On Wall Street, it’s all about multiples and geometrics. First JPM told us that $2 billion dollars was at stake, then the number grew and grew to finally, and possibly $6 billion dollars “down the road a piece maybe.” Shareholders and our readers are quite savvy; especially if they’ve been in the market for decades. They embrace the rubric: “Where there’s smoke, there’s fire.” Now the projected loss is $9 billion dollars. We are looking at a 450% differential here. Quite an uptick. Is this the end game? How far will the geometric take us? Is closure in our future as JPM shareholders? Mr. Dimon has keenly pointed out that clients and taxpayers were not, and will not be, hurt by these trading losses. Are shareholders third class citizens who do not warrant empathy and respect?
Illusion, Delusion v Reality and Surrealism
Perception and psychophysics, and cognitive psychology study how the brain perceives and processes what it sees, and how it comprehends normal, human distortions. Delusions are psychological systems people create in order to cope and survive in traumatic situations, and explain the inexplicable. Reality is what’s seemingly there, but it can be elusive; a life experience with which we are all too painfully aware. Surrealism involves the juxtaposition of different states of being, reality, time, and space. At this juncture, from a psychological perspective, it is unclear what JPM and Mr. Dimon are “really” about. The Shareholder’s brain is being challenged by the data to a surreal level. What is real, and when is reality really reality. Quite confusing. On Wall Street, reality counts even in a world where the average share is held for 22 seconds. Reality on the Street is “fast and furious.”
The Elusive Bottom Line…Is There an Endpoint?
Derivatives and swaps are the elite Street game of roulette. When you bet well (and lucky) you can hit big, but the downside can be even more lethal. It’s not a game for the faint hearted. We must also keep in mind that it’s not all about profit/loss. It’s about confidence, stewardship, and trust. We are not sure; I do not think anyone is, where the pillaging at JPM will end up. We need more time, but time is always of the essence on the Street in the mega-electronic trading world in which we struggle daily for survival together with financial and emotional safety.
To contact Christopher Bayer directly, please email Christopher.Bayer@TheShareholderActivist.com.