Follow The Money

How did JPMorgan Chase lose $2 billion in assets in risky trading? Why did it even take the risk? Didn't Wall Street learn anything after the financial crisis of 2008?

The answer to the latter question has to be no, and congressional Republicans are only more entrenched in opposition to financial reform, claiming that it would stifle community banks' ability to lend money.  Senator Bob Corker, a Tennessee Republican, has said that he would like to "rewrite" (i.e., gut) the Dodd-Frank Act that sets up financial regulation in response to that "concern."  But I don't believe that overregulation of small banks is the problem here.

President Obama has tried to have it both ways, calling for financial reform to be implemented even while praising JPMorgan Chase CEO Jamie Dimon as talented executive who's one of the most qualified bankers on Wall Street.  Obama says that even a skillful banker like Dimon can make mistakes, and financial regulation is meant to minimize the risk of more scrupulous transactions even while cracking down on less scrupulous ones.  But his statement stills sounds politically motivated for both sides.

Meanwhile, a federal investigation of the $2 billion loss is underway, and although Dimon won a vote of confidence among JPMorgan shareholders - most of those votes were cast before the loss was reported  - they were plenty angry about the loss at the shareholders' convention in Tampa this week.  This story is going to go on for awhile.