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“Exile on Wall Street” author Mike Mayo on J.P. Morgan CEO Jamie Dimon’s testimony and the impact of regulations.
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JPMorgan Chase CEO Jamie Dimon testifying today about the bank's two billion dollar losses that's what we think they are.
Diamond getting into a heated exchange with a number of the senators joining is now.
Top banking analyst Mike Mayo of -- say also the author of the book X -- on Wall Street.
-- This was a humorous -- Today this attempted oversight.
It wasn't fair I mean diamonds and start class outsmarted and I'll.
-- outperformed.
Everybody on the committee what's the point that.
Well Jamie Dimon showed a lot of restraint today what he wanted to say.
This -- -- but he wanted to say was that two billion dollar loss.
Is nothing when you have a balance sheet of two trillion.
Dollars.
It's insignificant.
I think what he also wanted to say was.
Bausch and how much 2000000000002.
Point 32 trillion.
To what's -- two billion dollar loss that's like losing.
It two dollars B have a thousand dollars it's just.
I'm I'm I'm more likely look at the capital structure of the joint rather than assets but your point is still taken and the fact is that that none of the senators seemed as though they understood the difference.
Between capital and assets anyway.
I'm sure that's and correct I'm just talked about the way a number of -- particular senator Menendez for example perform he had no idea.
That that -- that.
The CEO of chase was talking we refer refer to regulation is on American.
He was talking about the banks hold.
There.
Capital requirements not.
Not Dodd-Frank I mean it was just a peculiar -- Knowledge -- There on the part of the committee I do think there's an issue here any issue is that some of the big banks.
Are too big to managed successfully and I would not put JPMorgan in that category.
That they've tripped a little bit in that direction Bank of America.
Citigroup.
They haven't made it in the major leagues for a long time they should be sent the minor -- And broken up into more manageable pieces because that's what's best for the shareholders.
-- -- the company.
Would be better off now I think its management over model to a certain point but this did expose -- crack.
In JPMorgan's model we can debate if it's worthy about from rational.
Yeah I think this is -- have to say.
And a delighted to save you.
It varies from month to month but I've also -- shareholder and each one of the banks should just mention I personally believe without question.
That there should be a manageable scale each of these institutions.
Let's go to Glass-Steagall do you think it would be a major part of the solution.
For this country.
And its banking system.
I are you willing to go their -- back in time.
I think the problem today as a relates to JPMorgan having deposits in excess of loans.
Would not be impacted by Glass-Steagall was not impacted by the bull run role it's not impacted by Dodd-Frank this is an issue that's its -- banking.
Banks have excess money.
Loan demand is very strong maybe even more excess money today and sometimes banks.
Invest that money and very risky ways happened actually two decades ago at a predecessor company of JPMorgan called bank one.
This is not new stuff so whether or not -- have these other rules the incentives need to be correct that's the.
Ever get up.
It -- I've heard stuff about incentives are currently alignment and I also look program of 700.
Trillion dollar derivative.
Our global economy I look at the country in the business sector.
That is and -- world that he is deleveraging.
That we are watching.
The fact is we're seeing quite a different force at work here and not many people -- taking note of it.
Is it decentralizing.
Isn't scaling down somewhat more intelligent more appropriate to the trends of the forces at work right now.
But we've seen here is this economies of scale and you see it in terms of the execution he sought.
It's for the large banks especially during the financial crisis we see this trouble to put revenues.
On that the table for the big banks this this going to be the worst.
Revenue decade for US banks of the decade of the Great Depression when you have that yet banks stretch for revenues but it and that global JPMorgan -- housing prices.
You're going to see more of that.
Veterans together a lot of different -- kind of institutions are you buyer of the banks honest seller big banks that's where we wanted to wrap it up I'd been a good.
