Well, good morning and welcome once again to your Sunday morning chronicle of quickly typed reactions to stuff that happens on political prattle shows. My name is Jason. Happy Mothers day, to you all. Right off the bat, we have to hand it to Meet The Press, who last week actually managed to do something rare -- it had a moment of far-reaching relevance that actually impacted the world of politics. This is the Sunday Morning teevee equivalent of the "Miracle On Ice."
But hey, Joe Biden, out there, speaking his mind on marriage equality got a little idea snowballing, and pretty soon, the White House was abandoning whatever coldly calculated same-sex marriage rollout they had planned and President Obama was like, check it: now I am for this stuff, too. Okay! That was midway through the week, and I don't even know why other news was even trying to happen that day. Sorry, other news! We are going to all ride this Obama-is-for-marriage-equality pony until it gives out from exhaustion.
Of course, the being-for-a-thing is swell, and all. But it's possible to get overexcited. After all, the President cosigning marriage equality doesn't advance any policy or reverse any ban, and while the jury is going to be out for a while on this, it could even end up costing the President some crucial electoral votes. (For that reason, the decision to conclude his "evolution" might be deemed somewhat courageous.) But I have a feeling that we'll be talking about this issue all day today. (Know how I know this? Gavin Newsom is booked on Meet The Press, today.)
Anyway, y'all know what to do: crawl back into bed or go to church or brunch and let me HANDLE this. Meanwhile, you may also spend some time conversing in the comments, drop me a line, or follow me on Twitter, for other things.
FOX NEWS SUNDAY
Okay, well, we're mixing things up today on FNS. Shannon Bream is here, instead of Chris Wallace, and we're going to be talking with Dianne Feinstein about national security and John Thune about...being handsome and running for President for a minute. Plus paneling. Sweet numnums, the paneling!
But first, hey, we blocked some terrorist attack from Yemen, and DiFi is here to explain it to us. Yemen, by the way, is the hot new place to be a terrorist? Afghanistan is yesterday's news, dude. Time to start getting in on these boss terror timeshares in Zinjibar. DiFI says that AQAP -- that's "al Qaeda on the Arabian Peninsula" if you are nasty (or a cartographer) -- is the number one threat to the United States. Time was that "I'm going to Yemen" was a joke on the show FRIENDS. Now, Chandler Bing goes to Yemen to start jihad!
Anyway, a bomb was recovered, and this is an "impressive victory" and a "substantial win" for the CIA, but we've got to "end this now" because it could get "complicated." Oh, hey, nice to know things aren't complicated yet. It's just a SIMPLE matter of needing a whole new war in a whole other part of the world than the one in which we are already fighting out exhausting, endless war.
But all of this "news' comes in the form of a "leak," and so there's a "big" investigation going on now to catch the leaker. DiFi says that the leak came to an AP reporter, and the story was held for a period of time after officials asked. "The leak," DiFi says, "really did disrupt sources and methods," and she says someone will get prosecuted. If you can catch me! I mean...If you can catch them!
So, are we going to catch underwear bombs, ever? DiFi says that the bomb material is hard to detect and when you keep this junk in their drawers, it's not easy to discover during a pat down. The TSA, DiFi says, has to learn and adapt. What will probably happen is that we'll all have to travel in jumpsuits that give the TSA easy access to our taints, I'm guessing.
DiFi says that in Dubai, there is a "big patdown." They are just very handsy, there. The Herman Cain of airport security.
DiFi is hopeful that we kill this particular bombmaker, and his associates, because who will make bombs then? No one, probably.
Moving toward Afghanistan, DiFi says that what the Taliban has done is expand their "shadowy presence" as a governing entity, and now they are moving into the Northeast and are essentially running things. And killing people! "This demonstrates that the Taliban are just waiting to come back," DiFi says. She goes on to add that most people in the Karzai government obviously oppose the Taliban, but they are strong in various areas. And they are making mad bank of opium, as well. This is why we probably aren't actually pulling out of Afghanistan in 2014. DiFi says that the "key to Afghanistan is action by Pakistan," and yeah, that makes 2014 unlikely, too.
Still, DiFi is positive that we will make our timeline, and she has two reasons why she thinks that and neither is "she's crazy, like, down to the bones crazy, jittering and shivering and talking straight nonsense." No. Actually, she says that we're apparently making very good progress on training Afghan security forces, and these forces are "in the lead in many missions." Also, DiFi says, there are schoolgirls going to school without acid being thrown in their face. So, remember, you're junior high school experience probably wasn't the worst thing in the world.
Moving to marriage equality, now. Has Obama flip-flopped? DiFi says that he hasn't flip-flopped and that there is "no political calculus in this." Ha ha ha. Yes. But DiFi goes on to basically say that the more you get to meet members of the LGBT community, the more your views change and prejudices disappear.
