D. Sidney Potter: A Dimon in the RoughReported by Huffington Post on Monday, 14 May 2012 (on May 14, 2012)
Like a fat kid and chocolate cake, some things are just inseparable. And CEO Jaime Dimon of JPMorgan Chase has proven that parable with his near insatiable appetite in saying the wrong thing at the wrong time.
Listening to the hastily convened conference call Mr. Dimon conducted with members of the press, institutional investors and Wall Street analysts last week, it was comedic and anomalous at the same time. Although Mr. Dimon is known to have a silver tongue, one could not help but cringe the next morning when major news outlets replayed segments of the conference call.
Keeping consistent with child-like parables, Mr. Dimon's explanation for the $2 billion plus derivative fiasco from one of its London based traders, nicknamed "the London Whale" and "Voldemort," after the Harry Potter villain, was like a teenager explaining to his math teacher that his dog ate his homework.
While most bank CEO's have the right mind to zip their mouth during a major faux pas, Mr. Dimon's propensity for dis-engagement is near impossible.
Excavating himself downward into a slippery deep hole, one just wanted to yell out "stop digging." The clumsy, inept and inelegant rationale had the bravado of a 2nd Lieutenant trying to explain to his troops how he called in air strikes with the wrong coordinates -- with the collateral damage consisting of half the platoon slaughtered. West Point pedigree or not, you're still upset at the guy for his ineptitude.
And although Mr. Dimon is a graduate of Harvard, it still might be wise for him not to turn his back for extended periods of time. One could almost hear the knifes being sharpened in the boardroom and Brutus preparing the last meal. Even General Custer probably had a better excuse for his troops then just simply stating, "My bad".
This is dangerous behavior. And while Mr. Dimon may have been right in suggesting that the trading activity was within the guidelines of the "Volcker rule" on or off steroids -- since legislation is soon to go in effect this summer, he may have severally incriminated himself in terms of a breach of fiduciary responsibility to bank shareholders. From the legal perspective of disgruntled institutional shareholders, this may be just what the doctor ordered as a pre-text in staging a boardroom coup.
With Mr. Dimon explaining, "Obviously, it puts egg on our face, and we deserve any criticism we get... so feel free to give it to us, and we'll probably agree with you."
Explanations like these just don't cut it. To be certain, lawyers for the pension funds, hedge funds, institutional investors and other concerned vested members in the operations of JPMorgan Chase -- will not be swayed by Mr. Dimon's "everything's okay, so bring it on" swagger.
Mr. Dimon's explanation that banking is risky business and that's what they all signed up for, will likely fall on deaf ears. When a bank loses $2 billion dollars in six weeks (that's with a big fat B), you don't just shrug your shoulders and say "Atta boy." Or as Mitt Romney would say, "Atta girl".
The whimsical, slightly high pierced cadence of Mr. Dimon's' explanation was rambling at times and veered up several octaves when he gave reassurances that it wouldn't happen again.
Ask a lie spotter, which are lie detection experts who recognize facial expressions, gestures and other forms of deception, and you might get a deeper and more disturbing profile of Mr. Dimon's behavior during his conference call. Pamela Meyer, author of Liespotting: Proven Techniques to Detect Deception, would have a field day in listening to Mr. Dimon's tortured explanation.
What Mrs. Meyers does, and those like her who carry the professional designation CPE, or Certified Fraud Examiners, is to learn the language of deception. They look for twitches in the face, unnatural voice inflection and nonverbal behavior -- and what they might tell you is that Mr. Dimon is a text book example of what not to do when explaining a colossal mistake. So colossal, that if one were to ask where the lawyers were when Mr. Dimon went live on the speaker phone, my guess is that they were in the next room vomiting.
The problem some in Wall Street will have with Mr. Dimon's assurance, is that it had been rumored for the past month that heavy blocks of trading were occurring that violated not only common sense, but potential regulatory laws. And that even if the tsunami-like trading was legal, it was so contrarian to Wall Street norms -- that lone wolf contrarians looked like milk n' cookie boys in comparison. And that's saying a lot for an industry that prides itself on its own testicular fortitude.
*Oversized Ambitions in the Banking Industry*
For the investment banking industry -- that likely has a 15 to 1 ownership ratio of Hummer vehicles compared to the rest of car owning America -- it speaks loudly of their own Freudian issues. Don't believe me, take a look at the 11 foot high, 7,000 pound bronze Charging Bull statue anchored a few blocks from the New York Stock Exchange on 11 Wall Street.
In the early 90s, when I first made my pilgrimage to Wall Street to meet with a firm for some mortgage operations project work, I was taken aback by its enormity. The magnitude and girth of the bull was abnormal. Especially so when viewed from the backside. If that doesn't scream inadequacies, I'm not certain what does?
Everybody loves a Shakespearean ending, and Mr. Dimon's Falstaf-like penchant for being a vain, boastful, attention whore, may in the end reveal that "the emperor has no clothes." Dubbed the "King of Wall Street", he might be more appropriately titled the "King of Narcissistic Behavior." And we all know what happened to the greek God of Narcissus? If you're not familiar with this tragedy of self-love, here's a short re-hash:
As Greek mythology explains it, Nemesis, the god of revenge and retribution, placed a spell on Narcissus to make him love his own image in a pool of water. Narcissus became so mesmerized by his own reflection that he died. Technically, it was by starvation, since he was so impressed by his own appearance, he could not wrest himself away of his own mirror image.
In addition to being very self-impressed, Mr. Dimon's penchant for remarkable non-sequiturs is near legendary. In response to the government's excessive regulations in connection with the bank industry's revenue generating practices (i.e., Bank of America's proposed debit card monthly fee), Mr. Dimon stated in October 2011, "If you're a restaurant and you can't charge for the soda, you're going to charge more for the burger." There's a special place in Hell for CEO's that think like that.
To be certain, Mr. Dimon is a moving road hazard. His foodie comment on what happens to the cost of a hamburger when you can't charge for a soda pop is comparable to Marie Antoinette's ill-fated quip, "Let them eat cake." In the end, Mr. Dimon may have to eat his own words. If you can imagine the visual, seeing Mrs. Antoinette up on the plank kneeling downward with her head squeezed in the guillotine rack, she must have had an incredible sense of self-reflection. Like. "What was I thinking!"
Mr. Dimon is not alone in his cocooned world of conceit and smugness. Hubris is nothing new to those in the real estate/mortgage finance world. As a recovering real estate investor who got his ass kicked in the last real estate cycle, I still find it painful to sit down. (That's how bad it was. Soft tissue damage at the very least). And then to add injury to insult, I've made my living as a mortgage operations consultant the last three years by cleaning up the toxic crap that I was somewhat responsible for inflicting. So I know what hubris is all about and the Shakespearean after-shocks. And the irony.
And as someone who had an executive office in the highest high-rise in downtown Los Angeles -- and west of the Mississippi, you feel a sense of uppity pride, sprinkled with a pinch of invincibility, and a side of arrogance. And then when you throw in gobs of money, it's what they call FU money. For those without an urban street dictionary, that's short for "f---k you" money.
Whether or not Mr. Dimon proves to be a cubic zirconia, or a true diamond in the rough, the value of JPMorgan Chase has suffered -- and even if only temporally, the denizens of its hard-working work force deserve a better form of leadership. A leader that invokes maturity, sensibility and fiduciary decency. Not leadership from a synthetic icon that never passed a mirror he didn't like.
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