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Amar Bhide: Dimon Should Lose His Job Over CIO Mess

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Tufts professor Amar Bhide states in a Bloomberg interview that Dimon should have been ousted over the losses in JP Morgan’s Chief Investment Office. The interview is instructive on several levels, not just for his defense of that view, but also in how it put the reporters on tilt. You can see Bhide get increasingly frustrated at the interruptions and knee jerk reactions from his interlocutors (in fairness, he also appears to have been distracted by the remote monitor).

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22 comments

  1. Rahul Deodhar

    Yves, can you do a skype chat or video with Amar Bhide. We would love to see it. Or maybe just ask Prof. Bhide to put out his video recording via youtube. I am sure his students can def help him there.

    Rahul

  2. stripes

    I was watching the interviews with the so called financial experts on CNBC after Jamie Dimon told his version of the story about what he and his buddies do-do over at Chase. They all said those billions in losses were really no big deal for a bank as big as Chase, (puff, puff) and there is no banker who could do a better job (robbing US) right now than Dimon. Easy to say that when it is other people’s money you are gambling with and losing. I agree with what Jim Cramer said earlier that day….CHASE should be writing checks to those that lost their money.
    If these banks and investment firms continue to get away with this
    behavior, the next loss could be catastrophic.

    1. Glen

      There has been a total failure of corporate governance over the last ten years (or maybe longer). Jamie is just one of many CEOs who ran his company into the ground and has yet to be held accountable.

      There are parallels to our breakdown in Federal governance except most of the corporate disasters benefit from a lack of transparency.

  3. Cap'n Magic

    Watching this is painful. Especially coming from Bloomberg’s talking heads-who seem more at home style-wise on Faux that Bloomberg.

  4. craazyman

    It was a good interview. The questions were fair, but Mr. Bhide got a lot of wood on the ball and hit a few out of the park. This is the second Bloomberg interview with Mr. Bhide and I’m sure the hosts appreciate his point of view. It makes for a “dramatic” interview and interesting TV.

    I like the drunk driver analogy. I was thinking of another automobile analogy, speed limits. Mr. Dimon is like the Formula One racer — a very talented driver — who decides he wants to take his Lambroghini out on I-95 and go 160 miles per hour. If he does it, then everybody else should be able to do it to. In fact, he’s saying it would make the highways safer. (I wish I had an emoticon for that one.)

    So why not just raise the speed limit to 160? Because most people can’t handle that and even Mr. Dimon has proven he’s human. So most people restrain themselves and go about 75 or so, even if it is “government regulaton”.

    1. anon48

      I watched the interview live on Bloomberg on Friday. I agree that the questions were fair. Shatzker’s setup was also fair where he clearly laid out the drunk driver analogy. I was disappointed overall with the interview.

      I think the Professor shot himself in the foot at the outset going for dramatic effect by describing Dimon’s story as a “preposterous Orwellian statement”. Shatzker rightly called him out on that. Unfortunately, from my perspective, Bhide fumbled the response and subsequently seemed unable to recover from that stumble out of the gate. He struck me as being overly defensive for the remainder of the interview by the valid questions put to him.

      I appreciate the speed limit analogy, though, since that actually does reflect the preposterous nature of Dimon’s statement.

      1. readerOfTeaLeaves

        I thought the driving analogy should be extended:
        Bhide, 3:07: ‘No business would keep cash reserves… in stock or 30-year-bonds (designed to generate profit)…’
        Seems roughly equivalent to Dimon claiming that as long as you are racing on the road, no lane lines are necessary, you don’t need to know what direction you are going, and there is no point in having guardrails.

        Bhide, 5:45 ‘John Goodfriend did not lose a single penny of either the public funds or shareholder funds’
        In other words, standards have declined so far – at least in the media – that the Bloomberg interviewers were incapable of distinguishing between a CEO who was ousted for problems with the organization, and a CEO who destabilizes entire national economies.

        Near the end of the interview, Bhide distinguishes between BP’s Tony Hayward, and Jamie Dimon – linking the two by the damage they do to the public good.
        It looked to me as if neither Bloomberg reporter had a clue about the meaning or significance of the term ‘public good’, and they couldn’t seem to grasp the implications of the analogy between the BP blowout of May 2010, and The London Whale’s blowout of spring 2012, which has a toxic effect on the financial system.