Moving to Jamie Dimon, who got caught in the deep end of the derivative market after telling everyone he didn't need a liferguard, and ended up losing $2 billion on some ill-advised prop bets. Loser! Should Washington get involved, though? DiFi says that JPM getting into this hedge trouble was a surprise, and a "danger signal" that various rules need to get set.
DiFi then goes on to explain how budgets and allocations work in the Senate.
Next, John Thune, who Bream assures me is "one of the most mentioned names in the Veepstakes." Who is mentioning this?
At any rate, Thune is live from whatever Fox studio is lit to make it look like a white-hot beam of light is being projected onto the subjects face from the direction of his crotch.
We begin with JP Morgan's big losses, because Thune voted against Dodd-Frank and wants it repealed. (This, despite the fact that Dodd-Frank was pretty toothless.) Thune says that "we don't know all the facts" about JPM's big fail. Thune says that his problem with Dodd-Frank is with the "compliance burdens" it puts on small banks. He goes on to say that JPM's losses do suggest that we need "some safeguards in place." (He also reckons that regulators need to fully interpret and implement Dodd-Frank, which he is trying to repeal?)
Moving to gay marriage -- which, in some polls, seems to be beneficial to the President. Bream notes that Thune has obviously endorsed Romney who has obviously endorsed the idea of marriage being between a man and a woman. What will Romney do, now, to avoid being "unfair" to everyone? Thune just sort of says that Romney believes what he believes, and the election will probably hinge on the economy, and Romney wants to talk about the economy, and here are some talking points, to choke on.
Of course, Obama is WARBLOGGING against the GOP Congress, and has given them a to-do list...which they will NOT DO, because LOL, it's an election year. Which doesn't mean that some of this stuff shouldn't get done, like offering tax incentives to bring business home whilst cutting tax breaks that foster outsourcing. Why won't the GOP consider this? Thune doesn't know! He's like, why didn't he come out with this three years ago? We would have rejected it then. Anyway, Thune isn't having it, because Obama blocked the Keystone Pipeline and gave him a sad, along with "class war rhetoric."
But why can't we just end these incentives that foster job losses? BECAUSE THE TIMING WAS SUPER BAD. (Also, lobbyists tell John Thune not to.)
Bream wants to know about Dick Lugar's loss to Dick Mourdock, and Lugar straight going off on Mourdock about the way Mourdock is an ugly-minded partisan hack who won't work with anybody. Is Thune worried about losing that seat in the fall, because Mourdock is so terrible? Thune isn't. (And I think he's right to not be, Mourdock is likely to beat the Democratic nominee.) He then goes on to describe the Senate's overall dysfunction, without ironically noting that Lugar was nominally in favor of the Senate not being such a desolate chamber of hack-obstructionists diddling one another all day long.
Thune insists that there is room for compromise, but the dividing line is that the Democrats believe in raising revenue, and just as soon as they give up on that there will be tons of compromise, okay?
Meanwhile, will Thune run as the vice-president? Thune filibusters, and intimates that he'd rather stay in the Senate. He, of course, "won't rule out" the possibility that he might consider being the VP if he is asked.
Welcome to the end of every single interview with a Republican on Sunday for the next few months, obviously.
John Thune has not been invited to play basketball with Obama, but would consider it a privilege. So, that's important for everyone to know!
Okay, so it's time for a panel, with Brit Hume and Liz Marlantes and Paul Gigot and Juan Williams.
Beginning with marriage equality, is this a plus or minus for the President? Williams says that the polls indicate that it's sort of a wash -- there are more people that say they are less likely to vote for the President than the reverse. That's sort of sums up the evidence for the argument that this was, at least on some level, politically courageous. Of course, the other big news on this front this weekend was the Jan van Lohuizen polling memo, which urged Republicans to undertake a reversal on gay issues because the populace is growing more and more in favor of LGBT equality in general. And that's sort of the evidence for the argument that you'd better get yourself into the 21st century, somehow.
Williams goes on to point out that Obama's decision will likely excite young voters and base traditionalists, while giving doubts to older voters and voters in places like Virginia. Williams also says that the fealty of the African-American vote will be tested, as they are a traditional liberal voting bloc that has held out against supporting marriage equality.
Gigot says that this might matter in some swing states, toward the fall, but it will probably only matter in a small way. Was it forced by Biden, though? Gigot figures that this was something that Obama and Biden were always going to do, they were just going to wait until the convention. Gigot does note that Romney gets some help, too, because it will motivate Christian conservatives to end their uneasiness with Mitt and get out and support his candidacy.
Marlantes says that Romney is not likely to go out and run on this issue, however. Both sides are pretty nervous about the issue. Marlantes says that the huge shift in favor of the marriage equality still indicates some volatility.
Hume says that there's reason to distrust the national polling on this, because the states still keep banning gay marriage. He figures that it's a net-minus for Obama and says that Obama hasn't actually "evolved" on the issue. He's just "revolved" around to an old position to maximize political advantage. (Of course, Hume prefaced all of this by saying there was no politica;l advantage to be had.)
