Jamie Dimon is not your typical Wall Street exec.
- Jamie Dimon: America's Infrastructure System Is "Bureaucratic, Stifling, and Corrupt"
- 5 Things You Didn't Know About JPM CEO Jamie Dimon
- Mark Wetjen: A Salivating Wolf in the Regulatory Henhouse
- The Tragic Truth Behind the $13 Billion JPMorgan "Fine"
- Sorry CNBC, but the $13 Billion JPMorgan Fine Was No Shakedown
- Is Jamie Dimon's "Scary and Volatile" Prediction on Target?
- Five Scandals That Made JPMorgan Wall Street's Worst Villain
- The 5 Worst CEOs of 2012 and Why They Should Be Fired
- JPMorgan (NYSE: JPM) CEO Jamie Dimon Can Wallow in $23 Million
- What I Learned From My Lunch with Vikram Pandit
In case you missed the kerfuffle last Friday, Blythe Masters, the 44 year-old, super-smart head of JPMorgan Chase's commodities trading business, declined to sit on the U.S. Commodity Futures Trading Commission's (CFTC's) Global Markets Committee advisory board.
This came as a big surprise.
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Let's address two tragedies today.
The first is how Jamie Dimon & Co. and all the guilty big banks get away with murder.
The second is something I want to share with you because 50 years ago today, President John Fitzgerald Kennedy was assassinated. It isn't a conspiracy theory about who did it, but a likely theory about what happened and the conspiracy to cover that up.
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Many in the financial world seem to think that the $13 billion fine the government slapped on JPMorgan was excessive. But this was no first offense. JPMorgan, like other Too Big To Fail Banks, has a long and sordid track record of misdeeds.
JPMorgan CEO Jamie Dimon created a stir across the globe Thursday when he told a forum in China markets will remain volatile because of extraordinarily low interest rates.
Speaking at the Fortune Global Forum in Chengdu, China, Dimon said, "It's a different world when central banks are managing interest rates.... Until it gets back to normal, it's going to be scary and volatile."
Stuart Varney, the host of FOX Business' "Varney & Co.," asked Money Morning Chief Investment Strategist Keith Fitz-Gerald and Wall Street analyst Meredith Whitney for their take on Dimon's comments.
Is Dimon right? Check out what Fitz-Gerald and Whitney had to say in the accompanying video.
Wall Street's Big Banks are hardly known for their good deeds, but JPMorgan Chase (NYSE: JPM) may be the worst of the lot.
For a bank that used to be considered a model citizen among Wall Street institutions, the reversal of reputation has been stunning.
According to The New York Times, at least eight federal agencies are currently investigating JPM. And JPMorgan has more regulatory sanctions against it than any other major U.S. bank.
The damage to JPMorgan's reputation has gotten so bad that it has started to negatively affect the nation's largest bank by assets.
Increased regulatory scrutiny brought on by the scandals has slowed or halted about 60 new projects in JPMorgan's consumer unit, for example. The turmoil also has touched off a series of high-profile departures from the bank.
Money Morning's experts picked through the list of disappointing names and came up with the five worst CEOs of 2012.
Here are the finalists, along with our experts' reasons why these weak performers should be given the axe in 2013:
- Ben Bernanke, Chairman of the U.S. Federal Reserve - Picked by Chief Investment Strategist Keith Fitz-Gerald:
Bernanke is the CEO of the biggest private institution on the planet, the Fed.
Despite overwhelming evidence that the theories and methods he is using have not worked, are not working and have never worked since the dawn of recorded history, he continues to plow ahead with more of the same failed monetary and fiscal policy that got us into this mess.
In the process, he risks unspeakable damage to the United States and to the global financial system while only kicking the proverbial can down the road.
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Even amidst regrets over the massive $2 billion trading loss, the merciful bunch of investors approved Dimon's $23 million pay package.
The repentant Dimon briefly addressed the group after the meeting began, requesting forgiveness.
"This should never have happened. I can't justify it. Unfortunately these mistakes were self-inflicted," Dimon admitted.
According to preliminary votes, an overwhelming 91.5% of shareholders approved Dimon's $23 million in salary and bonus for his 2011 performance, the same amount the 56-year-old CEO received in 2010.
Good news considering the Justice Department has started a probe into the $2 billion trading loss at JPMorgan, The Wall Street Journal reported. With few details about the investigation, The Journal noted that the inquiry has yet to zero in on what legal infractions may have been committed.
Nell Minow, co-owner and board member of research firm GMI Ratings, told Bloomberg News that the majority of votes regarding compensation and other topics were most likely cast before the loss was announced.
"I don't think that the vote will be indicative of shareholder concerns on this issue. It's unusual to have such shocking and bad news come in after most of the votes have been cast," Minow said.
Dimon, no doubt anxious to exit from the piercing eyes of concerned shareholders, moved the meeting along quickly, with the official assembly lasting just shy of an hour.
But Dimon left the pow-wow only to be greeted by a crowd of protesters, making its presence loud and clear with signs that criticized the $2 billion loss as well as the bank's actions in the housing market.
I was having lunch with Citigroup Inc. (NYSE: C) Chief Executive Officer Vikram Pandit, and he had some interesting points.
According to Mr. Pandit, providing money and financial services to business is still a pretty attractive undertaking on a global scale.
Of course, he was also quick to mention that top quality risk controls and much higher liquidity are absolute necessities.
"Banks need to realize they are in a new reality," he said.
He couldn't be more right.
I warned you back in August that bank stocks were headed for a "catastrophic decline," and that proved to be true.
Since that article's Aug. 17 publication, Bank of America Corp. (NYSE: BAC) has tumbled 12.7%, Goldman Sachs Group Inc. (NYSE: GS) fell 9.9%, JPMorgan Chase & Co. (NYSE: JPM) is down 5.5%, and Morgan Stanley (NYSE: MS) is down 2.1%.
In fact, the MSCI US Investable Financials index is down 12.6% on the year and has achieved a less-than-stellar return of -12.6% per annum over the last five years.
And it's not hard to see why.
Third-quarter bank earnings were mediocre at best, and some of the special protections offered to banks are being wound down. Additionally, banks are in popular odium and demonstrations against them are erupting in every major U.S. city. And the effects of increased regulation are yet to come fully into view.
Still, for the first time since the stock price "bounce" of 2009, bank stocks are beginning to look somewhat attractive and the time to start bottom fishing may be at hand.
Banks Worth BuyingFor those few banks with genuine global networks, international banking remains on a growth curve as globalization intensifies and more emerging market companies diversify outside their own country and region. Domestically, retail banking remains a good business. Credit card losses are beginning to decline while spreads remain at record levels.
Consequently, there are very good bargain-buying opportunities at large.
Remember, though, that any investment should be made gradually over time, because while the chances of a repeat of 2008 are remote -- at least in the United States -- there is still a great deal of risk and uncertainty in the banking sector.
You should avoid banks with large exposures to problems of the past. That means staying away from Bank of America and Wells Fargo & Co. (NYSE: WFC). Both of these banks remain heavily exposed to West Coast real estate, and in BofA's case, to the mortgage-backed securities disaster, as well.
However, the following financial firms are worth looking at: