Three JPMorgan Chase executives will take the fall for the “Fail Whale” trades that have so far cost the firm $2 billion. But Bruno Iskil, the actual London Whale, so far still has a job, for some reason, as does Jamie Dimon, the CEO who has been on an apology tour for his lack of awareness of the trading losses.
So far, the axe has fallen on two executives in the London division and their supervisor:
The bank – the biggest in the United States by assets – is expected to accept the resignation this week of Ina Drew, its New York-based chief investment officer and one of its highest-paid executives, in the next few days, the sources said.
Two of Drew’s subordinates who were involved with the trades, London-based Achilles Macris and Javier Martin-Artajo, are also expected to be asked to leave, they said. Neither was available for comment on Monday.
The departures come after the unit Drew runs, known as the Chief Investment Office (CIO), mismanaged a portfolio of derivatives tied to the creditworthiness of bonds, according to bank executives.
Many analysts believe that the problem was not the management of the Chief Investment Office, but the existence of it. It operated like a discrete unit, making bets on its own, much like a prop trading desk, in violation of at least the spirit of the Volcker rule.
Drew, who made $14 million last year, reportedly tried to resign on multiple occasions for the trades, but the resignation was repeatedly not accepted because of her past success. So in this case, the only individual looking for accountability was the accountable party.
Dimon himself has not responded to calls for him to resign from the board of the Federal Reserve Bank of New York, which have mainly come from US Senate candidate Elizabeth Warren. The Harvard professor reiterated her view on CNN today:
“This is about accountability. Banks have been loading up on risk and they don’t want to be accountable,” said Warren on CNN’s Starting Point on Monday. “Jamie Dimon is CEO not only of JPMorgan Chase, but he holds this position of public trust advising the New York Fed on how to regulate risk for these large financial institutions, like his own financial institution.” [...]
“It’s a real point about attitude here. And this isn’t personal to Jamie Dimon, it’s about what’s been going on ever since Dodd-Frank passed,” said Warren. “There’s been a guerrilla war out there in which the largest financial institutions have been doing everything they can to make sure that financial regulations don’t get put in place and if they do get put in place that they’re loaded with loopholes and not very effective.”
Indeed, this kind of staggering loss in a relatively placid trading environment makes the case for regulation all by itself. And if it happened to a financial firm in a less secure environment, we’d be talking about how large the bailout would be.




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I was just over at Yves place reading an article by Michael Olemik. He is finishing up a project making a database of all the banks bad stuff, and who won’t cooperate? Of 26 banks, only JP Morgan has refused to let him see their stuff. He points out, too, that the Whale biz was intended to hedge against the very dicy MBS’s that came with their WaMu acquisition, so if the Whale Failed, he expects WaMu to be a tidal wave.
Who coulda guessed that Wall St’s most powerful woman would be scapegoated.
I remember this one guy from back in the day who promised that his tenure in political office would keep this sort of thing from happening again.
What was his name….uh…lessee….I think it rhymes with “Carack Odama”.
No kidding.
Not a coinky-dink that the 1%ers have been waging their favorite war recently, which is the War on Women. Makes such sacrificial lambs more palatable to the masses. Of course, the male-dominated 1%ers get a big boost in this effort by one of the oldest & more powerful and very very male-dominated global corporations out there: the Roman Catholic Church. Very much a “I’ll scratch your back, if you scratch mine” effort.
In a nutshell: one “rule of law” for the 99%, and no laws whatsoever for the 1%. The bigger the crime, the less there is accountability these days.
I didn’t bother going on yesterday’s book salon. Did you?
IMO, the war on women is over & the men won.
Didn’t have the time; may try to review later.
Sadly it appears that the men have won bc far too many women appear to be satisfied with complete capitulation on this score. Unfortunate.
Fought the fight in my day. I lost.
Off to other chores.
No amount of regulation will do any good while the banks’ primary regulator, the NY Fed, is owned by the very same banks, with some bank CEOs on the Fed board. It’s ridiculous. This is why Geitner was a bad choice for Treasury.
And Dimon Wall Streets most powerful man was unawares that the Whale existed or was at risk. Give me a break.
Madeline Kunin was a good salon her book http://www.amazon.com/The-New-Feminist-Agenda-Revolution/dp/1603582916 in chapter one describes her failed expectations for women over the movements history. It is eye opening to see the challenges and losses of women’s status in American society.
My grandmother refused to wear pants (born in the 1890′s but became the president of her 80 some retail women’s wear chain. A college grad and mother of two. So the battle is ongoing. As Madeline points out women are in the majority in college enrollment by 10%.
and the 2 guyz with fuurrin names
he was the only choice ,im afraid
Dimon will be out precisely when enough major shareholders decide they want him out because he has cost them too much money, in their opinion. The entire notion of public accountability is an “externality” in banking. Dimon could hold responsibility for collapsing the entire US economy and raising the unemployment rate to 50%, and he would remain in his positions (including Fed board) if rich people kept making money on him, or believed that a major loss was just a blip.
