Chillin' out till it needs to be funded
JP Morgan changed its plans to buy more trading businesses and maybe even on catching up with Goldman Sachs. It still bought the European and other International desks of the RBS Sempras JV in a $1.7 billion deal. Thus J P Morgan would still not be trading Power & Gas in the US keeping its options open on the growing of Trading businesses with the Obama administration eying pecuniary regulation to stop trading heavy firms like GS from making ‘excessive’ profits.
This time Jamie Dimon is looking to repeat his great experience in the post Citi world in rebuilding bank franchises. Till date he has managed well enough with WaMu and well, BSC – Bear Stearns was but a trading book.
Meanwhile, BofA has dealt abysmally with the global franchise of Merrill Lynch. Just goes to show what a panic-stricken average Joe can do to an intelligent, if arrogant talent of Merrill Lynch. It seems from some quarters that ML’s team on the ground was never obsequious to Thain either and their mental tyranny swamped them once BofA was in charge. That is probably why when I set up one, I will stay away from all such talent. But mark my words, this is not time to set up hedge funds or PE tranches for infrastructure holdings. It is time to restart in Banking and refresh your business in Investment Banking. It need s a new management team to realise that Anshu Jain’s trading work s or Ackerman knows what he is saying for a european DB, similarly, it is time for a clan change at BofA ML to give Moynihan a deserved chance. Or else, this mess will continue to give you a head of hiccups for the road, and you won’t be driving your business, just cattle in nether land.
Among other threats to J P Morgan would be their largesse in managing and financing over 30 coal-fired power plants. Also Rockefeller remains a stakeholder and his investments in US pharmaceutical interests count to over 50% of US pharma managed and invested through Chase Manhattan / J P Morgan Chase
Of course JP Morgan also remains media friendly and a mean advisor in India , China and other picks of the decade as it marches on, but common sense would direct that it be wary of impromptu marches and equally impromptu cutbacks like BofA ML, which has really churned staff on the ML side in this part of the world. As of now, it has banking in its portfolio and is sitting fine. And the Maiden Lane losses of $4 billion in Commercial Real Estate well deserved and the net losses of $3 bn by the Feds a fair pittance in face of the carnage that has ensued since Bear broke in mid 2008