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Breakfast with Jamie [Dimon]

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Reprinted with permission from EconomicPolicyJournal.com

Want to front-run the Fed? If you're Obama's favorite banker, Jamie Dimon, president of JP Morgan Chase, there's no need to parse FOMC statements or obscure speeches by Fed governors. No need to analyze hundreds of Treasury securities to make an educated guess as to just which ones Brian Sack (of the NY Fed) will buy any given week. Even hiring expert networks staffed with ex-Fed officials is unnecessary.

 

No, if you're Jamie Dimon, you go straight to the top and break bread with William Dudley, ex-Goldmanite president of the NY Fed. It just so happened that Dimon dined thrice with Dudleyover the January 2009 to September 2010 period (plus one conference call), according to a document released by the NY Fed today. And perhaps only coincidentally, these encounters all occurred surrounding major changes in announced Fed policy.
 
The first meeting took place on February 18, 2009, only weeks after Mr. Dudley's ascension to the bank's presidency on January 27, 2009.

06:30 PM - 08:00 PM HOLD for dinner with Jamie Dimon Location: TBD in midtown

Exactly one month later, on March 18, 2009, the Federal Open Market Committee, under Chairman Bernanke's aegis, announced:

To provide greater support to mortgage lending and housing markets, the Committee decided today to increase the size of the Federal Reserve’s balance sheet further by purchasing up to an additional $750 billion of agency mortgage-backed securities, bringing its total purchases of these securities to up to $1.25 trillion this year, and to increase its purchases of agency debt this year by up to $100 billion to a total of up to $200 billion. Moreover, to help improve conditions in private credit markets, the Committee decided to purchase up to $300 billion of longer-term Treasury securities over the next six months.

This was the first round of quantitative easing (so-called QE1), which would eventually become a $1.75 billion trillion bank largess program. Wouldn't it have been helpful to speak with the NY Fed's top official (who, incidentally, was previously in charge of the Fed's buying and selling)? Or even get in on the decision making?
 
The second meeting was on April 22, 2009, just shy of one month after the commencement of large scale Treasury purchases. As it's purpose [putatively] was only to see how the front runnin's been going, it was merely a telephone call:

09:00 AM - 09:15 AM Conference Call with Bill Dudley and Jamie Dimon, JPMorgan Chase Location : Bill Dudley's Office

The third official meeting was once again more intimate and took place on January 25, 2010, two days before the FOMC would announce the exact date when the MBS and Agency purchases would terminate:

07:30 AM - 08:30 AM  Breakfast with Jamie Dimon, JPMorgan Chase Location : 270 Park Avenue 49th Floor Dining Room (Stop off at Reception Area, then proceed to 49th Floor)

That January 27, 2010 FOMC announcement also signaled the termination of most of the lending programs the Fed had initiated in the wake of the Lehman collapse:

In light of improved functioning of financial markets, the Federal Reserve will be closing the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility, the Commercial Paper Funding Facility, the Primary Dealer Credit Facility, and the Term Securities Lending Facility on February 1, as previously announced. In addition, the temporary liquidity swap arrangements between the Federal Reserve and other central banks will expire on February 1. The Federal Reserve is in the process of winding down its Term Auction Facility: $50 billion in 28-day credit will be offered on February 8 and $25 billion in 28-day credit will be offered at the final auction on March 8. The anticipated expiration dates for the Term Asset-Backed Securities Loan Facility remain set at June 30 for loans backed by new-issue commercial mortgage-backed securities and March 31 for loans backed by all other types of collateral. The Federal Reserve is prepared to modify these plans if necessary to support financial stability and economic growth.

Thanks for the heads up Dudley! [Who, buy the way, is a permanent voting member of the FOMC by virtue of being president of the NY Fed.]
 
The next meeting between the two would be on July 14, 2010...
 

 

 

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Thu, 12/30/2010 - 00:49 | 837223 TruthInSunshine
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Just a correction: The article says QE1 "would eventually become a $1.75 billion bank largess program."

I know that the author meant QE1 would eventually become a $1.75 trillion bank largess program.

Carry on.

Thu, 12/30/2010 - 08:06 | 837376 EB
EB's picture

Thanks...corrected.

Thu, 12/30/2010 - 00:39 | 837215 David99
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Pilbara faces cyclone risk December 30, 2010 - 2:23PM

A tropical depression over Australia could develop into a cyclone over the next few days and bear down on offshore oil and gas installations, and iron ore shipping zones, Australia's Bureau of Meteorology said today.

Gale-force winds may develop along the Pilbara coast in Western Australia by Saturday as the storm makes its way out to sea, though flooding was not expected due to the storm's steady movement, the bureau said in a warning notice.