I rememeber this guy (you mention) was gonna hire 56 attorneys in the DoJ whose sole responsibility was to prosecute bank fraud.
I’m not good on names either…….for the life of me I can’t recall his name.
Who is this Geithner guy you refer to and what is his job??????
:-)
All these resignations are meaningless as long as the biggest ass**** is still there. We have seen Yahoo’s CEO Thompson taken down this weekend because of his lies. Similarly, Chase should forcefully kick out Jamie DAMON or somebody should put a bounty on this punk. That will at least be a small beginning of some healing for what these crooks have done to the world.
I watched Jamie Dimon on the talk shows yesterday.
Fuckin’ asshole.
In the gool ol’ days, this guy woulda met with a horrible accident. In his interviews, he acted like somebody had misplaced an order of paper clips.
These people are parasites.
White House & Dems Back Banks over Protests: Newly Discovered Homeland Security Files Show Feds Central to Occupy Crackdown
Sun, 05/13/2012 – 21:23 — Anonymous
by:
Dave Lindorff
A new trove of heavily redacted documents provided by the US Department of Homeland Security (DHS) in response to a Freedom of Information Act (FOIA) request filed by the Partnership for Civil Justice Fund (PCJF) on behalf of filmmaker Michael Moore and the National Lawyers Guild makes it increasingly evident that there was and is a nationally coordinated campaign to disrupt and crush the Occupy Movement.
The new documents, which PCJF National Director Mara Verheyden-Hilliard insists “are likely only a subset of responsive materials,” in the possession of federal law enforcement agencies, only “scratch the surface of a mass intelligence network including Fusion Centers, saturated with ‘anti-terrorism’ funding, that mobilizes thousands of local and federal officers and agents to investigate and monitor the social justice movement
who always kill their hosts
Jamie’s employing the Sgt. Schultz defense.
Last month from C&L: JPMorgan Chase & Co. (JPM) (JPM) Chief Executive Officer Jamie Dimon has transformed the bank’s chief investment office in the past five years, increasing the size and risk of its speculative bets, according to five former executives with direct knowledge of the changes.
Achilles Macris, hired in 2006 as the CIO’s top executive in London, led an expansion into corporate and mortgage-debt investments with a mandate to generate profits for the New York- based bank, three of the former employees said. Dimon, 56, closely supervised the shift from the CIO’s previous focus on protecting JPMorgan from risks inherent in its banking business, such as interest-rate and currency movements, they said.
Some of Macris’s bets are now so large that JPMorgan probably can’t unwind them without losing money or roiling financial markets,
The transformation of the CIO has its origins in Dimon’s arrival at JPMorgan with the purchase in July 2004 of Bank One Corp., where he was CEO. Less than three months later, Dimon’s long-time lieutenant Michael Cavanagh became chief financial officer. He replaced Dina Dublon, a 23-year veteran of JPMorgan and its predecessors.
At the time, JPMorgan also said Ina Drew, who ran global treasury at JPMorgan prior to the acquisition, would report directly to Dimon. Drew’s title changed in February 2005 to “chief investment officer,” according to the 2005 year-end filing.
Dimon pushed the unit to seek bigger profits by buying higher-yielding assets, including structured credit, equities and derivatives, and ramping up speculation, according to two former employees.
http://crooksandliars.com/susie-madrak/former-execs-jpmorgan-chase-gambling-
I hear Dimon is in line for a big promotion to head the Treasury. It’ll be a big step up for him, after he crashes JPM. I wish that were a joke or sarcasm or something; but it’s not.
From ZERO Hedge over a year ago:
We’ve been over the numerous BS excuses that US Dollar destroyer extraordinaire Ben Bernanke has made for QE enough times that today I’d rather simply focus on the REAL reason he continues to funnel TRILLIONS of Dollars into the Wall Street Banks.
I’ve written this analysis before. But given the enormity of what it entails, it’s worth repeating. The following paragraphs are the REAL reason Bernanke does what he does no matter what any other media outlet, book, investment expert, or guru tell you.
Bernanke is printing money and funneling it into the Wall Street banks for one reason and one reason only. That reason is: DERIVATIVES.
According to the Office of the Comptroller of the Currency’s Quarterly Report on Bank Trading and Derivatives Activities for the Second Quarter 2010 (most recent), the notional value of derivatives held by U.S. commercial banks is around $223.4 TRILLION.
Five banks account for 95% of this. Can you guess which five?
click to enlarge
Looks a lot like a list of the banks that Ben Bernanke has focused on bailing out/ backstopping/ funneling cash since the Financial Crisis began, doesn’t it? When you consider the insane level of risk exposure here, you can see why the TRILLIONS he’s funneled into these institutions has failed to bring them even to pre-Lehman bankruptcy levels.
