The Great Debate UK
from Reuters Investigates:
The U.S. mortgage business is a “mess” in need of overhaul, JPMorgan Chief Executive Jamie Dimon reckons.
(See our special report on Dimon today: "Jamie Dimon wants some R-E-S-P-E-C-T")
Of course, his own bank is the third-largest U.S. mortgage lender. And JPMorgan is sitting on billions in not just prime mortgages, but risky home-equity loans too.
But Dimon has made a career out of being the one Wall Street banker who likes to stand up, stick up for his views and tell it as he sees it. He can talk in a way that resonates with the mood of the country. He can cross the divide between Wall Street and Washington D.C. And while his peers might talk about doing God’s work, Dimon will admit making mistakes.
The thing is, when you scratch the surface at JPMorgan, the bank doesn’t seem so different from its peers, with large consumer loan exposure and sometimes questionable business decisions. So what do you think? Does Dimon deserve your R-E-S-P-E-C-T?
Imagine a world where bankers are paid according to their actual efforts. A judge in Australia has brought that fantasy a little closer, by denying JPMorgan A$31 million ($28.6 million) of fees it claimed for defending a company from a takeover that turned into a bidding war. But the implied logic -- that advisers should get paid for what they did, not for what eventually happened -- is fuzzy.
Granted, it is hard to argue that the eventual A$1.3 billion purchase price for Consolidated Minerals, JPMorgan's client, was entirely the result of the bank's labors. Rising metal prices and some exuberant competing bidders played their part too.
Jamie Dimon needs an even better post-crisis. The JPMorgan boss runs one of the only major U.S. banks not to post a quarterly loss during the crash. And he has maneuvered his firm into a strong position to grow as the economy rebounds. But investors don't yet seem persuaded.
The shares have been stuck trading around book value, or assets less liabilities, since last summer. Put in perspective, that's not all bad. They had tumbled to less than half that in the depths of the crisis. But to price the bank now at only a fraction more than break-up value seems overly cautious. Another crisis outperformer, Wells Fargo, by comparison, trades at 1.4 times book.
The U.S. economy isn't giving dentists many reasons to smile yet, an annual survey of the profession by JPMorgan has found.
84 percent of dentists said the economy was having a negative or strongly negative impact on their practices.
74 percent said they think the economy will continue to weigh on their businesses 12 months out.
There's lots of money sloshing around the financial system these days. The Federal Reserve has established a target range of 0-0.25 percent for its key rate, bringing it closer to unconventional action to lift the economy out of a year-long recession.
From Washington, the first package aimed at rescuing the credit crisis-hit banking sector amounted to $700 billion. Treasury can use only half of that amount and it has already pledged all but $15 billion of it. The Senate has refused to pass a $14 billion rescue package for Detroit's three major car companies last week, leaving it in the hands of the Bush administration to work out a deal.