Well, look, of course Obama did not "evolve." That was always a sort of fool's game. And that's why I don't get too excited about Obama's decision. Rather, I get excited about the fact that the activists on this issue have gained considerable clout in American politics. There are a considerable number of liberals who spit a lot of cynicism over this whole matter. Some are, of course, so overly concerned with winning elections that any expression of principle that isn't a slam dunk with all voters at all times is something to be afraid of. Others are a little more weird, prone to pointing out the cynical calculus, as if that eclipsed the symbolic importance of having a Commander-in-Chief swing to your point of view.
Look, y'all, I don't know what game of thrones you're playing, but anytime you can project yourself into a politician's political calculus, and get them hot and bothered about what you might do if you're not satisfied, that is A GOOD THING. I suppose that many people are sort of upset that Obama gets to sort of skate on this -- he was clearly always, at the very least, going to pop up after the start of his hoped-for second term and say, "Whoa, I am suddenly for gay marriage" -- and that marriage equality wasn't going to get hero president who led with courage and conviction on this issue.
"What a profile in courage," snarks Hume. Well, look. I like people with courage and conviction. But there are some times when courage and conviction are overrated. And I think that in politics, the one quality I absolutely love in a statesman is his or her capacity to get bent backwards over a barrel to the point where they have no choice but give me what I want, immediately. I'd always rather have some guy caught out with their pants down on the goal line between me and what I want, than someone with courage and conviction.
The people who have long advovated for LGBT equality have come from humble beginnings. I still remember a time when it was fearful to even present yourself in public as a member of that community. I still remember when their cries for help over a disease that was killing them was met with indifference (or even mockery). And now, these activists have the kind of pull that allows them to win a reversal in policy three days after someone says something on teevee? Sorry, y'all, I straight up refuse to be cynical about that.
Hume goes on to say that the Obama administration isn't going to do anything to advance the issue. I mean, except not fight DOMA. Have we forgotten about that? And as Chris Geidner points out, the Obama administration's decision to not fight DOMA does have repercussions in how the issue plays out in the states. It is of critical importance, for instance, to Ted Olson, the Bush Solicitor General who is fighting to overturn California's Prop 8 ban on same-sex marriage.
One of the reasons, of course, that GOP pollsters are telling Republicans that they need to reverse themselves on this is because of the changing demographics:
Different states are evolving at different rates. And what happened in North Carolina is hardly a surprise -- they are one of the states that is uniquely resistant to marriage equality. But, the simple truth is that most of the people who oppose this tend to be closer to dying. So, unless they suddenly become immortal, this is going to be an issue that is looked back upon with some small amount of embarrassment.
Moving now to the Washington Post's story about Mitt Romney's high school years. Marlantes says that no one really wants to end up in a discussion about their adolesence, but the Romney camp flubbed their response to this story by not taking the opportunity to show some "largeness in spirit." "Romney's biggest problem isn't that people think he's mean," Marlantes says, "People think he's insincere."
Hume wants it to be known that forcing someone down and cutting their hair off is not a "prank," it's "hazing." That said, is that the Post failed to connect the story to some other part of his life or career. No big picture. I'm not sure that was the point though. Their reporter was assigned the story and he reported it. You know, that whole "making a larger connection" thing is nice when you can do it, but isn't that one of those places you open yourself up to criticism? "I have these facts, and in my opinion, they say something else, which I will extrapolate." That way lies charges of bias. I'm not saying that this is a bad form of journalism (though I really hate "psyhological studies" of politicians from reporters, who know nothing about psychology), I'm just saying that the Post reporter, in opting to stay in his lane, probably did himself a favor.
Hume says the story obviously struck the WaPa editors as a big deal, and he doesn't understand why, or why it got the presentation it received. (I am going with: 1) It's May and everyone is bored and 2) the Post wants to sell newspapers, and get talked about on the teevee.
I'll say this, as this Post story compares to the New York Times Vicki Iseman story of last cycle...well, there's no comparison. The Post's story is better. The Times Iseman story was awful. It felt like I was being conned, even as I read it.
Williams thinks that the Post expedited this story to connect with the gay marriage story of last week, but I was actually under the impression that they delayed the story slightly, to try to avoid that connection being made? At any rate, Shannon Bream points out that the Romney story was long-in-the-works, and of course, no one knew that Obama was going to make an announcement on marriage equality until a few hours before it happened.
Marlantes is probably the biggest defender of the story and its treatment, and she seems to find it silly that you wouldn't put this hair-cut story in the lede, after four people bring it up on the record independently of each other.
Will we see similar pieces on the President? Hume scoffs, "Are you kidding, from the Washington Post?" (Hume should actually meet the Post's editors!) He relents in the end, saying that the President will be judged on his presidency.
