What Jamie Dimon Really Said: The CIA's Take

Tyler Durden's picture

The last time the body language (and ex-intelligence) experts from Business Intelligence Advisors appeared on these pages, their target was Ben Bernanke, and specifically his first ever post-FOMC press conference. This time around, BIA has chosen the analyze what has been left unsaid by none other than the head of JP Morgan in the context of his $2 billion (and soon to be far larger) loss which is still sending shockwaves around the financial world. As a reminder, "Using techniques developed at the Central Intelligence Agency, BIA analysts pore over management communications for answers that are evasive, incomplete, overly specific or defensive, potentially signaling anything from discomfort with certain subjects,  purposeful obfuscation, or a lack of knowledge." So what would the CIA conclude if they were cross-examining Jamie Dimon?

BIA Between the Lines: Risk? Forget About It: Jamie Dimon, Chairman & CEO, JPMorgan Chase & Co.

JPM’s European exposure is likely riskier than Mr. Dimon would like investors to believe.

Mr. Dimon is asked several questions about JPM’s exposure to Europe. While he provides and quantifies the company’s amount of exposure, his responses consistently reflect efforts to downplay the level of risk associated with that exposure, suggesting that the firm’s risk profile may be more aggressive than he would like to admit.

Specifically, when Mr. Dimon is asked what JPM’s exposure is to troubled nations, he answers it is about $15 billion net of collateral and ultimately acknowledges that the company could lose $5 billion. But Mr. Dimon is also quick to state that “we stress it,” “not because we’re taking a bet,” but they are “trying to manage exposure” in order to minimize concern about the level of risk associated with that exposure. This language, however, belies a sense that the company is taking a “bet” that they are “trying” to manage, suggesting that JPM may be taking on more risk than Mr. Dimon wants to admit. Further, Mr. Dimon states that “I’m not going to feel terrible” should the worst happen. This is likely a preemptive effort to downplay the severity of the financial impact should some countries default, suggesting that Mr. Dimon has concerns that losing money in Europe is more of a possibility than he would like investors to believe.

Further, when asked if it is possible to be completely sure that hedges with counterparties are truly effective, Mr. Dimon does not answer the question. He instead minimizes concern by explaining that “a lot” of the collateral is cash and that collateral that is not cash is not Italian or Spanish sovereign debt. These qualifications, however, suggest that there may be some portion of collateral backing these hedges may not be as effective as Mr. Dimon would like investors to believe.

More significantly, however, Mr. DImon emphasizes that “we know the exposure to every single counter party.” This statement is meant to assure investors that JPM is aware of their level of risk, but falls short of assuring that the level of risk is appropriate. Further, Mr. Dimon casually acknowledges that “yeah something could go wrong” but not “terribly wrong” in an effort to downplay the severity of both the level of risk, and the potential impact of default associated with JPM’s European exposure. This suggests that the potential for losses is more significant and tangible than he attempts to portray.

JPM may be increasing their European exposure more aggressively than implied.

When asked about the potential for buying assets and businesses from troubled European banks, Mr. Dimon begins his response by emphasizing, for the second time during the interview, that “First of all we really want Europe to recover.” While this statement is meant to be supportive of European banks, it also represents a potential “truth-in-the-lie” -- literally suggesting that JPM has a strong, specific interest in seeing the crisis resolved. This takes on more significance when Mr. Dimon’s acknowledges that JPM has purchased assets, but attempts to downplay the extent to which the company has done so by qualifying that there are “certain” assets and divisions, “some” that they have bought, “some” they have made bids on and did not get and “some” they are still evaluating. This effort to minimize JPM’s activity in seeking out and acquiring these assets raises questions about how much additional European exposure JPM has taken on in recent months and about the level of risk associated with that exposure.

Volcker rule may require JPM to significantly change their proprietary trading strategies and risk profile.

Mr. Dimon is asked if regulations will compel JPM to enter new businesses or cause them to exit others, Mr. Dimon tries to give the impression that JPM’s business lines and corporate structure will not change as a result of new regulations. However, his qualification that he doesn’t see “a lot” of change indicates he anticipates some change, and his emphasis that the “fundamental” jobs of a bank will remain the same suggest he likely anticipates more change than he implies. With this as a backdrop, Mr. Dimon’s response to a question about the Volcker rule is notable, particularly since the JPM’s proprietary trading function is in flux.

When asked more specifically about what the company will have to do when the Volcker rule is implemented and what the impact on the business will be, Mr. Dimon doesn’t fully address either question. Instead, he uses the opportunity to minimize the significance of, but also signal his concerns about, the impact of the rule on the business, a mixed message that indicates the consequences of this legislation are greater in magnitude than Mr. Dimon attempts to portray.

