My friend, Gerry, has this great capacity (and propensity) to be a pain in the butt. He doesn't have much to do, doesn't want to do anything, has too much money to worry about much of anything and therefore has huge amounts of time on his hands to make life miserable for everyone else, especially me. So it wasn't a surprise that this E-Mail arrives this morning beginning with, "Nice try, Butt-Head, but you left out a couple of things." Oh, did I mention that Gerry is almost always right? Well, he is and today was no exception.
The Tale of the Whale has a couple of other chapters that I didn't write about which Gerry, of course, picked up and with great glee shared with me. He accurately pointed out that in addition to the situation at JPM described yesterday and to which he agrees, there were at least two major structural deficiencies I neglected to point out. First, it appears that the Investment unit, or CIO in Morgan terms, had its own compliance unit, reporting to the head of the CIO. At the very least this is not what one would call "best practices," but the mere fact that it reported as such need not be a major event-shaper. I knew of the existence of this structure but placed little importance on it which is why it went unmentioned. Perhaps, as Gerry "suggests" more coverage should have been given. He's probably right and for the oversight, I apologize.
What I did miss, however, was far more serious: Within the CIO, the head of risk management reported to the head of CIO. In other words, the Hen Keeper was reporting to the Fox. This is a major failure on the part of Morgan's senior management and should properly fall at the feet of Dimon and his Lieutenants. The house cleaning that has occurred indicates that Jamie and the Board learned the lesson...of course the tuition was $6.5 Billion but hey, it was worth it. And as for me, My week-end shall be spent in embarrassed seclusion, thinking evil thoughts and plotting revenge...along with a firm determination to do better.
If you missed it--and you probably did--there was a very important decision handed down today buy the Court of Appeals for the D.C. Circuit involving the so called "Recess Appointments" made by The Leader to the National Labor Relations Board. There are certain positions that must be approved by the Senate before an individual is confirmed to the post and a member of the NLRB is one. The President, when the Senate is nor in session may make what is known as a "Recess Appointment, good until the sitting of a new Congress. The argument here was whether the Senate was in recess as claimed by The Leader or in continuous session. The fact ruling in the lower court that the appointment were unconstitutional was affirmed by the D.C. Circuit.
So who cares, you ask? Well, not me, BUT there is another case being heard relating to Richard Cordray, the recess appointee to the position of head of the Consumer Protection Bureau, set up under Dode/Frank and organized by crazy Lizzy Warren who, having not a chance of being confirmed, runs for the Senate and wins which means she'll have less opportunity to make a meal out of things than she would in this position which, as designed, reports to no one. Enter Cordray, one step removed from a political hack, placed in office as a recess appointment but under the same set of circumstances as the NLRB 3. That appointment is presently under judicial review and will probably be torn down as well. Bye, bye Cordray who will never be confirmed as well. Both cases will be appealed to the Supremes and if taken up will no doubt be affirmed, IMHO. Delicious. We now have this insane piece of crap legislation rudderless, meaning who knows what happens. However, if The Leader and his mob continues to act in this fashion (see: "Don't Need No Damn Constitution") more of this is going to occur. Guys, we don't need it.
Over There, the leaders are on their way home from Davos having accomplished nothing...or is it not having accomplished anything? Probably the latter. Could have done as much here, in the fly-over zone. Same cold temperatures, same snow, waaaaay cheaper. See you next year? And as for you, Gerry, thanks for making my weekend.
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