THE CHRIS MATTHEWS SHOW
Okay, let's have some more FEELINGS about these stories with Chris Matthews and his Genius Bar colleagues, which today include Andrew Sullivan, Gloria Borger, Nia-Malika Henderson, and our own Howard Fineman. Howard and Nia-Malika are doing some color coordination today, by the way.
So, hey, y'all heard about this crazy stuff with Obama talking about how he was cool with the gay marriage, right? Andrew Sullivan, do you have any previously unblogged thoughts on the matter? No, but he's synthesized them all quite movingly. Sullivan says that Obama's announcement is "hugely important," and he didn't "realize how important it would be till it happened."
"I sat down and watched our president tell me that I am his equal. That I'm no longer outside, I'm fully part of this family. And to hear the President who is in some ways a father figure speak to that, the tears came down like with many people in our families. To be included. I never understood the power of a President's words until that day, really. I thought, all that matters is the states and the Congress and the Defense of Marriage Act and I had all this in my head and suddenly this man saying I'm with you, I get it, you're like me, I'm like you, there is nothing between us, we are the same people and we are equal human beings and I want to treat you the way you treat me, that -- that was overwhelming. That's all i can say. I was at a loss for words."
Matthews points out that in previous elections, gay marriage has been used as a brickbat in election years, but over the past few years, the opposition has diminished. Henderson notes that Biden's not wrong about the cultural impact of things like Will and Grace, and their ability to get people thinking in new ways. (Though most of the time I watched Will And Grace I thought about how boring the titular characters were.)
She also points out that gay marriage has been legalized, without the world ending.
Howard says that now this is a wedge issue on the GOP side, and says that Romney's campaign has been "calm and cautious" about this, even as the GOP forces outside of the campaign itself have gotten heated up about this.
In terms of the electoral college, Borger figures that his support for marriage equality ends up being a wash -- he loses some voters on the blue-collar margins that were likely leaning against him anyway, but he galvanizes the youth vote. (It's gone unsaid so far today, but deserves a mention, it also bring a lot of money off the sidelines and into Obama's warchest.)
Sullivan says that marriage, in itself, has a lot of "small-c conservative" values that mean a lot to families. Henderson adds that marriage equality resonates in libertarian pastures as well. (Gary Johnson -- in favor of marriage equality even before Joe Biden made it suddenly cool, let's not forget.)
Most of Chris Matthews' friends say that Obama's decision this week is either a wash or a net plus. Borger reiterates her position on the demographics. Howard goes macro, saying that it's a "historic moment" and that this is an example of Obama being the change agent he promised to be. The caveat -- and it's a big one: "It hasn't worked so well on the economy. If I was Mitt Romney, I'd say fine, go get married, then try to get a job."
"The irony is that this year, the Democrats are running a cultural campaign," Howard notes. Sullivan follows on that this is how Obama turns the election into a "choice" election. We've been over this before -- the administration would prefer the election to focus on "choice" and not be a "referendum election."
Moving to the WaPo story on Romney's tendency toward sociopathic high-school hijinks, which Romney can not remember. Sullivan "goes there": "Kids are committing suicide across the country because they're bullied in high school and we now know a future president was a bully in high school." Sullivan says that it's a "character issue," that affects him viscerally.
And now we're watching old clips from "All In The Family," which had an episode about Archie finding out a friend of his was gay, and Richard Nixon watched it, and he totally liveblogged his feelings onto those tapes he was always taping. (Nixon hated it, and turned it off, because he was so morally outraged by this teevee show, because BLARGH the Roman Empire was undone by a buncha homos, and he didn't want to see America become a place where you could be friends with a gay man, and blarrrgle-gargle-hooey, instead we ought to be like a "tough nation" like Russia, who "roots out" the gays. And then Nixon went on to be a figure that all Americans associate with moral rectitude, the end.)
What do Mitt Romney and John Kerry have in common? Uhm, they are New Englanders with yachts? (Actually, I do not know if Mitt Romney has a yacht. Our "yacht-politics" specialist, Elyse Siegel, is the person to ask about that stuff.) How about they are New Englanders who both speak as if they have been hooked up to a series of air pumps? Is that not it? Fine, what's the answer?
Apparently, to fight Romney, you must use the "Bush playbook," which I guess means, "Hope that Romney goes windsurfing." Oh, also: bolster your warfighter cred while making your opponent out to be an elitist flip-flopper. BUT SERIOUSLY, it would really help if Romney would go windsurfing.
Howard says that the Obama campaign probably have a lot of footage of Romney's homes and leisure activities. The collective strategy, he says, bears a resemblance to the old GOP campaigns -- running culture war strategy, burnishing the military aspect. That's why Obama went to Bagram AFB to announce -- well, he sort of announced that everyone should refer back to previous announcements. Seriously, I'm at a loss to tell you what new stuff was said at Bagram.