First, Mr. Dimon characterizes lower spreads as good for investors, as a natural byproduct of an efficient market and as nothing unusual. This is likely an attempt to minimize concern about the potential negative impact of lower spreads on the compensation in the trading business, but could also be an attempt to give the appearance of a balanced and fair position on the rule. Regardless, these statements signal that Mr. Dimon anticipates that implementing the rule will negatively impact traders’ incomes.

More significantly, Mr. Dimon then turns to complain about the government’s desire to regulate the level of risk associated with proprietary trading. His statement, “if you want to be a trader, you’re gonna have to have a lawyer and psychiatrist sitting next to you to determine your intent every time you did something,” is an attempt to cast such regulation as unduly burdensome, but is also reflective of an effort to discredit the rule by portraying it as ridiculous. This type of “attack” signals that the topic is a threat, suggesting that Mr. Dimon has significant concerns about the effects of the Volcker rule on JPM’s trading strategies. He also states that liquidity is good for investors, and tries to convince listeners that “unions, pensions, widows, retirees [and the] military” don’t want liquidity reduced in the market. By aligning himself with the  average American, Mr. Dimon is attempting to dismiss the need for regulation and create a “halo” around current trading practices, a psychological mindset that likely suggests he believes the level of risk taken to date may be higher than most observers would like to see. This effort to convince listeners that there is no need for regulatory oversight of proprietary trading suggests that Mr. Dimon has significant concerns that the Volcker rule could have a significant impact on the company’s trading strategies, operations and ultimately the risk profile of the business.

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The Alarmist's picture

Gee, he could do a swap with John Taylor, since they both seem to worry a lot about Europe.

Colombian Gringo's picture

What a lying sack of shit! Dimon is a great example of what is wrong with Crony Capitalism, USA Style.

 

This criminal needs to spend time in Rikkers, where he can be re-educated. Between Bubba, Sambo and Jose, I am sure they can give him a new identity, starting with a new name: Bitch.

Colombian Gringo's picture

Postscript, I would pay these guys to do him real hard, in the same way that Silver and Gold investors were and are ratfucked by JPM.  The hunter becomes the hunted, yeah I love it already....

El Oregonian's picture

Which doesn't seem right is the fact that J.P. Morgan is a TBTF bank. All he had to do is get Helicopter Ben to dump Benny Bucks until the Morgue was made whole with no one none the wiser.

It just doesn't make sense... Unless, this was planned... HMMM?

tenpanhandle's picture

All things human eventually reach a limit.

theTribster's picture

Yeah, I agree with your thinking that maybe it was planned. They are involved in so many criminal activities already why bother to come clean on the trade? A few billion dollars is nothing to the Fed at this point, its a rounding error on a rounding error! I thought the exact same thing - this must be planned for some reason, I mean the guy is a Director of the NY Fed!

Maybe Jamie pissed on the wrong somebodies shoes and now he will become the sacrificial scapegoat for the banking industry? Just think of how much they can pile on if that was in fact the case, wow! Prison would be the ultimate sacrifice, but he would end up in a nice prison afterall and not a place like Rikkers where he belongs. White collar criminal my ass.

I decided to short JPM anyway, got in two days after the loss event was released. My hesitation was thinking "how could Jamie Dimon get screwed?" but then it became obvious this was bad so I jumped on. Happy so far with a distant stop if they change direction on me, I can get out and still make some cash. They will have to swing the price pretty far to shake me out and I think it is going much, much lower now that its obvious this trade is MUCH bigger than he said originally - I knew that as most people did.

Thanks to ZeroHedge for supplying me with much of the information needed to make that decision. I hate Jamie as well but I didn't want this trade to be based on hatred and the prayer that it would get worse, even though in this case and so far my instincts were right on. But again, thanks to ZeroHedge for opening my eyes into the world of JPMorgan and the other TBTF banks! Looks like I have to make a donation now -:)

macholatte's picture

It wasn't planned. Dimon and cronies are a bunch of egocentric fuck-ups who have a smart ass answer for everything.  Banks aren't supposed to be traders! That's why they're called banks and not brokers or dealers or hedge funds. So the term bank as it applies to JPM (and others) is a subterfuge.

Break 'em up into a dozen pieces!  That's the only cure for this shit.

short-swap's picture

In response to the somewhat rhetorical question posed in your second paragraph: perhaps jumping the gun on the stress-test results 6-8 weeks ago stirred the pot a bit too much and this is the reactionary splash on those finely-pressed pleats.

 

Or it's just Act XIII.

