What really set me off was the Wall Street Journal’s Holman Jenkins writing “Jamie Dimon Stubs Dodd-Frank’s Toe” and his soft-shoe shuffle around JP Morgan Chase Bank’s $2 billion dollar trading fiasco. Jenkins minimized it as a “paper loss” and “a systemic crisis this is not.”
One wonders about the smug clairvoyance that intimates this is ‘much ado about nothing.’ If Jenkins were to count from one to a billion, it would take him 95 years. Nevertheless, he further conjectures that the loss “might still become a profit in future quarters” — even though his own paper reported that JPMorgan’s losses could top $4 billion. And indeed just yesterday, the New York Times reported that “JPMorgan’s Trading Loss Is Said to Rise at Least 50%.”
“A billion here, a billion there . . . .”
Life is a theater of the absurd. Apocryphal or real, it doesn’t matter whether the late Senator Everett Dirksen said, “A billion here, a billion there, and pretty soon you’re talking real money.” The quote is still apt as we digest this latest financial trading convulsion.
Rather than Jenkins’ knee-jerk speciousness, I’m more inclined to go along with Jesse Eisinger in ProPublica that “when they are in trouble, banks will mislead the world about their financials.”
Besides being the nation’s biggest bank, JP Morgan Chase is supposedly its most prudent. But speaking of ‘prudence’ and devalued “real money,” its pundit-sanctified ‘smartest guy in the room’ CEO Jamie Dimon is the country’s highest paid bank CEO knocking down a $23 million compensation package in 2011. Why even the prodigious appetite of “Diamond Jim” would be impressed by such financial voracity. And that’s saying a lot since the “Gilded Age” financier Diamond Jim Brady’s stomach was six times the size of the average person.
As for ‘Dimon, Jamie,’ little wonder that a guy sniffing high altitude air finds it hard at first to breathe in concerns about his bank’s trading activities. A “complete tempest in a teapot,” Dimon said, blowing off early reports about trading losses.
Of course Dimon’s pooh-poohing was in April around the time first quarter earnings were reported – – and before the $2 billion dollar risky derivative poop hit the fan.
Magical mystery mea culpa tour.
Once it became known that another of those ‘too big to fail’ banks had suffered a $2 billion dollar loss because of trading blunders, Dimon belatedly professed contrition. Since then, he’s been on a magical mystery mea culpa tour, now conceding how wrong it was to have averred otherwise. Indeed, the three executives with oversight responsibility for the trading loss were shown the door.
But cavalier attitudes toward money aren’t just the province of Wall Street or the fantastical dominion of discombobulated columnists. On another playing field, the ivory tower of academia, this week also found more of that fake solicitude toward rising student debt and the spiraling cost of college education.
Living in tall cotton.
It was from Ohio State University’s E. Gordon Gee, who as the $2 million dollar plus man holds the distinction in his arena, of being the country’s highest-paid public university president.
I doubt cotton is grown in Ohio anymore. But with a Dayton newspaper reporting that Gee had billed $550,000 for travel expenses the past two years, that’s powerful support for the proposition that there’s some pretty ‘tall cotton” growing in Ohio for President Gee to live in. See “Slowly, as Student Debt Rises, Colleges Confront Costs.”
But having someone like Gee call for colleges to adopt new models for doing business makes as much sense as Nero suggesting his lyre needs to be restrung while Rome burns.
College tuition is out of control. And it hardly helps that college CEOs are so out of touch. Since 1978, college tuition has risen even faster than everyone’s favorite financial scourge: health care.
What colleges really need to do is stop taking advantage of students and of parents too docile to object to swallowing unremitting, unsupportable costs.
Stop raising tuition and instead improve efficiencies. Extract more value from ‘the help’ and take a cleaver to overhead – – – not the least being eliminating the runaway practice of overpaying fat-cat university presidents. Also see “A college degree in three’s not free.”
But publicly, at least, give Gee credit for getting more emotional about money than apparently the more reserved Jamie Dimon. On Ohio State’s recent receipt of a very large financial donation, he reportedly fought back tears. “Every time I get a lot of money I cry,” he said.
But the real unintended punch line that assuredly resonated with students and parents was when he added, “And I got a lot of tears left.”
For genuinely grief-stricken students and their parents crying about their non-dischargeable six-figure college tuition debts, they’re the ones with really something to cry about.
Credits: “Diamond Jim Brady,” via Wikipedia Commons and in the public domain; “Remorso de Nero”, pintura do século XIX feita por John William Waterhouse em 1878 via Wikipedia Commons in the public domain.