I'll have a quadruple scotch and a JPMorgan chaser: Wall Street goes to hell. Again.
- Richard Poplak
- 15 May 2012 (South Africa)
It’s been a bad week for business, not that there have been too many good weeks for business of late. Disaster at JP Morgan; disaster at Yahoo; another crappy internet “start up” hits the toilet. Can’t wait for that Facebook IPO? Perhaps you require a status update. By RICHARD POPLAK.
Google Scott Thompson and you’re more than likely to come across the biography of the Canadian comedian who co-founded the legendary Kids in the Hall troupe. One of his funniest roles was in drag as Queen Elizabeth II, as campy and over the top as you’ve ever seen Her Majesty.
Scott Thompson is a queen, but he’s not the queen, if you get what I’m saying. He shares a name with the outgoing CEO of internet pioneer Yahoo, whose resume is equally as, um, inventive as the comedian’s. For one thing, he did not earn an accounting and computer science degree from Stonehill College, near Boston. For another, he never dressed up as the queen and made people laugh. That’s two strikes.
Yahoo is, of course, a mess. The once proud company has lurched from failure to failure, generating massive advertising revenue despite its slew of terrible leaders, not because of them.
Thompson’s inventive CV is just another blow in four months of unpopular and foolhardy decisions. He laid off 2,000 people without taking the time to ascertain what those people did. He got into a scrap with Facebook over patents – a company Yahoo had just snuggled up to in order to generate traffic. He waved a warning finger at Microsoft, a longtime partner, suggesting that he may partner with Google. And he wanted to push Yahoo out of media content and advertising, when the only thing that Yahoo has going for it is media content and advertising.
Scott Thompson came with a pedigree – he ran the PayPal division at eBay. But he also behaved like a moron. Not, however, as big a moron as the lady responsible for blowing $2-billion bucks at JP Morgan Chase in a trading debacle that far too many people saw coming for months.
Meet Ina M Drew, one of “the most powerful women on Wall Street”, the bank’s chief investment officer. All the press on this debacle note that Ms Drew has been at the bank for almost three decades. There seems to be some inherent hubris in that kind of longevity. Ms Drew, well supported by CEO Jamie Dimon – another genius who warned of this well in advance – threw away two chilly billy because of her unequivocal support for a creature named the London Whale, the trader directly responsible for the losses.
“We made a terrible, egregious mistake and there’s almost no excuse for it,” Mr Dimon said on television. Note the “almost”.
Last year, Ms Drew made $14-million; the year before she made about the same. She oversees a portfolio – a growing one – of over $400-billion. But with the new losses, JP Morgan shares have taken a tumble, and everyone at the bank looks like a complete idiot, least of whom the regulators who are supposed to keep the complete idiots in check.
By all accounts, Ms Drew – an advocate for women’s advancement within JPMorgan Chase – was a nice lady. Bet big and win: you’re a hero. Bet big and lose: you’re a fool. Lie on your resume and don’t get caught: you’re a smarty-pants. Lie on your resume and get caught: you’re a dumbo. So it goes in Wall Street and Silicon Valley, as it does everywhere else in the world. It’s about getting away with it, even if you are a publicly traded company with hundreds of thousands of shareholders, or a bank backed up and guaranteed by taxpayer money.
What’s the point of this little update? As we hurtle toward one of the more overhyped IPOs in the history of money, it pays to remind oneself that, in Mitt Romney’s words, companies are people. Put another way: companies are run by people, and often those people are stupid liars.
You already know this. It just helps underwrite the lesson when $2-billion goes missing. DM
- Yahoo fires Thompson and nears deal with Loeb, in The New York Times.
- JPMorgan Chase executive resigns in trading debacle, in The New York Times.
Traders work at the post that trades JP Morgan on the floor of the New York Stock Exchange May 11, 2012. REUTERS/Brendan McDermid.