Obama Endorses JPMorgan

"There are a lot of banks that are actually pretty well-managed -- JP Morgan being a good exampleI don't think [CEO Jamie Dimon] should be punished for doing a pretty good job managing an enormous portfolio."
--President Obama, yesterday

Aw, shucks, Mr. President. Just as the uproar over nationalization reaches epic proportions, you go and throw your support behind the nation's largest bank, JPMorgan Chase (NYSE: JPM  ) . Yesterday, Treasury Secretary Tim Geithner told Congress that, in light of the fragile state of financial markets, it was inappropriate to comment on any specific institution's health. I'm not a JPMorgan shareholder, but I'd imagine many of them would thank you for breaking that rule.

Well-deserved praise
The president is right, of course. Of the major banks, JPMorgan is the only one that still resembles a live, breathing, bank. Its two major competitors -- Citigroup (NYSE: C  ) and Bank of America (NYSE: BAC  ) -- are struggling to tread water. Of the three, JPMorgan is the only one that still pays a noteworthy dividend -- once the main appeal of bank stocks. The House of Morgan is down only 43% in the past year, while the other two have each plunged 87%. For shareholders -- and heck, taxpayers -- the difference is night and day.

But let's go back to the context on Obama's comment: CEO Jamie Dimon has been a bona fide rock star, and therefore doesn't deserve to be punished alongside his fail-happy peers. Sure, JPMorgan received $25 billion in TARP funds, but I'd throw it in the same pile as Wells Fargo (NYSE: WFC  ) : obliged to take money it probably didn't need.

So following Obama's logic that Dimon doesn't deserve punishment, does that mean Citigroup CEO Vikram Pandit and Bank of America CEO Ken Lewis -- along with countless other gainfully employed Wall Streeters -- do deserve punishment?

YES! WE! CAN!
I believe it does. If the president found it appropriate to point out Jamie Dimon's success by name, why not address individual failures in an equally specific fashion? Why not stand before the nation and call for Ken Lewis to step down? Or better yet, why not just fire him personally, like Ronald Reagan did to 11,000 unruly air-traffic control workers in 1981? Face it: These companies are all wards of the state. Uncle Sam is one of the largest stakeholders, if not the largest. If someone from the government found a reason to justify waterboarding, I think someone can find a legitimate reason to fire the CEO of a bank that has singlehandedly mugged taxpayers.

For related Foolishness:

Fool contributor Morgan Housel doesn't own shares in any of the companies mentioned in this article. JPMorgan Chase is a current and Bank of America a former Motley Fool Income Investor recommendation. The Motley Fool is investors writing for investors.


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  • Report this Comment On February 11, 2009, at 1:08 PM, RHaganC wrote:

    Who wouldn't bet on the Morgans? Look at their influence in the past. Gov't has turned to THEM (JP himself) to save the USs butt before.

    I don't see them going anywhere off a cliff anytime soon. They'd find a way to take the whole US with them if that was the case.

  • Report this Comment On February 11, 2009, at 2:21 PM, dockofthebay wrote:

    Obama's comment in praise of JPM was woefully off the mark. I have less confidence in him (and I voted for him) every day. Here is a statement made by F William Engdahl, in an article he wrote on oil politics in May of 2008:

    "Perhaps 60% of oil prices today pure speculation

    Goldman Sachs and Morgan Stanley today are the two leading energy trading firms in the United States. Citigroup and JP Morgan Chase are major players and fund numerous hedge funds as well who speculate. "

    .

    .

  • Report this Comment On February 11, 2009, at 7:13 PM, xetn wrote:

    What utter socialistic nonsense!. I think a better solutions is to fire government, since government was responsible for the meltdown. Government has made us all wards of the state and convinced almost everyone through regulation that you can just call uncle anytime you do stupid things and uncle will bail you out. If the c.e.o. of any company deserve to be fired, it is the shareholders' responsibility, not government. It would have been much better to just let these banks die; that would have been their punishment for mismanagement.

  • Report this Comment On February 11, 2009, at 7:18 PM, TMFHousel wrote:

    xetn,

    "If the c.e.o. of any company deserve to be fired, it is the shareholders' responsibility, not government."

    That was my point -- the government *is* the main shareholder now.

  • Report this Comment On February 12, 2009, at 4:09 AM, ElizabethStovall wrote:

    Who makes the decision to deposits consumer income tax earned deduction by the citizens of the United States in the JPM BANK? Check it out, The last refund check I recieved came from this bank. What about F.I.C.A.?

    Does JPM handle this account too? What kind of money does this bank donate to political campaigns ?

    "Transparency" is the " Buz" word here.

    Elizabeth Stovall

  • Report this Comment On February 12, 2009, at 2:28 PM, 1966boiler wrote:

    Follow the money.......

  • Report this Comment On February 14, 2009, at 10:01 AM, MedPeddler wrote:

    I'm not sure where JPM fits in, but 3 of Obama's 5 top donors were banks. The other two were universities. When government forces banks to take bailout money they don't need and then calls the shots on CEO pay, that is socialism, pure and simple. I thought all these government stakes were supposed to be non-voting anyway. Oh well, who needs shareholder rights when you have legislative fiat?

    When will America learn that government screws up whatever it touches? The USPS is projected to lose $6 billion this year. Amtrak loses every year. The House had to even shut down their cafeteria last year. With that kind of track record why NOT turn over control of our banking system to them? Does anyone else not see the irony in a bunch of people who have never sold anything, managed a bottom line, or created one single job telling US auto CEO's that their business models are failing?

    "I think a better solutions is to fire government, since government was responsible for the meltdown." Amen and amen. Thank goodness our country wasn't fought for or founded by people like the clowns we have in charge today. But then saying that gives clowns a bad name.

  • Report this Comment On February 14, 2009, at 1:50 PM, BillZe wrote:

    “If there is one thing we’ve learned from history is that we haven’t learned anything at all. “

    Watching the giddy news media salivating over this stimulus package being rammed down our throats and watching the gaggle of bird brains in Washington all smiles and talking it up I feel I need a gynecologist. I feel I have been gang raped and may by pregnant by these s.o.b.s.

    Japan tried to spend their way out and suffered through 10 years of economic stagflation but the brains in Washington know better…. Right!

  • Report this Comment On February 14, 2009, at 2:13 PM, USAeconomist wrote:

    The banking industry is on the verge of a meltdown. Look at the numbers: http://wethepeopleoftheunitedstatesofamerica.com/bank_failur.... These numbers don’t include tarp funds. Banks are failing at record levels. The FDIC is having troubles managing the failure rate the federal government knows that it has to step in to prevent a total collapse. In January the FDIC shut down the Magnet Bank in Salt Lake City, UT. For the first time the FDIC was unable to find another financial institution to take over the banking operations so the FDIC has sent checks to the retail depositors for their insured funds. 23 banks failed in 2008 and 13 banks have already failed in 2009. The failure rate is increasing exponentially. In order for banks to survive they have to lend, they have to have customers. The only potential to profit in the consumer market is refinancing. Banks are offering lower rates with high fees and interest buy downs to the most qualified borrowers.

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