Felix Salmon

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Jamie Dimon appeared before Congress once again today to talk about JPMorgan’s multibillion-dollar hedging losses. (Here’s our take on Dimon’s first round.) Appearing this time before the House Financial Services Committee, Dimon faced tougher, if equally confusing, questions.

The regulators came first, in the form of the heads of the CFTC, FDIC, OCC and SEC; you can read Reuters’ wrap of the hearing here. Then came Dimon. Here’s our own Q&A of his appearance, with all credit due to the twittersphere.

JPMorgan’s botched hedges could lose it up to $5 billion. Could the losses have been much bigger still? Like, two orders of magnitude bigger?

Dimon says only way JPM loses half a trillion dollars is if the earth “is hit by a moon.”

– Damian Paletta (@damianpaletta) June 19, 2012

Were those traders in London just gambling with JPMorgan’s money?

Ackerman: “Is gambling investing?” Dimon: “No, in gambling the house wins.” Ackerman: “That’s been my experience in investing” – David Dayen (@ddayen) June 19, 2012

Can Dimon justify the $14 billion per year that JPMorgan saves by having an ultra-low cost of funds thanks to its too-big-to-fail status?

Dimon: we pay the same for retail deposits as anybody else. But those are FDIC insured! That’s not where the cost-of-funds advantage lies. – felix salmon (@felixsalmon) June 19, 2012

Dimon: “No we are not too big to fail” – Counterparties (@counterparties) June 19, 2012

How did the regulators miss all this?

Wowzers. OCC can’t say name of person on site in charge of watching JPM’s CIO trades. – Ben White (@morningmoneyben) June 19, 2012

Couldn’t they have seen that whopping-great $100 billion derivatives position?

Big rant about how I can’t believe the regulators missed JPM’s CDXNAIG9 position out of my system… ftalphaville.ft.com/blog/2012/06/1… [exhales] – Lisa S Pollack (@LSPollack) June 19, 2012

Or is the problem that Dimon sits on the board of the NY Fed, one of his main regulators? That’s a conflict, no?

Good gig: Dimon says NY Fed board “basically sits around and talks about the economy.” – Pedro da Costa (@pdacosta) June 19, 2012

Did JPMorgan’s compensation structure push employees to take outsize risks? Ousted head of the CIO office Ina Drew earned more than $15 million last year, after all.

LOL.Dimon once again essentially claims that Ina Drew’s $15mm CIO salary influenced by recruitment and mentoring. – Neil Barofsky (@neilbarofsky) June 19, 2012

But at least the questions have been smart and well-informed, right?

Quote of the Day: Rep Gary Ackerman of NY to $JPM Jamie Dimon “What’s this hedging and wedging thing anyway?” – Adam Johnson (@AJInsight) June 19, 2012

Anything else you’d like to say, Mr. Dimon?

Jamie Dimon: “We want to get it right so it works for America” — Counterparties (@counterparties) June 19, 2012

Dimon: “Lobbying is a constitutional right”

— Counterparties (@counterparties) June 19, 2012

– Ryan McCarthy

On to today’s links:

EU Mess
Spain is doomed, in three charts – WashPo
EU official: It’s “delusional” to think we won’t need to renegotiate the terms of the Greek bailout – Reuters

Interesting
Austerity hasn’t really paid off – just ask the bond market – Bloomberg
Sovereign ratings aren’t very important – Felix

Economy
It’s time to stop using jobs data as a “month-by-month panic- or joy-inducing catalyst” – NYT
When the economy is “stuck in the mud, austerity just digs it in deeper” – Rolling Stone

The Fed
“If you don’t need the money, you can get it all day long. Thank you, Ben Bernanke.” – WSJ
What the Fed can do to save the US economy – Dean Baker

Gadgetry
“For the first time in its history, Microsoft is taking PC hardware as seriously as it does software” – Slate
How to write Microsoft Surface press release: Take an iPad press release and fill it with bland corporate-speak – Rex Hammock

Not That Reassuring
In the future, Spanish streets will be paved with coupons – Fast Company

Old Normal
Did medieval England have stronger economic incentives than modern high-income economies? – Marginal Revolution

New Normal
America’s “disconnected”: Families fall through the cracks as states slash welfare – Huffington Post

Profiles in Pessimism
The EU crisis has its own Dr Doom and his name is Mark Grant – NYT

Bubbly
Had his cake, didn’t want to tweet it too: Man has $1.4 million Marie Antoinette-themed party and tries to keep it secret – Business Insider

Oxpeckers
Woodward & Bernstein were no Woodward & Bernstein – Gawker

Tax Arcana
The IRS whistleblower program has paid out just 3 awards from 1,300 claims – Bloomberg