Understanding The Collective Wall Street Shrug Among Jamie Dimon’s Peers

“I don’t think it’s a big issue,” BlackRock Inc. Chairman Larry Fink told CNBC June 7.Bloomberg interviewed over a dozen influential and powerful players on Wall Street. Not one of them censured Jamie Dimon for his bank’s $2bn trading loss. They just don’t see what the big deal is.

“Occasional losses are inevitable,” said Blackstone Group LP (BX)’s Stephen A. Schwarzman, 65, CEO of the largest private- equity firm. “I kind of shrug,” said Bill Archer, 58, a former co- chairman of Goldman Sachs Group Inc. (GS)’s capital markets committee. “I don’t think it’s a big issue,” said BlackRock Inc. Chairman Larry Fink.

What is going on here?

We see three possible explanations for their bizarre responses.

1. Always clever, always crafty, Wall Street execs know how to play their cards. Public outcry over their outrageous on-the-record statements may last a few days or a month; but the ire and hatred of King Dimon lasts forever. His good opinion is worth far more than that of the public or pesky financial journalists.

2.  The execs’ behavior is part of an ancient, unspoken pact between those at the top: there but for the grace of God go I, so let me not lay a hand on my brother. And yes, Jamie, when it happens to me, you better get yourself on the record and stand up for me, too.

3. Deep in their heart of hearts, the CEOs are up in bed tossing and turning, trying to cope with the irrefutable truth that not they, nor anyone really, has a handle on the incredible and potentially devastating risks that their firms are faced with.

What do you think?

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