Jamie Dimon is really sorry that his bank invested too heavily in Italian leather laptop tote bags, and though he's said as much many times since the world learned that JP Morgan lost $2 billion, he'll likely have to bust out his gilded apology-kneepads at the bank's annual shareholders meeting today in Tampa. The Times reports that despite the official line that the chief investment office alone got out of hand in ramping up riskier, high-yield trades, former and current employees describe an "increased appetite" for those trades by the bank's "upper echelons." Presumably the paper is referring to the top-secret memo from Dimon to his deputies entitled, "Braaaaiinnnss."
In a scandal that involves inscrutable risk models and esoteric jargon, we tend to latch on to the poetic: the "London Whale" at the helm, for instance, whose trades were so massive they could move markets. And the ascot-wrenching name of Achilles Macris, the head of the bank's Europe trading desk, who used friendly risk officers to assure the higher-ups that the Whale's trades were on the up-and-up. Look for Achilles & The Whale to win next year's Caldecott Medal.
But according to David Olson, who ran credit trading for JP Morgan's chief investment office until December “the management was very involved and the risk controls were very strong”during his tenure there. So perhaps the only goofy-named scapegoat we should be talking about is "Dimon."
Andrew Ross Sorkin describes why the blow to banks' egos is more important than the $2 billion in losses:
The reason that JPMorgan’s loss matters at all is the larger context: if this bank, known for being the best risk manager on Wall Street, could lose this amount of money on a bad trade, what about other firms?