Yesterday’s JPMorgan shareholders meeting was “pretty tense”, according to Lisa Lindsley who attended the meeting in Tampa. Lindsley is the director of capital strategies at the American Federation of State, County and Municipal Employees pension plan.
In a radio interview with me yesterday Lindsley said that it was obvious that the JPMorgan people clearly wanted to get the meeting over quickly. Jamie Dimon, the CEO and chairman of the Board of JPMorgan, rushed almost unintelligibly through his prepared remarks regarding the recently acknowledged $2 billion plus loss at his company.
The pressure on Dimon showed when he was directly asked at the meeting about his and JPMorgan’s lobbying against the Volcker Rule that might have prevented the risky trading that led to the $2 billion loss. According to Lindsley, Dimon was quite condescending telling the person that he would send him his shareholder letters from the past few years that the commenter obviously hadn’t read or he would understand.
On another important issue, Lindsley’s union had filed a proposal last fall for JPMorgan to have an independent board chairman. If the shareholders agreed with the proposal, Dimon would have to give up either the chairmanship of the board or CEO position. That proposal was voted down 60%-40%.
But in addition to these duel positions held by Dimon, he also serves as a director at the Federal Reserve of New York. Senatorial candidate Elizabeth Warren and Vermont Senator Bernie Sanders have both called on Dimon to resign from the New York Fed. At yesterday’s meeting one commentator addressed that issue. He said that as a director of the Federal Reserve of New York and JPMorgan board chairman, Dimon was his own boss and his own regulator….that’s pretty sweet.
Dimon’s response was that the New York Fed is only advisory and doesn’t make policy decisions.
But isn’t that the point. He is advising the Fed that makes the regulations to carry out the Dodd-Frank Financial Reform Act including the Volcker rule that Dimon has lobbied against. Clearly Dimon and his company are only interested in promoting their own profit, not what is in the best interest of the country.
And I’m willing to bet that another bad Federal Reserve decision recently was also recommend by Dimon. Chinese government-owned banks have been approved to do business in the U.S. As I mentioned in my blog last Friday, China already owns much of our nation’s debt and its businesses are bidding successfully for public project works here. Add to that China holding the loans and lines of credit to our country’s small businesses because our domestic banks won’t lend is a recipe for a perilous future for America.
So why did the Fed open the doors to China’s banks? Because our big banks want China to give them more access to investing in Chinese banks in order to gain access to China’s consumers. It was a tradeoff that Scott Talbott, head lobbyist for the Financial Services Roundtable, said would “benefit the U.S.”
This isn’t about benefitting our country. It is about benefitting the profit greed of the big banks like JPMorgan, their CEOs and shareholders. There doesn’t appear to have been any calculation by the Fed about the other potential impacts on our economy by having the Chinese government being able to undercut our local community banks and call loans and credit lines of our small businesses whenever they want for whatever reason. And with China now ready to become a player in U.S. banking, how soon will they be influencing other Federal Reserve decisions?
The long-term consequence of the Fed’s decision to allow China to put its nose under our private financial institutions’ tent has enormous risks for our country. But what the hell, at least JPMorgan and its ilk can make some good short-term profits and bonuses.