BHP Billiton, Rio Tinto and Fortescue Metals export hundreds of millions of tonnes of iron ore mined annually from inland Pilbara deposits via coastal terminals at Port Hedland, Dampier and Cape Lambert.

Also Cockatoo Coal ceases operations as mine flooded

Be Careful with longs of miners

Wed, 12/29/2010 - 22:05 | 837082 essence
essence's picture

Why the hell is the CEO of the 2nd most prominent bank in the world
(sorry jamie... GS rules) sitting on the board of directors of the NY federal
reserve branch (for those that don't know...this branch is the one that wields
far more power & influence the other 11...consider it the head of the hydra).

Talk about conflict of interest.

The US is throughly corrupt.
It's markets are corrupt.

I can't directly fight that, but I sure as hell can ensure as little as possible
of my net worth support it.

 

 

 

Wed, 12/29/2010 - 21:46 | 837057 LMAOLORI
LMAOLORI's picture

Economic Policy Journal is among my favorites I read it daily as I do ZeroHedge it was from EPJ that I learned Jamie was Obama's favorite banker.  I see the banker's are now feigning outrage over Obama's remarks and Jamie had to set the President straight...

Obama and Wall St.: Still Venus and Mars 

“Jamie Dimon, chairman and chief executive officer of JPMorgan Chase and a supporter of Obama in 2008, has been among the more outspoken critics of the White House’s anti-Wall Street rhetoric. “It’s harmful, it unfair and it leads to bad policy,” Dimon recently told The New York Times Magazine, adding that he told Obama: Former “President [Abraham] Lincoln could have denigrated all sSoutherners. He didn’t.”

http://dyn.politico.com/printstory.cfm?uuid=2A8140B2-C586-FED2-2F5B406630C0DD88

(does Obama or the lamestream news really think we buy this propaganda that the bankers are mad at him? Jamie was just over visiting him on 12/8)

 

Barack’s Wall Street Problem is Now America’s

http://www.noquarterusa.net/blog/2008/09/21/baracks-wall-street-problem-is-now-americas/

JPMorgan CEO Jamie Dimon Donates Serious Cash to Democrats

http://www.opensecrets.org/news/2009/07/jpmorgan-ceo-jamie-dimon-donat.html

 

Obama, Dimon Met at White House to Talk Economy, Official Says
December 08, 2010

http://www.businessweek.com/news/2010-12-08/obama-dimon-met-at-white-house-to-talk-economy-official-says.html

The great bank heist of 2010
Commentary: Wall Street wins, Main Street pays — again

http://www.marketwatch.com/story/wall-street-wins-main-street-pays-again-2010-12-21?pagenumber=2

 

 

Wed, 12/29/2010 - 18:25 | 836728 Babalooee
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Go long waiters! Talk about the chance of making big money off tips

Wed, 12/29/2010 - 18:11 | 836706 Quinvarius
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Dimon is a talentless arrogant prick.  If he had to operate under the same rues of the road as everyone else, he would be eating out of my garbage bucket every night.

Wed, 12/29/2010 - 17:12 | 836573 lookma
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Of course Jamie Dimon meets with Dudley, Dimon is a class A director of the NYFRB.

No need to concoct some shady dinner/policy conspiracy theory, its a lot more direct and out in the open than you allude:

http://www.ny.frb.org/aboutthefed/org_nydirectors.html

Wed, 12/29/2010 - 17:28 | 836629 ajax
ajax's picture

 

Richard Carrion? The IOC for chrissakes? Puerto Rico for chrissakes?

Wed, 12/29/2010 - 17:18 | 836595 Tyler Durden
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Is Jan Hatzius also a Class A director? Dudley had dinner with him on March 11 and April 6, 2009... And this is only through pages 50.

Wed, 12/29/2010 - 19:12 | 836811 EB
EB's picture

Nice.

Mar 11 09:  

06:00 PM - 07:00 PM Informal meeting with Jan Hatzius (GS) Location : Pound & Pence

Apr 6 09:

05:30 PM - 06:30 PM Informal meeting with Jan Hatzius Location : Pound and Pence

Wed, 12/29/2010 - 17:57 | 836683 lookma
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double

 

Wed, 12/29/2010 - 17:57 | 836682 lookma
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I don't dispute his thesis.  As we all know, Class A directors are appointed by the Banks to protects the banks' interests.

I am pointing out the supporting evidence is more out in the open than he alludes, in part by pointing out Dudley already answers to Dimon as Dimon is a Class A director of the NYFRB.

One doesn't need to go through appointment books to establish this relationship.

