(Editorial cartoon by Jim Morin / Miami Herald (May 16, 2012) and featured at McClatchy DC. Click on image to enlarge and then return.)
So, JP Morgan Chase has lost $2 billion (maybe $3 billion) on risky derivatives. Wall Street (and White House)darling Jamie Dimon, the CEO of JP Morgan, admits that the bank was stupid for making these kinds of investments and he is unhappy with the traders involved. He even said he welcomed an investigation. He did not say, however, that regulations against banks making these kinds of foolish gambles should be in place.
Some voices in Congress suggest just the opposite, but only a few. Most are maintaining the position that we should see how this plays out. Frankly, in light of this report from Open Secrets, I am a little surprised.
When Wall Street giant JPMorgan Chase announced this week that it had lost an estimated $2 billion (now upped to $3 billion) on risky trades, Republican and Democratic members of Congress rushed to make their political cases: Either this was something that more regulation couldn't have prevented, or this was exactly what stronger government rules could have thwarted.
None of them, however, mentioned whether they had a financial stake in JPMorgan Chase.
Usually, the money-in-politics conversation is about how much money a company has invested in a politician via campaign donations. In this case, while JPMorgan Chase has plenty invested, it also goes the other way: at least 38 members of Congress owned shares in the bank.
The article (as usual) has a couple of handy charts which sets forth the reported investments by members of the Senate and the House. A couple are eye-raisers, but most are fairly small in the grand scheme of things. Still, as shareholders, the value of their shares is affected by the situation. You'd think the congress critters involved would be a little more exercised than this. They aren't, probably because they intend to make it up when it comes time for 'campaign contributions.'
There was one entry that did more than raise my eyebrows, however. In fact, I got a bit of whiplash from seeing it:
President Obama doesn't own any stock in JPMorgan, but he is a client -- on his most recent financial disclosure form, filed this week, the president reported having two checking accounts there, one worth between $500,000 and $1 million.
That's a checking account.
We really are fucked.