Is Romney hurting himself by showing off his wealth? Borger says that he does himself tiny little harms when he inadvertently blurts out something like, "My wife has a couple of Cadillacs." However, she says, there's no way Obama avoids running as an incumbent with a record to defend. And eventually, he's got to mount an economic argument.
Sullivan says that cultural populism is often a better motivator than economic populism. Henderson says that we're still in the "biography" phase of the election process, and so the Obama camp is off with an emphasis on the fact that he is "not far removed" from ordinary people. Howard says that the Obama camp would prefer to make almost any argument than one centered on the current state of the economy, but they won't be able to do it "all the way to election day."
Here are things the Chris Matthews did not know: Greece is leaving the Eurozone by the end of this year and it will have big ramifications on the election than anything they're discussing today (Sullivan), Democrats will continue consolidating women with the Paycheck Fairness Act (Borger), Al Sharpton will go out and make the case for marriage equality with blacks (Henderson), and the big Democratic donors are already out in force for the 2016 race, swelling around Hillary Clinton and Andrew Cuomo, mainly (Fineman).
Matthews asks Borger why women are more supportive of gay issues than men. She answers, "Our humanity."
Matthews wants to know if anyone in the media today can move opinion across the board, like -- he intimates via clips -- Johnny Carson. Howard says that if there's a unifying figure that go across the spectrum, it's daytime women talk-show hosts, like "Oprah, Ellen, and The View." Henderson cosigns, saying despite the struggles of Oprah's network, she demonstrates the ability to marshal minds. Borger isn't sure that we aren't so culturally diffuse right now that one single figure in the media can shift the landscape. Sullivan says that he's relieved that no one has that kind of power, adding that he thought David Brinkley had too much power. That said, he gives props to Brian Lamb, who created C-SPAN.
MEET THE PRESS
So, Jamie Dimon leads off today's MEET THE PRESS, which is nice, because elsewhere, this story is getting downplayed, but unfortunate because if there's anywhere better that this show to provide someone like Jamie Dimon a safe haven, I don't know what that is. Obviously, I'm hoping for the best, but I think that Dimon would find tougher critics at "Jamie Dimon's Electric Funk Hour" which is the show he runs every Friday night at 3am on Manhattan's cable access. Probably. Have you seen cable access television in New York City? It's mesmerizing.
See, they will bring in Andrew Ross Sorkin, to comment on this, and I'm guessing that his commentary will be something like, "My friend Jamie Dimon is awesome, obviously."
Then we will have a lengthy reminder that an actual news story happened on Meet The Press, with Reince Priebus.
Anyway, do you remember how last week, Joe Biden was on Meet The Press? This was a proud moment, for Meet The Press, Meet The Press will tell you. But David Gregory thinks that JP Morgan's big old $2 billion loss is going to renew the old "Wall Street vs. Main Street" fight. That J.P. Morgan had a cock-up of this magnitude is fairly striking, because they have a reputation of being the best a hedging. (We will call this whole matter "hedging" despite the fact that it's sort of hilariously ironic.) In fact, it was JPM that invented the credit-default swap, hedging against the likelihood that Exxon would default on the $4.8 line of credit JPM extended them in the wake of the Exxon Valdez disaster.
Well, right off the bat, Dimon does penance for his previous remark that all of the agita over his bank's trading habits were a "tempest in a teapot." "I was dead wrong when I said that." He says that he's coming clean on this to demonstrate that he's a good guy on the block. Again, Morgan's reputation being what it is, it makes you wonder how the other big banks are doing business. And by "makes you wonder," I am referring to a vague sense of impeding terror?
"We made a terrible, egregious mistake," he says, "There's almost no excuse for it." What kind of heavy lifting are you doing there, "almost?" Maybe we shall find out.
Were there warning signs? Dimon says in retrospect, there were red flags, and people got defensive instead of acting to solve the problem. Did the bank break laws or rules or regulations? Dimon says that internally, they have compliance officers examining the situation. "We know we were sloppy, we know we were stupid, we know we used bad judgement," Dimon says, but he adds, "We don't know if any of that is true yet." By which he means, rulebreaking. Outside regulators, he says, are entitled to come to their own conclusions about it.
What was the screwup? "In hindsight, we took too much risk. The strategy was badly vetted and badly monitored and it should have never happened." See also: 2008, everyone.
Just as a demonstration of what I'm talking about in terms of MEET THE PRESS beging a friendly haven, I'll point out that when Gregory gets around to the part where he's supposed to be holding Dimon responsible for steering his ship into a vortex, he puts the question like this:
"So here you are, Jamie Dimon. you've got a sterling reputation. Why? Because people say he knows how to manage risk better than anybody. You're known as the guy who ably led J. P. Morgan Chase through the worst financial collapse since the great depression. How does a guy like you make this mistake?"
