Tag Archives: JP Morgan Chase

Jamie Dimon Wasting Time In Front Of Senate Banking Committee

Today’s event of the day in the business and financial world was certainly JP Morgan’s Jamie Dimon reporting in D.C. to the Senate Banking Committee. A lot of people have probably expected something special coming out of this hearing. Watching and listening to it, from my view, the hearing was for the most part a waste of time. While the committee has the need to demonstrate that they do something, the hearing didn’t really bring this over. It is obvious that many people on this committee actually don’t even understand what this is about and what is discussed, and much more, what Dimon says in his response.

From Dimon’s view, it must be a waste of time. He has to run the biggest bank around and has a schedule that stretches over months. Understandable that at some point in this hearing he was annoyed and bored. It sure is difficult to keep quite when listening to lawmakers that read their questions from paper, word by word. Respect Jamie Dimon, for staying cool.

What do we take from this? In my opinion, the most remarkable statement Dimon made, was the one when he agreed that we need strong regulation and not more regulation. With that statement he stepped on the toes of both parties. Jamie Dimon stated that we have missed out to fix a few holes over time. If this will put a different light on the regulation discussion has to be seen. Dimon’s colleagues from other banks, industry and political lobbyists will probably not like that statement and will try to twist and turn things so that it is fitting the political agenda and pocket.

While many want to undo deregulation, others want to loosen up or at least leave regulation as it is. The problem is, as the past and the newest JP Morgan case show, regulations are clearly not good enough and in some cases make no sense at all. The problem was obviously caused at the time when the financial industry was deregulated in 1999. While deregulation took place, the rules and regulations for the most part were never adjusted to the new circumstances and the new players at the table. With the political stalemate in D.C. and elections in November, it will be some time until something happens, if at all. Until then we will have to calculate in that at any time someone might gamble the house, or the country, away.

Facebook’s unfortunate IPO – Wall Street in the middle of it, again.

Three days into trading as a public company it is time to take a look at one of the most anticipated IPO’s the world has ever seen. To summarize it right at the beginning, it was and is a huge mess and it is not very short of an embarrassment for those involved.

Let’s not waste to much time on the technical issues, even though it is fair to say that NASDAQ didn’t convince the world with their performance. However, that doesn’t increase the value of Facebook and its current capabilities. While over the past weeks and before the IPO there was a huge hype about Facebook, besides of the fact that they went public there is really not much to be enthusiastic about. That counts for the short and mid term. What happens in the long term, 2 to 5 years, nobody knows. As it turned out, this wasn’t unknown by the underwriters of the IPO, Morgan Stanley, JP Morgan Chase and Goldman, who had information about downward revenue correction for the rest of the year. That the information wasn’t published during the entire hype has the easy reason that they all wanted to make their money.  This seems not to be a problem with the current regulations, but this is an entire different problem.

Sure the circulating number of 900 million users is enormous, but honestly, I don’t buy into that. In my opinion that is in no way the number of single active users. I just don’t believe it.  I believe that this number includes double and triple profiles and a huge number of inactive users. I would even go so far and claim that at least two thirds of that huge user number is absolutely useless for Facebook’s business model. In other words, the majority of users is not at all interested in advertising on the platform or has no technical ability to see the ads. Continue reading