Exclusive interview with JP Morgan Chase CEO Jaime Dimon by Derisive Duck's senior business editor.
Derisive Duck: "Mr. Dimon, may I call you Jaime?"
DD: "Please explain to our readers, Mr. Dimon, how your bank could lose two and possibly up to four billion dollars, almost overnight?"
Dimon: "I have my people working on that. But I can say that it has to do with ledges."
DD: Don't you mean hedges"?
Dimon: "Yes, of course, hedges. These are very complex financial transactions which few people outside the banking community understand."
DD: "Do you understand them?"
Dimon: (Excuses himself to go to the bathroom & returns)
DD: "Can you tell us just what kind of investment went so wrong that it cost your bank and stockholders four billion dollars?"
Dimon: "Well, to put it in lay terms, we were hedging against losing money in the credit derivatives market."
DD: "Isn't that like betting against yourself?"
Dimon: "But what we didn't know was that others were hedging against our hedge."
DD: "A double hedge, so to speak."
Dimon: "Exactly. But what we should have done, in hindsight, was hedge against the hedgers who hedged against our hedge."
DD: "That's a lot of hedges. Whatever happened to loaning money to someone who just wants to buy a tractor, for example?"
Dimon: "Banks don't do that anymore."
DD: "There are some who say the big banks should be broken up."
Dimon: "And there are some who say the moon is made of blue cheese!"
DD: "I believe it's green cheese, sir."
Dimon: "Blue cheese, green cheese, the point is that we are too big to flail."
DD: "I think, sir, its too big to fail."
Dimon: "I like that. We cannot fail because we are too big! Like a 300 pound Sumo wrestler hovering over a kindergarten class. If we fall, all the little people get crushed."
DD: "Good metaphor, Sir. But doesn't this mean that no matter how asinine, hair brained, ill-advised or risky an investment is, you can always rely on the tax payers to bail you out?"
Dimon: "Don't you just love America?"
DD: "Not as much as before this interview, Sir."