BUT YOU ARE SO AWESOME OMGZ! LIKE TOTES AMAZEBALLS? WHAT HAPPENED, BUDDY?
Dimon is of course, AW SHUCKS WE ALL MAKE MISTAKES. Sometimes they are terrible and awful, you know, BUT I'VE GROWN AS A PERSON.
Meanwhile the point: aren't back to bailouts and "too big to fail," and whatnot? Dimon insists he wants to get rid of "too big to fail" banks. And he supports the parts of Dodd-Frank that offer "resolution" -- which takes apart a big bank piecemeal and includes compensation clawbacks and the dismissals of boards of directors, which Dimon says he supports. "The banks should be dismantled and their name buried in disgrace."
Great. But we've moved past the point. Let me kick this to Yves Smith for a second:
As we've noted, one of the big reasons it wasn't as badly hit in the crisis was that it took big CDS losses in 2005 on the Delphi bankruptcy (yes this is a rumor, but it is as pretty widespread rumor, and the sources are credible). The bank got cautious just as the subprime market was entering its toxic phase. So JP Morgan may have dodged the bullet at least in part by getting a wake-up call earlier than its peers.
But other issues seems even more important. First is that Dimon consistently misrepresented the seriousness of the exposures as soon as the press was onto it. Both Bloomberg and the Wall Street Journal were digging, and Dimon was dismissive, calling the concerns a "tempest in a teapot". JPM shares are down over 5% in aftermarket trading. The CEO misled investors, but no one seems to care much about niceties like accurate and timely disclosure these days.
This is the disclosure in the first quarter 10Q:
"In Corporate, within the Corporate/Private Equity segment, net income (excluding Private Equity results and litigation expense) for the second quarter is currently estimated to be a loss of approximately $800 million. (Prior guidance for Corporate quarterly net income (excluding Private Equity results, litigation expense and nonrecurring significant items) was approximately $200 million.) Actual second quarter results could be substantially different from the current estimate and will depend on market levels and portfolio actions related to investments held by the Chief Investment Office (CIO), as well as other activities in Corporate during the remainder of the quarter.
Since March 31, 2012, CIO has had significant mark-to-market losses in its synthetic credit portfolio, and this portfolio has proven to be riskier, more volatile and less effective as an economic hedge than the Firm previously believed. The losses in CIO's synthetic credit portfolio have been partially offset by realized gains from sales, predominantly of credit-related positions, in CIO's AFS securities portfolio. As of March 31, 2012, the value of CIO's total AFS securities portfolio exceeded its cost by approximately $8 billion. Since then, this portfolio (inclusive of the realized gains in the second quarter to date) has appreciated in value.
The Firm is currently repositioning CIO's synthetic credit portfolio, which it is doing in conjunction with its assessment of the Firm's overall credit exposure. As this repositioning is being effected in a manner designed to maximize economic value, CIO may hold certain of its current synthetic credit positions for the longer term."
The last comment would appear to imply that if they can't unwind this trade at acceptable losses, they'll move some of it into a hold to maturity book, where they aren't required to mark to market. Charming.
Are we going to get into the institutionalized obfuscation? I'm guessing no.
Gregory does point out that Dimon's been particularly outspoken against regulatory intervention, and Dimon responds by...objecting to this characterization. "We support 70% of Dodd-Frank." Again, this sort of muddies the waters. What Gregory needs to do is look at Dimon and say, "Public money should never backstop these sorts of insane prop bets you're making, agree or disagree?"
"Specifically, hedging should make your bank less risky," Dimon says. YES, ONE WOULD HAVE THOUGHT. You are using the word "hedge," after all. But what is the key goddamned lesson from 2008? EVERYONE THOUGHT THEY WERE HEDGED. It's sort of not good enough anymore to say, "Oh, well, our activities just naturally create lower risks. We have a model, and I think you'll plainly see that most days, the economy does not collapse."
Has Dimon given "more ammunition to regulators." Dimon doesn't think so. He doesn't think Morgan needs any help. "This is a stupid thing that we shouldn't have done, but we're still going to earn a lot of money this quarter." Well, that's a strong stance against stupidity!
There is apparently another part of the interview, that Gregory scheduled with Dimon before the news broke, just because Gregory wants to chat with Jamie Dimon, because that's awesome. Jamie Dimon was totally cool about sitting for more interview after the news of JPM's cock-up came out, because he is a hell of a guy. But anyway, the original intention was to ask Dimon some horsey-race questions about the election, because no one relates to the typical voter like Jamie Dimon.
This all needs to be noted, lest you wonder why Dimon and Gregory have switched chairs.
So, isn't it sort of galling that people are really struggling as the people who created most of those hardships sail on, unburdened? Dimon says sure, he blames everyone in general, but some banks were better than others, and blah blah, you heard these monologues in the movie MARGIN CALL. He understands the anger, but we need "solutions!" Gregory asks, "What about accountability? Why hasn't anyone gone to jail?" Dimon says that you should "go punish the bad actors," and leave the institution alone. I sort of think we're looking past the whole part where all the actors, good and bad, get Henry Paulson to hand out several trillion dollars.
