Tuesday, June 26, 2012

As Dimon Speaks, Street Says ‘It Could be Worse’

Every time JPMorgan Chase (JPM) Jamie Dimon speaks before Congress, the company’s stock goes up. Today he’s appearing before a House committee, and shares are up 2.3%. This could be a fluke — there’s other good news out there today regarding bank stocks and the overall market is up — but it certainly indicates that investors aren’t too worried about what questions the representatives might ask.

Meredith Whitney, who knows a thing or two about being on the top and then the bottom of the world, told Bloomberg TV today that Dimon is parrying this issue well — in fact, he’s doing even better than that.

“He had a couple tough questions, but he is, like nobody else, the antithesis of [Goldman Sachs CEO Lloyd] Blankfein,” she told Bloomberg TV. “He charms. He�s incredible. He gave the senators a massage and they gave him a massage back. You see a complete juxtaposition between the two, and it’s theater�I think what you saw last week is everybody’s trying to argue for, oh, JPMorgan, come rebuild your branches in our hometowns and create jobs. As we said, it’s political theater.”

That’s not to say Dimon has nothing to explain — Whitney is convinced that some of JPM’s complicated “hedging” trades were really proprietary trading. “I don’t think it’s been explained well at all�Hedging for credit and to take such a disproportionately weighted bet seems curious to me.”

Evercore analyst Andrew Marquardt also noted that the Fed has been examining whether JP Morgan’s other units as just as vulnerable as the company’s chief investment office. So far, they haven’t found anything, Fed General Counsel Scott Alvarez noted in a statement to be delivered today.

Marquardt sees it as an “incremental positive that no evidence [has been] found yet.”

To watch the hearings live, go to C-Span or check out the Wall Street Journal live-blog.

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