JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon addressed the lawsuit filed against the company last week by the New York attorney general when speaking at a Council on Foreign Relations event in Wasington, D.C. today. Dimon lashed out at the government for alleging Bear Stearn’s misdeeds prior to its acquisition by JPMorgan in 2008 were his company’s responsibility.
“I’m going to say we’ve lost $5 billion to $10 billion on various things related to Bear Stearns now. And yes, I put it in the unfair category,” Dimon said, noting JPMorgan did the Federal Reserve “a favor” by purchasing Bear Stearns, which is accused of deceiving investors when selling mortgage-backed securities in 2006 and 2007.
“We didn’t participate with the Federal Reserve, OK?” he said. “Let’s get this one exactly right. We were asked to do it. We did it at great risk to ourselves … Would I have done Bear Stearns again knowing what I know today? It’s real close.”
The federal government did, in fact, orchestrate the sale in early 2008, in hopes of calming the then-volatile market. In today’s comments, Dimon said he warned a senior regulator at the time, “Please take into consideration when you want to come after us down the road for something that Bear Stearns did, that JPMorgan was asked to do this by the federal government.”
In other comments, Dimon, who says he is “barely” still a Democrat and would not accept a cabinet position if one were offered to him, discussed the impending fiscal cliff’s impact on business and the economy. Dimon criticized legislators’ inability to negotiate an agreement which would avoid the fiscal cliff–$600 billion in spending cuts and tax hikes set to occur then end of this year.
“JPMorgan will survive a fiscal cliff—it is just terrible policy to allow it to get close,” he said.
Dimon said he supports and is willing to pay a higher individual tax rate, if corporate taxes are reduced so companies can better compete in the global economy.
“I don’t mind paying 39.6 percent in taxes,” he said.
In fact, Dimon stated were it not for the uncertainty surrounding taxes, monetary policy and the fiscal cliff, the U.S. economy would be in good shape, noting the U.S. remains a world power with the “widest, deepest, most transparent” markets, innovation and work ethic.
“We have this constant anti-business, not just sentiment, but regulatory, attorney generals…We’re shooting ourselves in the foot,” he said. “Get rid of that wet blanket and this thing will take off.”
Dimon also said at some point the U.S.’s borrowing capability will end, noting if Congress had acted on recommendations of the Simpson-Bowles deficit commission, “this economy would have been booming.”
“We are going to have fiscal discipline. It will either be imposed on us or we’ll do the right thing and do it ourselves the right way,” he said. “America knows the way, we don’t have the will… It’s still doable. We need the leaders to say ‘we are going to do it.’ ”
