…he sounds a little bit like an Austrian minded investor.
Let’s cut out the middleman, J.P Morgan 2012!!
