Jamie Dimon on the Financial Crisis

http://files.shareholder.com/downloads/ONE/726879428x0x283416/66cc70ba-5410-43c4-b20b-181974bc6be6/2008_AR_Complete_AR.pdf While most people are honorable, excess speculation and dishonesty were far greater than ever seen before, on the part of both brokers and consumers The combination of no-money-down mortgages, speculation on home prices, and some dishonest brokers and consumers who out-and-out... [more]

http://files.shareholder.com/downloads/ONE/726879428x0x283416/66cc70ba-5410-43c4-b20b-181974bc6be6/2008_AR_Complete_AR.pdf While most people are honorable, excess speculation and dishonesty were far greater than ever seen before, on the part of both brokers and consumers The combination of no-money-down mortgages, speculation on home prices, and some dishonest brokers and consumers who out-and-out lied will cause damage for years to come. This, in no way, absolves the poor underwriting judgments made by us and other institutions, and it certainly doesn’t absolve anyone who mis-sold loans to consumers. Albert Einstein once said, “Make everything as simple as possible, but not simpler.” Simplistic answers or blanket accusations will lead us astray. Any plan for the future must be based on a clear and comprehensive understanding of the key underlying causes of – and multiple contributors to – the crisis, which include the following: • The burst of a major housing bubble • Excessive leverage pervaded the system • The dramatic growth of structural risks and the unanticipated damage they caused • Regulatory lapses and mistakes • The pro-cyclical nature of virtually all policies, actions and events • The impact of huge trade and financing imbalances on interest rates, consumption and speculation [less]