Ranger4564's picture

agreed.

this was clearly planned and the end game is? ... they want to bankrupt as many investors and savers as possible and they want to destabilize the banking system so we're fucked.  the present revelation is so they can con the sleepy peeps into believing this 'accident' cascaded to create the much larger catastrophe which is coming this summer, in line with defaulting nations, horrendous employment / consumption data, and no centralbank assistance.  this is the precipice of the planned collapse... everything upto now has just been psychological preparations for the bigcon... thatthe collapse was simply unavoidable... dumb luck,human error.

the problem with that excuse (last sentence) is that we are not that stupid so it's near impossible to accept that they are. they're just more evil and therefore more devious than us.

malikai's picture

I must be the only one. Personally, I'd like to shake his hand for the fine work his firm has done for silver investors. I for one, greatly appreciate these prices. I'd hate to have to pay market for it or gold right now.

Strike Back's picture

Seconded.  Yeah, I've broken through.

Manthong's picture

“I’m not going to feel terrible” should the worst happen

Thought bubble over head:  “Hell, no I won’t feel terrible.. After it all blows up, I will be sipping champagne on the beach of my island getaway counting the hundreds of millions in gold that I stashed away with the money I stole from you idiots.”

AlaricBalth's picture

How to tell if Jamie Dimon is lying?
Answer: His mouth is moving and sound is coming out.

Now where is my $50,000 consulting fee.

caconhma's picture

Bill Clinton and the Congress destroyed America both politically, economically, and morally.

Back in 1930s, the Congress had guts to do something to protect America against Banking Mafia by passing the Glass-Steagall act separating commercial and Zionist mafia run "investment"-gambling banks.

As soon as the Glass-Steagall act has been repealed, it was just a matter of time before America would be destroyed. American was economically, financially, and legally subverted. This started an irreversible process of destroying America.

 

malikai's picture

That irreversible process began at least as far back as 1913, but some may argue it began in the Ghettos of Germany with the arrival of a certain Rothschild clan. Nevertheless, Clinton was just a puppet. Like all the rest since at least Kennedy, with various puppets before him.

Ranger4564's picture

i'm with you, the cesspool is much deeper and contains many more shitheads and scumbags.  eeww. ;-)

OpenThePodBayDoorHAL's picture

And Phil Gramm (R. Texas) had nothing to do with it? And his wife Wendy, the chair of the CFTC?

macholatte's picture

If you really, really want to get technical, nearly everyone in the Congress (the Gang of 535) voted in favor of the repeal (90 Senate & 362 House). Byron Dorgan was against it but nobody would listen to him. That piece of shit Robert Rubin had Greenspan the Fool sucking his dick while Rubin was on Citi's payroll and he got $100M when he left the Treasury. Now that, ladies and gentlemen, was a world class bribe.

 

Gramm–Leach–Bliley Act  http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act

 

 

 

RSDallas's picture

Stop with the Zionist bullshit.

ISEEIT's picture

Jamie seems to be making the same bet that Corzine was in. The fact that these guys are so cocksure and yet getting choked is actually a good sign. It (maybe) shows that a 'fix' is only a maybe, rather than a sure thing?

theTribster's picture

Major great find there. He was also interviewed by Max Kaiser at PressTV (On the Edge is the show). He has it figured out for sure, if people would listen to him they'd shit their pants and the grab he pitchforks and torches and head over to Blythe's place for a visit - Jamie as well.

Funny becuase she was a nerdy hoon when she came up with CDS in Boca Raton Florida, she has since changed considerably - funny what money can do. Of course, she sold her soul to the devil and doesn't even realize it.

We should probably feel sorry for her given then she'll be burning in hell for eternity [/sarc off]. Can we use the 'C' word? Women hate that word (don't blame 'em) so its appropriate to use it on Blyth the C

tenpanhandle's picture

speaking of these two weasels together brings back my old sentiments about the about the whole MF Global mess. In this day of paper money measurements in trillions and quadrillions of dollars, why did not JPM just give back the paltry seeming 1.2 billion $ to the rightful owners instead of keeping it?  And why is this new  2 to 3 billion dollar loss something that couldn't be just papered over or swept under the rug?  It is obvious, especially after this new blow-up in their faces that the situation is very dire within the Morgue and therefore within all the rest who follow (take their cue from the actions of the Morgue).

These particular amounts of money must represent some of the scant real collateral held by the bank, and, therefore, are very very meaningful.  At the leverage rates involved, every billion in underlying assets, properly priced (as real customer funds are) represents, lets say, 40 to 100 billion in chips on the world wide craps table.

So, for every 1 billion (properly priced assets) acknowleged as loss, perhaps 40 to 100 billion is being swept under the rug or papered over. Perhaps the molehills are becoming mountains.

