[ by Howard Haykin ] Jamie Dimon, JPMorgan Chase Chairman and CEO, testified before the Senate Banking Committee to answer questions about the recent multi-billion trading losses incurred at the firm's chief investment office.  All in all, Mr. Dimon received high grades for his testimony, as he continued to maintain that the loss was an "isolated event" without broader repercussions for customers or taxpayers. He made it clear that risk was necessary in banking, and that JPMorgan had the necessary strength to withstand the losses, which eventually could approach $5 billion. During the hearing, Mr.Dimon faced questions about how JPMorgan's chief investment office ("CIO") failed to clamp down on a complex derivatives trade that mestastasized into an unwieldy and hard-to-unwind gamble that failed.  He addressed queries about whether the firm's losses should prompt even tougher banking regulations, something Mr. Dimon has long opposed. First the Line-Up;  Analysis Follows. C-I offers 12 diverse stories - with their links.  We provide observations only on the first 2 stories - which in some ways are the most opinionate.  We respectfully leave the others for you to read at your leisure.

1. Dimon Takes The Hill.  (WSJ Editorial)  -  see writeup below.
2. JPMorgan's Dimon Outshines Senators. (Reuters video)  -  see writeup below.
3. Issue of Clawbacks. (Dealbook)
4. Understanding JPMorgan's Risk Models. (Dealbook)
5. Parsing Jamie Dimon's Testimony. (Dealbook)
6. JPMorgan Chief Says Huge Trading Loss Was an 'Isolated Event'. (Dealbook)
7. Dimon to CNBC: 'We;re Going to Get Through This'. (CNBC)
8. Dimon Says Losses Indefensible, Still Reform Skeptic. (Reuters)
9. BreakingBiews: Dimon in Center Ring. (video)
10. Dimon Fires Back at ‘Complex’ System in U.S. Senate Grilling. (Bloomberg)
11. JPMorgan Traders Took Risks They Didn't Understand, Dimon Says. (Bloomberg)
12. Blankfein Says Risk Mistakes Shouldn't Be Penalized 'Too Much'. (Bloomberg)

1.  Dimon Takes The Hill.  (WSJ Editorial) JPMorgan CEO Jamie Dimon swallowed his share of humble pie Wednesday on Capitol Hill, but along the way he also delivered some lessons to his Senate inquisitors.  For starters, Mr. Dimon declined to blame anyone but his own management team for the bank's $2 billion trading loss, saying "the buck stops with me." You won't hear that in a thousand years of Senate debate. While one of the goals of the Banking Committee session for some was to browbeat Mr. Dimon into dropping his fight against the Volcker Rule, the CEO, a Democrat, didn't back down.  Dimon added that he thinks regulators won't be able to write an adequate Volcker Rule banning pro trading - it's difficult to define the difference between hedging (which is allowed under the law) and trading with your own funds (which is supposed to be outlawed). Onto more important things, Dimon noted that, since the financial crisis, the bank is spending more on compliance - about $1 billion a year more and, at any particular point in time, there are 'hundreds' of full-time regulators on site at the bank.  These legions nonetheless didn't seem to know what was going on at the bank, much less how to respond, even after the WSJournal had reported that Morgan's "whale" trades were the talk of London and Wall Street.  Mr. Dimon passed on answering whether the 2010 Dodd-Frank Act made the financial system safer, although the WSJournal editorial staff would say 'NO." Mr. Dimon also reminded the committee members that the bank's losses have all been its money and that Morgan is also sitting on unrealized portfolio gains in the neighborhood of $7 billion.  As Republican Jim DeMint quipped, the Senate loses $2 billion or so every day. The problem remains, according to the WSJournal, that JPMorgan is still a too-big-to-fail bank, a fact that Dodd-Frank has only reinforced. In that context, Mr. Dimon's best comment was to remind lawmakers that there is a better way to handle a failing bank than a "resolution" process. It's an old-fashioned word, but one worth resurrecting: Mr. Dimon called it "bankruptcy." JPMorgan's Dimon Outshines Senators. (Reuters video) JPMorgan Chase CEO Jamie Dimon held his own at the Senate Banking Committee hearing - apologizing for missing his bank's $2 billion trade, but saying “big dumb banks” should be allowed to fail. Bobbi Rebell reports. Soundbites from the Video.

• "You can get along without $2 billion and you can't give her a modification Dimon!"  -- As protestors greeted Mr. Dimon when he sat down in front of the Senate Banking Committee.

• "When you reduce a hedge or hedge a hedge isn't that really gambling?"  -- Sen. Robert Menendez (D-NJ)
  • "I don't believe so, no." -- Response from Jamie Dimon.
  • "So this transaction that you said morphed, what did it morph into: Russian roulette?" --Sen. Menendez.
  • "It morphed into something I can't justify. It was just too risky for our company."  -- Jamie Dimon.

• "You want to be in a position where a big bank can be allowed to fail I wouldn't call it resolution. I think it's the wrong name. I think we should call it bankruptcy and personally I would call it bankruptcy for big dumb banks. When you have bankruptcy I'd have clawbacks, I'd fire the management, I'd fire the board. I'd wipe out the equity and the unsecured should only recover what they'd recover in a normal bankruptcy." -- Jamie Dimon.
  • Dimon made it clear that more regulation would not have prevented that type of trading loss - saying that the regulations have become too complex.  And in taking ownership of that mistake, he also said there should be no such thing as too big to fail.  Banks should suffer the consequences of their decisions - and that the tax payers should not be on the hook for banks' mistakes.

What Didn't Make it to the Video or its Transcript. "Why was the CIO given a pass?  Why did they not have the same rigorous risk management oversight that other divisions had? -- Charles Whitehead, Cornell Law School Professor.

The professor would have like to have heard the answers to those questions, but they didn't come out.  Nor did details of the positions themselves, and that's because JPMorgan is in the process of unwinding them.

Mr. Dimon has said, the bank it will give shareholders an update on those losses when it reports earnings in July.