Jamie Dimon: Don’t be hatin’ on bankers when it’s all YOUR fault!



The following article is brought to you by Karoli at CrooksandLiars.Com.

Jamie Dimon kicked off his Sunday morning appearance on Fareed Zakaria’s show with a bit of whine about how mean, mean, mean we all are to bankers. He kicks things right off by blaming the victims:

DIMON: OK. In the United States of America, only one-third of credit is provided by banks. Bank lending actually went up after Lehman Brothers failed, not down. It’s a huge misconception. Two- thirds of credit is provided by individuals, corporations, pension plans, you know, et cetera. The huge reduction in credit supplied was the credit supplied in directly to the marketplace. In fact, if you go to any place around the world, you ask people, did you do something more conservative with your money after Lehman went down? Which everyone says, yes.

I would say, well, you caused the crisis. You got scared. You ran. It’s perfectly legitimate as an individual protecting yourself. And JPMorgan last year lent or financed $1.4 trillion for corporations, individual around the world, up pretty substantially from the year before and I believe substantially from the year before that.

Really, Jamie Dimon? REALLY? We caused the crisis how? Were we the ones playing high stakes games with mortgages, lending money to people based on fraudulent, jacked up valuations and credit histories and then selling them off to the likes of YOU to gamble? Um no. Not so much.

Funny how the story changes. When he testified before the Financial Crisis Inquiry Commission, he said this:

“Reflecting on the causes of the crisis, Jamie Dimon, CEO of JPMorgan testified to the FCIC, “I blame the management teams 100% and…no one else. (Page 18)”

Or here, where he realizes what gambling with those brokered subprime loans cost JP Morgan (Page 91):

“JP Morgan CEO Jamie Dimon testified to the FCIC that his firm eventually ended its [mortgage] broker-originated business in 2009 after discovering the loans had more than twice the losses of the loans that JP Morgan itself originated.”

Of course, 2009 was too late. Everything had gone to hell in handbasket by then, so rippy-rah-hoo for Jamie Dimon’s stellar fiduciary standards.

Or here, where he’s talking about how they were shocked — SHOCKED — to discover that home prices just don’t keep rising when markets collapse (Page 111):

“Jamie Dimon…told the Commission, ‘In mortgage underwriting, somehow we just missed, you know, that home prices don’t go up forever and that it’s not sufficient to have stated income.”

Gosh darn it. They just “missed it.” Really. Well, here’s what the FCIC had to say about that (page 111):

In the end, companies in subprime and Alt-A mortgages had, in essence, placed all their chips on black: they were betting that home prices would never stop rising. This was the only scenario that would keep the mortgage machine humming…”

They needed to keep that mortgage machine humming to stuff their pockets full of money, of course. FCIC report, page 113:

“For commercial banks such as Citigroup, warehouse lending was a multibillion-dollar business. From 2000 to 2010, Citigroup made available at any one time as much as $7 billion in warehouse lines of credit to mortgage originators…”

And finally, another example of self-confessed cluelessness (page 295):

Before Bear’s collapse, the market had not really understood the colossal exposures that the tri-party repo market created for these clearing banks…In an interview with the FCIC, Dimon said that he had not become fully aware of the risks stemming from his bank’s tri-party repo clearing business until the Bear crisis in 2008.

The report goes on to say that once Dimon and his cohorts realized what their exposure was, they put the squeeze on tri-party repo borrowers by forcing them to overcollateralize, which left them with less to lend, which poured down on businesses, and individuals, and anyone else who might have needed to borrow money.

But hey, it’s all our fault because we didn’t really like losing nearly half of what we had in investments we thought were “safe”. Way to state it there, Jamie.

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