Tempest In A Towering Inferno: JPM's Head CIO Trader: "Things Like This, It's Like The Twin Towers Falling Down"
On April 13, 2012 Jamie Dimon described the situation at the CIO as massively overblown and said it was just "a tempest in a teapot." A few days later, the head CIO trader, Javier Martin-Artajo, when speaking to the former JPM Chief Investment Officer, Ina Drew, had a less sanguine description: "and, and, you know, things like this, it's like the twin towers falling down." (highlighted below) Let's agree to disagree and just compromise on "tempest in a towering inferno." But that's not the point of this post. The point is in the same transcript we learn that it was none other than Ina Drew who told Artejo that "it would be helpful, if appropriate, to get, to start getting a little bit of that mark back" and instructed the Spaniard to go ahead and "tweak" the daily P&L on the CIO portfolio by "an extra basis point." Nothing like your supervisor telling you to fudge marks just to demonstrate that the "curve is starting to trend."
For those confused what this refers to, we suggest rereading "The Second Act Of The JPM CIO Fiasco Has Arrived - Mismarking Hundreds Of Billions In Credit Default Swaps" in which we explained precisely how JPM was fudging the marks on hundreds of billions in securities just to show a smaller top line hit in the days after the London Whale was exposed to the entire world leading to a LTCM-style run on the JPM banks by every hedge fund trader in the world.
Needless to say, if any of the above had been revealed about any other firm, not JPMorgan, they would be barred and precluded from doing any finance-related business in perpetuity.
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