JPMorgan Chase CEO Jamie Dimon believes forces are arrayed against him and the investment bank he oversees. As Dimon puts it, JPM’s $2 billion trading loss, triggered by Bruno Michel Iksil’s credit-default swaps (the same instruments that crashed the economy in 2008), “plays right into the hands of a whole bunch of pundits out there.”
Not pundits, jackass, just people seriously nervous about whacky financial instruments upending the economy yet again.
Dimon is set to appear before the U.S. Senate Banking Committee on June 13. Known as a skilled Capitol Hill operator, Dimon should be right at home. But instead of meeting behind closed doors with those politicians lubricated with campaign donations, Dimon will be sitting in a very public hot seat.
It’s all theater, though. Dimon will endure some handwringing from Democratic Senators and maybe a few from the GOP aisle, but things will eventually return to normal with Dimon retreating to the more private (lobbying/bribery) meetings he prefers. These meetings, not surprisingly, were the ones that watered down the Dodd-Frank bill, specifically the Volcker Rule provision, which allowed Iksil to hedge with credit-default swaps over in London.
Ironically, if Dimon hadn’t lobbied for a neutered Volcker Rule, JPM wouldn’t be experiencing a $2 billion trading loss right now.