 

Wed, 12/29/2010 - 18:01 | 836692 lookma
lookma's picture

A more explicit role specified by the Federal Reserve Act calls for Reserve Bank directors to establish their District's discount rate at least once every 14 days. Directors establish this rate at each regularly scheduled board meeting every two weeks. At the New York Fed, they do so in person on the third Thursday each month; they meet by conference call on the first Thursday and, should there be one, the fifth Thursday.

 

The discount rate the directors designate, subject to Board approval, is what financial institutions pay when borrowing from the Federal Reserve. These borrowings, called "adjustment credit," help banks meet temporary liquidity needs arising from short-term fluctuations in their balance sheets.

http://www.ny.frb.org/aboutthefed/fedpoint/fed10.html

 

I wonder who appointed Dudley? oh yeah:

Directors influence monetary policy by setting their District's discount rate and by appointing the Bank's president, who, in turn, sits on the Federal Open Market Committee.

 

http://www.ny.frb.org/aboutthefed/fedpoint/fed10.html


Wed, 12/29/2010 - 18:10 | 836707 lookma
lookma's picture

William C. Dudley became the 10th president and chief executive officer of the Federal Reserve Bank of New York on January 27, 2009.

http://www.ny.frb.org/aboutthefed/orgchart/dudley.html

In 2007, Dimon was elected to a three-year term as a class A director of the Federal Reserve Bank of New York. 

Hmm, looks like Jamie had a hand in appointing Dudley.   Hmm indeed.

 

Wed, 12/29/2010 - 19:04 | 836793 EB
EB's picture

duplicate

Wed, 12/29/2010 - 19:03 | 836792 EB
EB's picture

 

@lookma: I'm well aware of the regular meetings between Fed branch directors and Fed staff, but many are not, so it's worth accentuating.  The off-the-record nature of breakfast and dinner meetings, as opposed to regularly scheduled conference calls that would at least have an official note-taker present suggests (at least to me) these meetings were when the real dealing went down.  Had not connected that Dimon had a part in nominating Dudley, so thanks for that.

 

Wed, 12/29/2010 - 17:55 | 836681 dark pools of soros
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do we really think that 'dinner' in this day and age means anything but photo ops?  and don't they all meet back at their masters of the universe lair at night?  

Wed, 12/29/2010 - 20:16 | 836916 Fred Hayek
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I'm sort of picturing the Secret Society of Super Villains hideout from the old DC comics with Jamie Dimon chatting up Gorilla Grodd, Sinestro and Lex Luthor.

Wed, 12/29/2010 - 16:55 | 836518 MrBoompi
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You can't call it casino capitalism when there are no losing bets.

Wed, 12/29/2010 - 17:13 | 836580 Boilermaker
Boilermaker's picture

The 'house', the TBTF cocksuckers, never lose...you should know how casino's work by now.

Wed, 12/29/2010 - 16:48 | 836495 Geoff-UK
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What happened to all the guillotines from the French revolution?  Anyone got a key to that warehouse and a few Dustbusters?

Wed, 12/29/2010 - 17:24 | 836617 ajax
ajax's picture

 

It's a brave new world, a do-it-yourself world guillotine-wise:

http://www.rebelart.net/diary/sokkomb-die-ikea-guillotine/001708/

Who would have thought? From quiet Sweden?

Wed, 12/29/2010 - 16:51 | 836501 goldmiddelfinger
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They put a stolen Egyptian obelisk on the spot. Fitting.

Wed, 12/29/2010 - 16:28 | 836421 Pullmyfinger
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Well, at least someone is tracking this stuff, but what's a few more drops in a sea of criminality? Nothing short of Armageddon is going to make much difference at this juncture.

Wed, 12/29/2010 - 16:47 | 836489 EB
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You never know what will gain traction.  The fingers of instability continue to multiply. 

Wed, 12/29/2010 - 16:35 | 836449 goldmiddelfinger
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Shoplifting a pack of gum gets you 30 days with a roadside trash bag

Wed, 12/29/2010 - 16:42 | 836475 Pullmyfinger
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I wonder how many days Jamie will get? I'd love to see that man with a trashbag in the ditch.

Wed, 12/29/2010 - 16:18 | 836384 goldmiddelfinger
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And no one's in jail for all the previous thievery

Wed, 12/29/2010 - 16:49 | 836496 unwashedmass
unwashedmass's picture

our government is so corrupt now that...i mean, who exactly isn't on the payroll who is going to challenge these guys? we ought to be grateful, i'm sure in their minds, that they are even bothering with maintaining the charade of free markets and a non-rigged stock and bond markets....

we are completely and totally toast. i mean, this has penetrated the dim misty regions of even ashton kutcher's mind.......

Wed, 12/29/2010 - 18:58 | 836780 Careless Whisper
Careless Whisper's picture

why is this newsworthy? the federal reserve bank works for the global banks. this is not a secret.

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