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The JP Morgan conference call just ended and it was a doozy.It had to be; the bank was tackling the $5.8 billion loss in its London Chief Investment Office announced in May.
The loss prompted analysts to keep asking one question during the call that made JP Morgan CEO Jamie Dimon lose his cool (just a little bit).
Here it is—and it was asked by several analysts: Did the $5.8 billion loss in the London Chief Investment Office prove that your bank is too big to manage?
The debate on today’s call went something like this:
At first, when usual-suspect agitator Mike Mayo (of CLSA) asked the question, Jamie Dimon responded with a curt, “No.” But Mayo gave it the full court press, even asking if Dimon had lost his mojo.
Dimon was forced to list all JP Morgan’s accomplishments since the financial crisis and finally said that “The CIO was not where we expected a mistake …”
The question kept coming from other analysts throughout the call.
Chris Whalen put it in terms of external factors. When you have huge bets in the bank that depend on volatile interest rates, can those be managed amidst everything going on?
Nancy Bosch asked if any part of the bank (outside the CIO’s own risk managers) had ever looked at the office’s portfolio.
And so on.
Ultimately Dimon said: “We haven’t done a great job for shareholders lately … but we’re going to keep building the company and one day the share price will reflect it.”
All this means one thing: Not even Jamie Dimon could defend Wall Street from the newest, major doubt about our financial system.
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