While I,m on this subject, I,d like to throw the recent face book IPO into the mix.  The IPO created a hundred billion $ new (though imaginary) leveragable wealth for the system.  With standard leverage rates, this probably represents a big cortizone shot into Atlas' aching shoulders.  However, considering that "Atlas" has been overly injected these past years, I believe it will do more damage than good - good meaning "aiding the miscreantes (Sorry MissCreant).

To continue my digression, Suckerberg and the Thief in Chief have friended each other and, no doubt, a healthy chunk of new campaign cash will be flowing from these newly rich Obama supporters.

The trend is your friend's picture

Another bedtime story to read his curious daughter:  "How Jaimie Dimon (Daddy) bankrupted The largest bank in the US"

Ned Zeppelin's picture

An outcome not only predictable but inevitable.

ebworthen's picture

The machines of the oligarchy need individuals who are good equivocators, who are skilled at telling half-truth's and 3/4 lies to keep the gears grinding up the little people, the wheel of fortune turning their way, at the expense of decency, liberty, justice, prudence, sanity.

Rainman's picture

excellent summary of the tactical mission of skull and bones by skull and bones.....kudos.

Treason Season's picture

MK Ultra baby!


“The enemy has only images and illusions behind which he hides his true motives. Destroy the image and you will break the enemy. ”Shaolin Abbot to Bruce Lee, Enter the Dragon (1973)

 

loveyajimbo's picture

I could have saved them lots of time and money... Jamie is a crook, a liar, a manipulator and the scum of the earth.  He, like his ugly cousin Blankfein, will destroy anyone and anything in pursuit of profit and personal wealth.  The country and the world would be better off if cretins like them were placed in the deepest hole in the filthiest 3rd word prison for eternity.

Think for yourself's picture

yeah, except yours is a general opinion, and theirs is a specific quantitative semantic analysis, which exposes how and to what end he misleads, obfuscates or lies on various topics. Really no difference at all.

ArrestBobRubin's picture

The last paragraph? That's also known as psychopathy:

"Psychopathy (/sa??k?p??i/[1][2] from the Ancient Greek ???? "psyche", -soul, mind and ?????, "pathos" -suffering, disease, condition[3][4]) is a personality disorder characterized by a pervasive pattern of disregard for the rights of others and the rules of society. Psychopaths have a lack of empathy and remorse, and have very shallow emotions. They are generally regarded as callous, selfish, dishonest, arrogant, aggressive, impulsive, irresponsible, and hedonistic. Despite this, psychopaths are often superficially charming and can be highly adept at manipulation. There is at most only a weak association between psychopathy and high IQ."

See what I mean? But hey, at least he's a "Brilliant Risk Manager". At least to somebody.

 

dizzyfingers's picture

ArrestBobRubin:

Somehow psychopaths seem to end up in power. What's with that?

Rainman's picture

I'm pretty sure #5 is passing gas

malikai's picture

Nah, 9 is definitely the "I just farted" face. Not sure about the others.

francis_sawyer's picture

#9 is the "Do you want me to swallow or spit this out" face

tenpanhandle's picture

Number 5 is the person in the elavator with 9.

OpenThePodBayDoorHAL's picture

#7 is "I think my ben-wa balls have disappeared upward"

Yohimbo's picture

No. 4 is how the american public feels about bankers at this moment before moving to no. 2

BeetleBailey's picture

Actually, WB has crafted a tremendous sequence of someone doing the following;

Pictures 1 through 3 show this young woman conjuring up an SBD - a silent, but deadly fart that women for ages have adroitly blamed on any man standing around them.

Picture 4 is her loading up the sphincter to release the blast....

Picture 5 is her mid-blast, thinking it might be heard

Picture 6 is her using a woman's guile and facial expression to off-load the blame, soon to come

Picture 7 is her smelling the fart, and starting the ruse of blame....

Picture 8 is her identifying the patsy - which is Picture 9

palmereldritch's picture

Any indication from their analysis that he's a candidate for extraordinary rendition?

ebworthen's picture

Are you talking about making soap?

palmereldritch's picture

Not at all.  My concern is that Jamie's psychological profile may trigger a response from an increasingly fanatical police state out of control.

I'd hate to see him treated like the other patsies locked in Gitmo.

 

xela2200's picture

I wonder what all of this is doing to their silver short.

Hopeless for Change's picture

it's working.  I thought that might be a fit for the 'broken window fallacy', but a more appropriate metaphor would be like side-swiping a brick wall to get your passenger side door handle fixed.

americanspirit's picture

I thought that the biggest clue was that his pants were on fire.

navy62802's picture

These banks are going to implode again.

narnia's picture

I don't think the Fed will be able to preempt the next round of debt explosion.