The House o’ Dimon has said to be letting some people down gently today. Read more »
JPMorgan
Keith Hahn was a former analyst at JPMorgan, associate in PE, consultant for a hedge fund, gigolo for hire and Dealbreaker editor. He’s now a writer in Los Angeles.
Not everyone gets to write a New York Times Op-Ed when they quit their job, however disaffected. It’s also easier to quit a job after twelve years of cashing investment banking paychecks. No matter how “morally bankrupt” Goldman Sachs is, Greg Smith isn’t giving his bonuses back.
Unlike Smith, who quit his job on his own terms and got to publish most of his resume in the Times, most of corporate America isn’t as lucky – and almost everyone in corporate America really wants to quit their job.
So what are you supposed to do if you can’t get any above-the-fold space in a major newspaper?
You have to burn bridges the old fashioned way – by writing a farewell email. Read more »
It’s Probably Best Not To Think Too Hard About JPMorgan’s Revenue-Per-Trade Breakdown
By Matt LevineDespite its overwhelming brown-ness I was kind of mesmerized by this slide from Jes Staley’s presentation for use later today at JPM’s investor day:
The table shows the “number of trades” and revenue per trade for a bunch of JPMorgan’s investment bank trading products, which it’s disclosing now for reasons that are unclear but you can guess. Bloomberg does: Read more »
John Chrin, a former managing director at J.P. Morgan Chase & Co. who left the firm in June 2009 to pursue an executive-in-residence position at Lehigh University, recalls seeing junior staff gain 30 or 40 pounds within a couple years on the job. When he worked at Merrill Lynch & Co., now a unit of Bank of America Corp., he recalls that one managing director ordered a chauffeur to turn on the air conditioning even though it was out of order, causing the car to burst into flames. The managing director then threatened to have the driver fired. Bank of America declined to comment…Alexandra Michel, an assistant management professor at USC’s Marshall School of Business, shadowed the bankers at the office—sitting next to them, following them to meetings, mirroring their hours and even pulling all-nighters—for more than 100 hours a week during the first year, about 80 hours a week during the second year, and then followed up with in-person interviews. One mild-mannered banking associate spoke about exploding in rage at a cab driver after unsuccessfully attempting to open a locked door from the outside: “I became so furious that I kept banging against the windows like crazy, swearing at the poor guy. And then I turned around and saw that a managing director was watching with his mouth open. I was so ashamed.” [WSJ]
Jamie Dimon Will Not Have His Employees’ Balls Examined Every Time They Want To Make A Trade, No Matter How Bad Paul Volcker Wants It
By Bess LevinI understand the goal to make sure these companies don’t take huge bets with their balance sheets. But market making? Just like these stores down the street, when they buy a lot of polka dot dresses, they hope they’re going to sell, they’re making a judgement call. They may be wrong! So protecting the system I agree with, but starting to talk about the “intent”…I tell you… for every trader, we’re going to have to have a lawyer, compliance officer, a doctor to see what their testosterone levels are, and a shrink [asking them], “what’s your intent?”. No we’re going to make markets for our clients to give them the best produtcts, the best services, the best reserach and the best prices. That’s a good thing in spite of what Paul Volcker says. [FBN]
If The SEC Really Wanted To Get Tough On Securities Fraud It Would Have Added Some Minor Inconveniences To Its Multi-Hundred-Million-Dollar Fines
By Matt Levine
It’s clear that I am a terrible person because I continue to be unable to get all that excited about banks that commit fraud. And the big thing today is that the SEC doesn’t put banks out of business just for committing fraud, which I think is rather sporting of them but lots of people disagree.
Here’s the issue:
By granting exemptions to laws and regulations that act as a deterrent to securities fraud, the S.E.C. has let financial giants like JPMorganChase, Goldman Sachs and Bank of America continue to have advantages reserved for the most dependable companies, making it easier for them to raise money from investors, for example, and to avoid liability from lawsuits if their financial forecasts turn out to be wrong.
An analysis by The New York Times of S.E.C. investigations over the last decade found nearly 350 instances where the agency has given big Wall Street institutions and other financial companies a pass on those or other sanctions. Those instances also include waivers permitting firms to underwrite certain stock and bond sales and manage mutual fund portfolios.
