JPMorgan (JPM) CEO Jamie Dimon is slated to appear on the Hill Wednesday in a much-anticipated hearing before the Senate Banking Committee to answer questions about the firm's shocking $2-$3 billion trading loss which came to light May 10.
Even before Dimon testifies, Wall Street is rushing to his side in defense of what he has himself called a "self-inflicted" wound.
Blackstone CEO Stephen Schwarzman says "occasional losses are inevitable," reports Bloomberg. "Publicly excoriating JPMorgan serves no purpose except to reduce people's confidence in the financial system."
According to the same story, former Goldman Sachs (GS) Co-Chairman Bill Archer says of the trade: "I kind of shrug [at the loss]…. That's just the way the world is."
And then there is the chairman of the New York Fed's board of directors, Lee Bollinger. He says Dimon has every right to sit on the board even though there have been myriad calls for Dimon to resign due to conflicts of interest. Why the calls for him to step down? Regional Fed banks are responsible for setting bank regulation, which Dimon has lobbied strongly against.
"I do not think he should step down," said Bollinger in an interview with the Wall Street Journal. He went on to say that those seeking Dimon's resignation from the NY Fed board — most notably former acting head of the Consumer Finance Protection Bureau Elizabeth Warren and Senator Bernie Sanders — are "foolish." Bollinger said these critics want Dimon to step aside because they have a "false understanding" of financial markets.
The Daily Ticker's Aaron Task and Henry Blodget are not surprised by the support Dimon is receiving from his banking buddies. Both are appalled that banks can still roll the dice with taxpayer money after the financial crisis of 2008.
"I am all for letting banks take as much risk as they want," says Henry. "But I just want a system in place for when they do ... blow themselves up there is a mechanism for taking it over without taxpayers taking any risk at all."
Since JPMorgan's announcement of the loss last month, the bank's stock has tumbled 25%.
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