Got engaged in some follow-up on the Jamie Dimon post I made last night both in and off the comments section with those seeking additional explanation. So thought I would elaborate both to clear up any confusion as well as to allow an opportunity to post this neat video I found a few months ago when Obama addressed some union convention and I thought it was time to revisit some US labor history and a movement — which has become marginal and powerless in recent decades — but now seems likely to gain traction in years to come.
A few people focused on my comment regarding an unidentified "hedge fund analyst" and that was not really the point. I talk to lots of people and was not at all trying to imply this person is all-knowing, or providing justification to go massively long in the expectation Jamie might get appointed and we would then see a surge. Second, the reason I did not ask him for follow-up/explanation was we did this by e-mail and did not get to talk. Basically I was looking for his take on this thesis as a reality check for my own views, figuring if he shared them we could then talk about implications and how to apply it. Frankly after getting his reaction I thought particularly as it was after hours it might be interesting to post idea here as an experiment to do some further due diligence and see what people thought.
Anyway, the reasoning why there might be surge is that Dimon is one of Wall Street's own and the financial community is likely to embrace him as it means at least for foreseeable future there will be someone who sees things from the same perspective and whatever the rhetoric, etc. things will be handled in a "friendly" manner.
That has many negative implications for sure and is why I personally don't think it is positive myself — but contrast that for example as to what would happen to the market if a Volcker or Stiglitz got appointed (highly unlikely as we know) and there was a belief that rationality would be interjected into the system as well as a viewpoint that was less sympathetic to the financial services industry and perish the thought — shifting back to the real economy and the workers and others with real jobs making real things — (this is where you play the video if you haven't already).
A long term move away from a "lets give everything and more to the banks" (and hints of shifting sentiment in that direction is beginning to emerge in DC and the media and has to be feared by those benefitting from current system) at least in my view would be a positive but in the short term it means the party is over no? But most people and Wall Street in particular doesn't think long term so WTF!
steveo77 whose comments made me decide to post this elaboration basically answered his own question as to why a Dimon appointment might be market positive, noting – "the blatant "double speak" seems completely in keeping with the current governmental tactics ….. that we could use Geitner for a scapegoat…and then pretend that we solved the problems of the past (NOT)."
Dimon is perceived as a rock star and winner in the current shakeup. Look at the bureaucrat chart Tim posted other day. With Jamie at the helm, Kudlow and others can say with straight face "out with the bureaucrats and in with a real no-nonsense banker dude who knows how to handle this mess and clean it up". Whether or not there is any truth to this is irrelevant but on the surface it has logic and can be used to hopefully build confidence and lure in more worried money.
Then we can get on with what steveo77 termed a "continuation of old school corruption and thus likely more money printing, driving USD down, and equities up."
Not going to resolve things but puts out immediate fire, provides hope and should allow for positive performance in 2010 or at least through first half and then we can come up with something else.
I could be missing something and totally wrong about this but do think this is the type of thinking that has to be going on in DC and that at least was the thinking behind original post and why I posted it here.