        Bhide made fine distinctions, and doesn’t seem to view ‘profit’ as the only relevant metric.

        Bloomberg, simplistically, appeared to be ‘profit’ as the only relevant metric (irrespective of how the books may have been cooked to come up with that profit). In addition, they seem to be Orwellian cheerleaders for a reckless raceway in which there are no speed limits, no traffic signs, no rules of any kind, as long as you can burn rubber as self-indulgently as you want.
        Embarrassing.

  5. PaulArt

    Putting Amar on TV was the best thing that could have happened to Jamie Dimon. Bhide has a seems to have a severe speech impediment is completely and utterly unprepared and stutters from one incomplete answer to another. Kudos to Bloomberg, I think Yves should have written an article of how the MSM uses incoherent academics like Bhide (Real News was like this a few months back until they asked their academics to clean up their act and be prepared when they faced the camera). Bhide is not incoherent per se but see what a meal the anchor makes of him purely because Bhide is unable to complete what he is saying and he is falling prey to this because he is unprepared, totally unprepared, he is talking ex-tempore which is an utterly dumbass thing to do. Academics it seems often fall prey to their ego in this fashion. They do a disservice to themselves and everyone one at large by this kind of faltering, stumbling mumbling presentation. Its not only bringing a knife to a gunfight but its also lugging a whetstone and then trying to sharpen your blade on the whetstone during the fight. Amazing bungling.

    1. readerOfTeaLeaves

      Completely disagree.
      The interviewer(s) came across as trivial newspeople who would have a hard time spotting an Orwellian phrase if it knocked them on their noses. They exhibited a mindset in which ‘profit’, no matter how it is made, is all: they appear to perpetuate ‘Orwellian’ newSpeak.

      I found the interviewers embarrassing, and obsessed with quarterly profits and conflicts over CIO reigns: in other words, capitalist courtiers who thoughtlessly support uphold the reigning kings and princes.

      Embarrassing.

      No wonder Amar Bhide was flummoxed; who wouldn’t be, when confronted with such trivial ditto heads?
      Yikies.

      1. readerOfTeaLeaves

        Oh, how I do wish Yves had an ‘edit’ function!

        “… who thoughtlessly support uphold the reigning kings and princes. ” should have been …support AND uphold…
        Meh.

      2. different clue

        I haven’t watched the interview. If Mr. Bhide was indeed flumoxed by trivial dittoheads, shouldn’t the TV facetime sector of the Academic Community realize that trivial dittoheads is part of the TV culture? And TV facetime preparation should involve training to handling the trivial dittoheads so as to not lose precious Facetime Seconds being flummoxed?

        In short, shouldn’t TV FaceTime academics begin to realize that they are soldiers in a long War of Extermination, and making themselves adequately prepared is their part in the ongoing Long War? (If indeed he was as flummoxed and stumbly at times as some people here say?)

      3. anon48

        The professor employed a poor analogy. It would have been Orwellian if it were a government official chanting the state’s version of reality. The JPM hearing was the exact opposite- a group of weak kneed weasel congressman not only afraid to challenge Dimon’s vision on any level, but by shamelessly participating in the circus by indulging Dimon’s opinion in an overly solicitous fashion.

        Orwellian? …the chronic problem in the financial industry is not a domineering, manipulative, overassertive government trying to control all aspects of a business sector, but instead, one that time and again has completely abdicated its responsibility to enforce the law. The Orwellian analogy is confusing because in this case it was the complete opposite of reality.

        1. Yves Smith Post author

          It might help if you’d listen to a video instead of going off half baked.

          The interview made clear that this was right BEFORE the Senate hearing and Bhide’s “Orwellian” comment was in response to Dimon’s WRITTEN testimony.

  6. Nowhuffo

    Could anyone tell me why Jamie Dimon released the news of the loss in the first place?

    1. different clue

      If such a loss would become known anyway after a while, perhaps he decided to get out ahead of the eventual story by
      revealing it his own self, so as to put his own pre-emptive spin on it?

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