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JPMorgan $2 Billion Loss and Morgenson

by John on 05/13/2012

Good piece – and another perspective – from the New York Times’ Gretchen Morgenson.

Clearly, CEO Jamie Dimon thinks JPMorgan only violated the Dimon Rule, not the Volcker Rule.  Overall, he’s right.  However, if the financial regulatory bill – Dodd-Frank – was passed in its entirety and not held up by Dimon’s and the other banks’ lobbyists, it might have saved JPMorgan shareholders.

Mr. Dimon does not agree with this assessment, judging from his comments in a conference call last Thursday. But it’s an argument made persuasively by Michael Greenberger, a law professor at the University of Maryland and an authority on derivatives. He said that if two still-pending aspects of the Dodd-Frank legislation had been in effect, JPMorgan’s trading position probably wouldn’t have been allowed to grow as large as it did. Even better, the trades might not have been made by the bank at all.

We need to look at this further.  Is this a continuing trend or an outlier?

I am leaning toward continuing trend. 

Your thoughts.

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