Two things happened today in the Jamie Dimon hearing in front of Congress over the $2 billion loss (or is it $4 billion yet) for J.P. Morgan Chase & Co. (NYSE: JPM). The first thing is that he restored some faith and took the second or third step toward a long journey of restoring his reputation as the banking sector’s most credible giant. Secondly, and perhaps even more important for the global stock markets, is that Dimon took the focus off of Europe and the slowing growth of the BRIC nations. Perhaps a third benefit is that Dimon seemed to disarm every single criticism and attack today.
If you do not believe that Jamie Dimon won out today, you are fooling yourself. The market is a real-time voting machine and the market is saying that Jamie Dimon won at least this round of the fight. Banking shares rose handily yesterday ahead of this public hearing for the simple rationale that NOTHING WHATSOEVER WILL LIKELY COME FROM THIS HEARING! Here is how the money center and non-bank banks under the “too big to fail” umbrella were up yesterday in the last hour of trading and how they are up again today:
- J.P. Morgan shares was up 2.2% at $33.54 and shares are up another 3.2% at $34.87 right after 1 PM EST.
- Bank of America Corporation (NYSE: BAC) was up 2.2% at $7.45 and shares are up another 1% at $7.57 right after 1 PM EST.
- Citigroup, Inc. (NYSE: C) was up almost 4% at $27.52 and shares are up another 1.25% at $27.96 right after 1 PM EST.
- Wells Fargo & Company (NYSE: WFC) was up only 0.4% at $31.10 and shares are up another 1.9% at $31.91 right after 1 PM EST.
- The Goldman Sachs Group, Inc. (NYSE: GS) was up 1.1% at $93.81 and this is a laggard today since shares are down $0.02 on the day at $94.02 right after 1 PM EST.
- Morgan Stanley (NYSE: MS) was up almost 4% at $13.89 and shares are up only $0.03 at $13.96 right after 1 PM EST.
This situation over the London Whale is still not over even if Dimon won this round. Dimon has signaled that the banking giant is not out from under the entire situation yet and many firms (and trading partners) are on the other side of this trade.
JON C. OGG