Jamie Dimon Vs. Congress: 5 Strategies for the Most Powerful Man on Wall Street
JPMorgan's Chief Executive Officer will have to choose his words carefully, and here are some possibilities.
MINYANVILLE ORIGINAL Today, JPMorgan (JPM) Chairman and CEO Jamie Dimon will testify in front of the Senate Banking Committee about his firm's $2 billion (and possibly growing) trading loss at the hands of Bruno Iksil, a trader infamously dubbed "The London Whale."
Mr. Dimon will have to choose his words carefully, because Wall Street has become, rightly or wrongly, a scapegoat for everyday folks frustrated by a lousy job market and sky-high energy and food prices.
JPMorgan's chief investment office, where Mr. Iksil worked, was supposedly tasked with hedging risk at the bank.
However, a $2 billion loss that may be growing bigger might suggest that cowboy culture is still be running wild on Wall Street, with traders continuing to take mega-risks to make mega-bucks, backstopped by government bailouts should disaster strike.
Therefore, I've compiled five potential strategies for Mr. Dimon, based upon my extensive historical studies of US news and politics -- and Hollywood.
1. The Bill Clinton
On January 26, 1998, during the height of the Monica Lewinsky scandal, President Bill Clinton made one of the most memorable -- and infamous -- denials in presidential history when he proclaimed, "I did not have sexual relations with that woman, Miss Lewinsky."
Mr. Dimon could take inspiration and go with, "I did not have financial relations with that whale, Mr. Iksil."
In addition, President Clinton displayed a world-class mastery of semantics when he waxed poetic on the meaning of the word "is."
No really -- he was talking about the word "is."
It depends on what the meaning of the word 'is' is. If the -- if he -- if 'is' means is and never has been, that is not -- that is one thing. If it means there is none, that was a completely true statement... Now, if someone had asked me on that day, are you having any kind of sexual relations with Ms. Lewinsky, that is, asked me a question in the present tense, I would have said no. And it would have been completely true.
Hey, if President Clinton could argue the meaning of the word "is," then Mr. Dimon could most certainly launch a debate on the meaning of the word "hedge" -- and run out the clock out on Congress before they know what hit 'em.
2. The "You Can't Handle the Truth!"
In the final showdown in the 1992 courtroom drama A Few Good Men, Marine Colonel Nathan R. Jessup got absolutely fed up with the accusations of Lieutenant Daniel Kaffee, a cocky, young, Harvard-educated lawyer that suspiciously looked and acted like every Tom Cruise character in history.
So when Maverick -- I mean Kaffee -- demanded the truth from Colonel Jessup, a man that eats breakfast 300 yards away from 4,000 Cubans that are trained to kill him, the angry monologue heard 'round the world was spoken:
YOU CAN'T HANDLE THE TRUTH! Son, we live in a world that has walls, and those walls have to be guarded by men with guns. Who's gonna do it? You? You, Lt. Weinburg? I have a greater responsibility than you could possibly fathom. You weep for Santiago, and you curse the Marines. You have that luxury. You have the luxury of not knowing what I know. That Santiago's death, while tragic, probably saved lives. And my existence, while grotesque and incomprehensible to you, saves lives.
Following Colonel Jessup's example, Mr. Dimon could explain to Congress the importance of the CIO unit to the world economy and how it provides the flow capital upon which our economic rests.
How does this twist sound?:
I don't know -- I think it could work.
You have the luxury of not knowing what I know. That the Whale Fail's trading losses, while tragic, were a cost of doing business. The London Whale's existence, while grotesque and incomprehensible to you, enhances market liquidity and lowers the cost of capital for businesses worldwide.
3. The Mark McGwire
In 2005, baseball legend Mark McGwire was trotted out before the House Committee on Government Reform to discuss his use of steroids, at which point he decided he was a futurist.
Rather than address questions regarding steroid use on the part of him and his teammates, Mr. McGwire instead went with:
I'm not gonna go into the past and talk about my past. I'm here to make a positive influence on this.
So following Mr. McGwire's lead, Mr. Dimon could decide that he's not interested in talking about the past, and instead "make a positive influence on this" by JPMorgan's philanthropic efforts.
And since one of JPMorgan's key do-gooder activities is a hiring program for military, Mr. Dimon could whip out an old beltway favorite and declare that an attack on JPMorgan is an attack on the troops, and an act of support for the enemy.
4. The Oddfather
For literally decades, legendary NY mafioso Vincent 'The Chin' Gigante evaded the long arm of the law by faking mental illness According to the New York Times, "he could often be seen shuffling around his Greenwich Village neighborhood in pajamas, bathrobe and slippers, mumbling to himself and appearing to be a disturbed but harmless person."
Is such a display befitting a big-time mob boss?
Maybe not, but it kept him out of jail for most of his life. In 1969, The Oddfather escaped bribery charges after he was declared unfit to stand trial, and in the 1990s, his act helped him delay a racketeering trial for seven years.
The Chin eventually pleaded guilty and acknowledged his con job, and he did die in jail in 2005 at the age of 77.
Nonetheless, he pulled one over on the criminal justice system for a very long time.
Could Mr. Dimon grow desperate enough to start strolling Manhattan's Upper East Side in his bathrobe?
I don't know, but if it could push this mess back for seven years, it might be worth a shot.
5. The Nino Brown
(Warning: May not be safe for work due to violent content!)
In New Jack City, Wesley Snipes played the ruthless, hot-tempered, power-hungry crack kingpin Nino Brown.
But when Mr. Brown was finally arrested for his murderous rampage through the streets of New York, he crafted a remarkably clever courtroom strategy in which he:
1.Told a sob story:
...I was forced into this way of life. Hey look. I've been dealing drugs ever since I was 12 years old. See, i didn't have the chances that you had, Miss, Hawkins. I wasn't born with a silver spoon in my mouth, Miss Hawkins.
2. Blamed society at large:
I'm not guilty. You're the one that's guilty. The lawmakers, the politicians, the Colombian drug lords, all you who lobby against making drugs legal. Just like you did with alcohol during the prohibition. You're the one who's guilty. I mean, c'mon, let's kick the ballistics here: Ain't no Uzi's made in Harlem. Not one of us in here owns a poppy field. This thing is bigger than Nino Brown. This is big business. This is the American way.
3. Threw an underling under the bus by fingering him as the head of the Cash Money Brothers drug gang:
You may laugh, but the DA was so impressed that he cut Nino a plea bargain with a minimum sentence of 12 months!
Kareem Akmar! That's right, the educated brother from the bank. He's the head of the CMB, the brains behind the whole thing!
Twelve months! Even though he took over the Carter, cut off that Italian dude's ponytail, and snuffed out Gee Money and Pookie.
Jamie Dimon won't have any success selling a hard-luck childhood -- his father was a stockbroker -- but he can blame the Fed's easy money and the government's regulatory follies for creating a ticking time bomb.
And he does have a sacrificial lamb:
Bruno Iksil! That's right, the educated whale from London. He's the head of the CIO, the brains behind the whole thing.
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