Is America better off now then it was four years ago? LET'S ASK JAMIE DIMON THIS, DEFINITELY. His answer: America is awesome and the economy is getting stronger. Could we be doing better, sure. But there was a crisis, and Bush and Obama fixed it the "old fashioned way." (Shoveling money at rich people.) He goes on to say that the debt ceiling crisis, the failure to advance policy out of Simpson-Bowles, and the huge regulatory push have hurt growth. Dimon says he remains "barely a Democrat." Maybe he understands that the "debt ceiling crisis" was a zany right wing stunt that nearly became an even zanier destruction of the global economy, because there weren't enough people who knew what the "debt ceiling" was among the armed hostage takers pointing guns every which way. (Metaphorically, I mean. Actual guns would have been even zanier.)
But Dimon is "disturbed" by some Democrats' behavior. We've entered a zone where irony flourishes.
Dimon laments that there hasn't been "collaboration" of some vague, undefined variety that leads to awesomeness. Presumably, he would like to participate in such a "collaboration." He'll have to forgive us -- it really looked for all the world that you've been mainly focused on making crazy prop bets in the derivatives market, Jamie! We had no idea you wanted to build a bunch of dams or something?
"I wish that everyone would put their knives down and get back to work," says Dimon, who maybe needs to read that Mann/Ornstein piece from a couple weeks ago? When he's done trying to create a fund from the glint he rubs off of two quarters that are rubbed together, I mean.
"I don't know the inside story of Simpson-Bowles," Dimon says, which is okay, because no one in DC has reported it correctly. For instance, Dimon has gotten it into his head that you can "read Simpson Bowles." He is probably referring to the "Chairman's Mark," that was leaked during the deliberations. The one that was never going to pass because it called for modest tax increases? Sure, everyone read it! But understand that despite what Dimon says, it did not contain "magic words" that moved the debate. And you can't blame Obama for not backing the "Chairman's Mark" -- the President was hoping that an actual plan would get out of committee!
Dimon goes on the elaborate on his preferred policy prescriptions, and they are fully and foursquare the precise policies that are being advanced from the current occupant of the White House, to the chagrin of many liberals! Only Dimon doesn't seem to "get it."
And now here is Carl Levin and Andrew Ross Sorkin. Levin says that the regulators will step in and battle lobbyists over the whole JP Morgan matter. Levin's take is that the Volcker Rule guards against these sort of bets, with some important exceptions, most notably "hedging," which Levin understands as a risk reducer, but Dimon has already lumped this entire $2 billion failscapade and put it under the penumbra of "hedging."
"We have to be careful that the regulators are not undermined by this effort to create a loophole in the area of what's called 'portfolio hedging,'" Levin says. Now we know what hundreds of lobbyists are going to be arguing in the coming weeks.
Does Levin accept Dimon's "accountability?" He says that the issue does not involve "personalities," it's a matter of law, and preventing more "too big to fail" bailouts. Levin says that the real battle is in DC, and often between regulators, some of whom want the strong law, and others who want to weaken it. Levin, not surprisingly, feints in the direction of Treasury when he talks about the willfull weakeners.
Why should anyone care about this in general? Sorkin says that the real story here is the Jamie Dimon is superhuman in his awesomeness and if he could make a $2 billion cock up, then everyone can, and that means nothing has changed and everyone is still doomed...which is all stuff I could have told you if the big Jamie Dimon story was that he formed a J-Pop band and is touring the malls of America.
Can anyone give anyone any assurance that anything will be safe one day? Levin says that if we can prevent these banks from making these crazy bets, sure. LOL. Okay. Sorkin says that even though Dimon says he supports resoution authority, applied at his own bank if need be, the truth is that no one will know if the "break-up-the-banks" mechanism has any teeth until we're past the threshold of crisis.
Reince Priebus is here now, to talk about the horsey-race.
Will same-sex marriage be a defining issue for the GOP in the coming election? Priebus isn't sure, but if anyone has strong views on the matter, they now have a clear contrast between the two candidates. That said, Priebus is still pretty sure that the election is going to be on the economy.
Gregory points out that more and more Republicans are coming out in support of marriage equality. Priebus counters with the fact that the states have voted against it. But the only recent data point is North Carolina, who as a state has been uniquely resistant. I fully expect that in many states, these bans will be lifted and repealed, even from the state constitutions.
This is probably not the conversation Priebus would prefer to have, by the way -- a lengthy discussion of same-sex marriage? There's a contrast, and that's the point: it needs no further elucidation. But it seems that the Obama campaign has bought another week of not talking about the economy.
