Because J.P. Morgan didn’t nearly go under during the financial crisis, Dimon has used whatever implied clout that distinction carries as a bully pulpit. He’s railed against regulation. He stood before Ben Bernanke and suggested the Fed chairman might strangle the economy with bank rules.
Dimon, when asked about a new set of rules in the Dodd-Frank Act, said Paul Volcker didn’t “understand the markets.”
Volcker is too dignified to say “I told you so,” but I’m not. Volcker knows more about the markets, not because he’s astute to the daily gyrations, but because he recognizes that the system is so far beyond the ability of any individual or institution to understand or manage.
Dimon’s problem — and this one goes way back — is that he is almost always the smartest guy in the room, and he knows it.
But something has happened along the way. The financial system that Dimon and his Wall Street counterparts built became too big to be controlled, much less understood.
Spot on. The situation is far more terrifying than simple investors and regulators not knowing what is going on inside these black boxes. It is that those running the black boxes have no idea.