Quote of the Day: Other Bankers are Even Dumber Than Jamie Dimon
From JPMorgan CEO Jamie Dimon, on whether his bank's $2 billion trading loss suggests that bank trading ought to be more closely regulated:
Just because we’re stupid doesn’t mean everybody else was.
Dimon is digging himself an even deeper hole here. Here's the thing: JPMorgan really does have a sterling reputation. So does Dimon. By consensus, he's probably the best big bank CEO around. But even so he managed to lose $2 billion in a few weeks.
Luckily, no big harm was done. JPMorgan has a solid balance sheet, the banking system is on solid ground these days, and the loss means little more than a hit to earnings. But think about this: If even JPMorgan can lose a colossal amount of money on stupid trades. If even JPMorgan has lousy controls in place. If even Jamie Dimon allowed himself to be lulled to sleep by a star trader. If all that happened, what are the odds it's not going to happen to a less well managed bank in the future, and happen at a time when it turns into another Lehman Brothers and shorts out the entire financial system? The odds are way too short for comfort, I'd say.
Would even Jamie Dimon take that bet?