Priebus has to contend with Rand Paul's "I didn't think Obama could get any gayer" comment, and he just doesn't want to. He wants to talk about Romney, and he insists that Romney will be very nice to gay people, even as he restricts their freedoms and denies them some measure of dignity. Is it a civil rights struggle? Priebus says no. Gregory points out that gay rights proponents compare this posture to the one that allowed Jim Crow laws to flourish. Priebus says that's an inapt comparison, because people got murdered in the Jim Crow days. He does realize that members of the LGBT community have been murdered, right?
Anyway, Priebus says that "people deserve dignity and respect, but that doesn't mean that it carries on to marriage." Yes. Marriage is a sanctified tradition, that doesn't necessarily have anything to do with dignity and respect. You can actually test this! You can meet a member of the opposite sex tomorrow and go get married on a whim, or a dare, or a bet. "Do they love one another? Are they going to go the distance?" The state doesn't give a crap! Take a marriage licence. Take a bunch! Everyone come in, with a complete stranger of the opposite sex, and get hitched, for poops and giggles.
It's all very sacred! We should definitely take the sacredness of this SUPER SERIOUSLY.
Priebus finally gets around to talking about how this show has been a waste of time because same-sex marriage is not as important an issue as the economy. Uhm...don't come on the show, then? Or at least don't come on the show and demonstrate that you have paragraphs of talking points on the matter?
What does Priebus have to say about the J.P. Morgan foul up? He says it demonstrates that we need less regulation, obviously! The bulk of Priebus' argument here is to blame Dodd-Frank for failing to regulate something that Priebus would prefer not be regulated. Making it an issue of Dodd-Frank's failure to prevent something, versus Romney/RNC's not-regulation, which would be successful, even if a bank impoded. "But the bank went craphouse, Reince!" you would say. He would reply, "Not because a policy we enacted failed!"
"Listen, I'm not an financial expert or an expert on SEC," says Priebus, "but I can tell you that this president talks a lot about regulation on Wall Street. He takes millions and millions of dollars from Wall Street." That's all true, and it would be a great position to take if you were coming at Obama from his left flank. As Priebus supports only talking about regulation and taking Wall Street money, it's more than a little fatuous.
Okay, it's panel time, which means I've got about twenty more minutes of chum-tunnel to wriggle through before I get to detoxify myself. Today we have Gavin Newsom and Al Cardenas and Chris Matthews and Kathleen Parker and Jonathan Capehart.
So, the New Yorker put rainbow columns on the White House, let's goggle at it. Whee! Matthews says that it's interesting that after Biden "got out over his skis," the White House made lots of leaks indicating how much trouble that made, which is pretty weird, I must admit. "I don't know why they wanted this spat to be public," Matthews says.
Newsom says that he has no idea if Obama was going to change his mind, but he's glad he did. Now we find out if it's a "good political decision or a perilous political decision." Cardenas, of course, thinks that Obama should have explained himself earlier, but in the end, it's "much ado about nothing."
Capehart notes that the states have always been handed the responsibility of defining marriage, and the idea that Obama is punting to the states on this is the wrong way to see this. I'll refer everyone back to Chris Geidner's piece which I linked at the top of this. Capehart goes on to note that Obama had to come out in favor of this, if for no other reason that his deeds (largely pro-LGBT policies) did not match his words (hesistancy to embrace the LGBT community). Parker contends that Obama did punt back to the states.
Parker (who is also pretty evidently pro-marriage equality) also says that "evolving" was always the perfect word to describe this because the American people are starting to come around to supporting it. Okay, but that doesn't describe what the President was doing. Obama was in a holding pattern, waiting to see what horizon line he'd hit first: total political safety or utter political untenability. Like Capehart said, it got untenable circa last week. That's not evolution.
Cardenas doesn't agree that the American people are evolving on the issue of gay marriage. He's wrong, but never mind.
Matthews, of course, is caught up in the history of it all, and essentially carrying Andrew Sullivan's argument into the discussion, without Sully's eloquence.
Cardenas says that social conservatives will probably come behind Romney more solidly and more passionately than they might have before. He also seems to think that social conservatives are new to the game of seeing marriage through a political prism. Matthews broaches Romney's high school bullying, to the objection of Parker, who isn't sure it's fair to extrapolate from Romney's adolescent experience. Newsom says that public opinion is swinging in favor of marriage equality, but the action at the ballot box will always lag -- when the SCOTUS ruled that inter-racial marriage was legal, public opinion was 70-30 against.
Capehart says some nice things about the gay community and Obama's symbolism, and Cardenas has a sad that Gregory picks that moment to end the discussion.
Okay, y'all. I'm going to call my mom, now, because it's Mothers' Day, so don't forget to do that. Just as a reminder -- there will be NO SUNDAY LIVEBLOG NEXT WEEK, because I will be out of town. We will return May 27th. Until then, best wishes to all of you!