How Jamie Dimon's New Business Model From Hell Could Take Down Wall Street – Again
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“Frank Vanderlip, coincidentally, an actual former president of National City Bank, wrote in the Saturday Evening Post at the time that lack of separation of banking and securities contributed to the stock market losing 90 per cent – I’d like to repeat that, 90 per cent – of its value from 1929 to 1933. The public was so sickened by the hubris and corruption that an entire generation stayed away from the stock market. It was not until 1954, 25 years later, that Wall Street once again reached the level it had set in 1929.
“There is a compelling body of evidence that suggests a corrupt cozy culture has once again enveloped the brains of Washington. We can hardly look to the safekeepers of the public trust when they are falling over themselves to reap campaign windfalls from Wall Street.”
In 1912 John Pierpont Morgan was summoned to testify before the Senate over ingrained corruption at JPMorgan. In 1933, the son, J.P. Morgan, Jr., repeated the performance. Jamie Dimon, who has managed the Morgan firm for a brief eight years and presided over multiple scandals during that time appeared once again before the Senate on June 13 to be grilled on the trading losses.
The only thing useful we learned from Dimon was that “hundreds” of Federal examiners are permanently stationed at the firm. This sounded like house arrest to me. I called the Bureau of Prisons to find out how many staff and correctional officers are assigned to the Federal super maximum security prison in Florence, Colorado. The answer is 350 but that includes shift work. So America’s largest bank by assets now operates on a par with a facility for people who are “the most dangerous and in need of the tightest control.” And we call this financial modernization.