Ben Bernanke is a stooge and a fraud, but he is at least partially honest in his explanations of why he wants to keep printing money. The reason is to try to keep interest rates low. Granted, he’s failing miserably at this, but at least he understands the goal.
Of course, Bernanke tells the public and Congress that the reason we need low interest rates is to support housing prices. He doesn’t mention that $188 TRILLION of the $223 TRILLION in notional value of derivatives sitting on the Big Banks’ balance sheets is related to interest rates.
Yes, $188 TRILLION. That’s thirteen times the US’ entire GDP, and nearly four times WORLD GDP.
Now, of course, not ALL of this money is “at risk,” since the same derivatives can be traded/spread out dozens of ways by different banks as a means of dispersing risk.
However, given the amount of money at stake, if even 4% of this money is “at risk” and 10% of that 4% goes wrong, you’ve wiped out ALL of the equity at the top five banks.
Put another way, Bank of America (BAC), JP Morgan (JPM), Goldman (GS), and Citibank (C) would CEASE to exist.
If you think that I’m making this up or that Bernanke doesn’t know about this, consider that his predecessor, Alan Greenspan, knew as early as 1999 that the derivative market, if forced into the open and through a public clearing house, would “implode” the market. This is DOCUMENTED. And you better believe Greenspan told Bernanke this.
In this light, all of Bernanke’s monetary policies and efforts are focused on doing one thing and one thing only: trying to shore up the overleveraged, derivative-riddled balance sheets of the Too Big to Fails, or Too Bloated to Exist, as I like to call them.
The fact that the bank executives taking this money and using it to pay themselves and their employees record bonuses only confirms that these folks have NO interest in taking care of shareholders or their businesses. They’re just going to take the money and run for as long as this scheme works.
I don’t know when this will come unraveled. But it WILL. At some point the $600+ TRILLION behemoth that is the derivatives market will implode again. When it does, no amount of money printing will save the Too Bloated To Exist banks’ balance sheets.
At that point, it’s game over for Wall Street and the Fed
It would be a at least 15 million per year pay cut. So no, talk is cheap.
Anyone see “Margin Call,” the recent movie?
I saw it about 10 days ago, and, wowser, does this real life Whale implosion seem to be following the script. Right down to a female high official being offered as the sacrifice to the Street to show Dimon is “doing something” to control the damage.
Jeremy Irons played the head honcho of the movie’s financial firm with withering coldness and abuse of power. The woman head of risk analysis in the movie had given him several warnings about the trading program which blew up on them — and she got the axe.
Deja vue all over again.
This is not a new graphic, but it is a representation of the amoung of money in derivatives held by the largest banks. All derivatives come to about $3 Trillion dollars, or about 3 times the global economy (at the time of the posting of these graphics).
Always entertaining in a horror movie kind of way (a horror movie which is so realistic, so actually possible, it really does scare the viewer)– JP Morgan Chase is the big cahuna in terms of holding derivatives: just over $1 TRILLION.
Scroll down to the bottom for Morgan Chase, but don’t miss any of the comparisons.
can anyone explain what they do?
other than make money for themselves?
Remember this: (Salon.com)
Which is why this guy will not resign, and nothing will happen. nothing at all.
I guess that really does make him “savvy”
And the Yahoo CEO’s lie was SOOOOOOO huge: On his resume, it stated he had a degree in accounting and computer science. He is 54 years old, 12 years younger than I am. I wasn’t in engineering or anything like that, but I don’t recall actual degrees in computer anything back then. Does anyone know of schools which did have computer science degrees back when this guy was in college?
It was a serious, monster lie –probably someone told him to add the “computer” thing because he had experience in the field and it was a way of giving it some buzz.
But, the hedge fund guy who brought this up, was using it as a tactic to achieve his goal of breaking up Yahoo and selling off its parts. And the now ex-CEO stood in his way. So, it’s hedge fundie 1; CEO 0.
Not making excuses, but, seriously, it was not a major lie as resumes go.
Typo — “among” should be “amount”
Not if your administration favored Wall Street over Main Street. At least “W” told the truth when he described his constituency as the “haves and have mores”. Obama’s just a more accomplished liar.
The collusion between DHS/Napolitano and the mayors of the Occupied Movement cities was revealed, on Democracy Now, during the Oakland crackdown months ago.
So, anybody taking bets on how massive Dimon’s platinum parachute will be?
I’m guessing a $100-150m handshake.
Hey folks. No worries, what could possibly go wrong?
We have the best and brightest at the helm.
It’s not like they almost destroyed the world economy, right?
I mean time and time again, they’ve shown they’re always correct, right?
/s
When it falls … and it’s only a matter of time … it will be epic …