“The United States of America is truly an exceptional country,” says controversial JPMorgan Chase CEO Jamie Dimon, “but it is clear that something is wrong — and it’s holding us back.” Dimon’s annual letter to shareholders identifies some of the things that are wrong and suggests ways to fix them.
Dimon is controversial simply because he headed one of the nation’s leading banks at the time of the 2008 mortgage crisis, yet to the Antiplanner he was one of the heroes of that crisis. The mortgage bond market was invented by JPMorgan, but when Dimon became CEO he recognized the market wasn’t viable and ordered the bank to stop trading such bonds. When Bear Stearns and Washington Mutual went broke because of their heavy involvement in such bonds, it could have precipitated a major financial crisis, and Dimon agreed to take over those banks to avoid that crisis
Such takeovers are the standard way the U.S. government has dealt with failing banks, and they are not a gift to the banks doing the takeovers. The banks agree to accept the defunct banks’ assets and (much larger) liabilities in order to keep the monetary system going as well as to save the Federal Deposit Insurance Corporation billions of dollars it would have to spend paying off insured depositers.