JPMorganChase, for example, has settled six fraud cases in the last 13 years, including one with a $228 million settlement last summer, but it has obtained at least 22 waivers, in part by arguing that it has “a strong record of compliance with securities laws.”
Ha ha ha strong record of compliance with a fraud case every two years or so! What a sham! Except that JPMorgan actually does have a strong record of compliance, and is generally viewed as being pretty conservative and law-abiding.
This stuff stirs emotions because it’s hard to think about who is being punished here. Corporations are people, my friend (still), but in the way Mitt Romney meant it, not in the way everyone pretended to take it. Like: JPMorgan employs a lot of people, and some of them are maniacs and crooks and liars and most of them aren’t and that’s true of … the SEC, for instance, and The New York Times,* and anyone else who wants to give them shit for their fraudulosity. But JPMorgan isn’t an individual human, not any more anyway. So saying “JPMorgan is crooks” is sort of nonsensical. Read more »
JPMorgan VP Plays (Corporate Basketball) To Win, Starting By Building A Fortress-Like Defense
By Bess Levin
Those of you who’ve been in the working world for a while have probably experienced the IM softball/soccer/basketball thing. What you probably haven’t experienced is being on a team that actually puts in the work to go all the way, rather than simply showing up to dick around for a free tee-shirt and to maybe get trashed with colleagues after games. For the men who’ve earned the privilege of serving on the JPMorgan 2012 London basketball team, things are going to be a bit different, as noted in the extremely detailed strategy email sent out by its amped up captain and obtained by Deadspin. For starters, in addition to two training sessions (plus games) each week, there’s going to be homework. Come prepared and it’s all good; show up not knowing your shit and so help you god.
From: redacted at jpmorgan dot com
Sent: Wednesday, January 25, 2012 7:11 PM
Subject: TrainingFellas,
Thanks to all of you who were able to attend last night’s session. I’m amped because we are finally approaching the right commitment levels to become a really strong squad. We have a very talented group of individuals, but our growth as a team will be dictated by the amount of work we put in together. I hope you guys share my enthusiasm for what we can become.
Cuts are said to be going down at the House o’ Dimon. Read more »
How Is The Whole “Don’t Risk All Your Money Trading For Your Own Account” Thing Working Out For US Investment Banks?
By Matt LevineAll the big banks have reported earnings so let’s take a little stock of things, shall we? A thing I did midyear was look at the ratio of trading net revenues to VaR for GS and MS, to prove that MS was winning the trading or something. Let’s expand that a bit. The result is, I think, an interesting chart:
The interpretation you could put on this is “this is how much money GS/MS/JPM/BAC made on an average trading day for every dollar of capital that they said they had at risk on that day.” Technically, this is is a graph, quarterly from 1Q2006, of [Trading Net Revenue / (Average Daily VaR * Trading Days in Quarter)], for four banks. Go read caveats here.*
This is obviously a toy chart, and too aggregated/undersampled to tell you all you might want to know, but still kind of fun. Read more »
The take-away here is put in for that transfer to Brazil? From the front lines: Read more »
JPMorgan earnings this morning were a bit disappointing, with investment banking revenue down 30% y/o/y in what may be a bad sign for the rest of the industry, but the Jamie & Doug In The Morning Show remains finance’s top-rated program in its time slot and it did not disappoint today. This is in part because the callers have learned how to play to the hosts’ strengths; my favorite part of the call went something like this (paraphrasing slightly):
Jamie Dimon: Ooh I hates me some regulators. Next question?
Analyst: Wow. After Jamie’s speech about regulators, my question is going to sound really mundane. [Asks mundane question]
Braunstein: [Gives mundane answer]
Analyst: So, Jamie, do you want to say anything more about regulators?
Dimon: Sure! [Does]
But Dimon’s statement that “basically there’s no one in charge of the global financial system” was more or less unprovoked. It was also the main theme of his remarks, particularly about Europe, where “regulatory policy is completely contradictory to government objectives” as the ECB throws gobs of money at banks to encourage them to lend and keep their governments afloat, at the same time that regulators tighten capital standards, reducing lending, and crack down on holdings of dicey peripheral government bonds. For himself, he’s a big fan of the ECB’s work on liquidity, less keen on Basel et al.’s work on capital requirements. There is no book-talking whatsoever here.*
Read more »
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