Whose bad news is Cyprus burying?

JPMorgan, SAC Capital, HSBC breathe a sigh of relief.

As CNBC's John Carney points out, it's a great time to bury bad news.  While everyone looks at Cyprus, JPMorgan Chase's story has been dropped by most publications - which is a good thing for them, as their panel hearing on Friday did not go well...

So here it is in brief, via extracts from the New York Times report, during which CEO Douglas Braunstein is berated "for nearly an hour":

For nearly an hour, the executive, Douglas L. Braunstein, was berated for playing down JPMorgan’s risky bets to investors and regulators on a conference call in April, just weeks before the bank disclosed the costly blowup.

“You give this very glowing call,” said Senator Carl Levin, Democrat of Michigan, “instead of telling them what you knew” — that the portfolio “had been losing money and violating risk limits.”

Mr. Braunstein defended his statements in the conference call, saying they were the most “accurate” depiction based on the information at the time.

“You thought that was a balanced presentation?” Mr. Levin asked incredulously, peering over his glasses.

..and during which Ina Drew, the former head of JPMorgan’s chief investment office (which was at the centre of the scandal), also comes under some aggressive over-the-glasses peering:

While Ms. Drew acknowledged that “things went terribly wrong,” she directed virtually all of the blame at lower-level traders in London and other subordinates. She returned to this defense throughout the hearing, deflecting culpability by faulting inaccurate information.

..eventually all this the blame-shifting starts prompting sarky comments from John McCain, the chief Republican on the panel:

“The traders seemed to have more responsibility and authority than the higher-up executives,” he said.

..and even Michael Cavanagh, co-head of the corporate and investment bank, which was more removed from the scandal, is questioned closely and sarcastically:

But Mr. Levin persisted, asking, “How do you possibly justify your process?” Was it a “coincidence,” he asked, that the models shifted just as losses on the trades were ballooning? At one point, he reminded Mr. Cavanagh that he was under oath.

The other pieces of submerged bad news are a money laundering fine for HSBC, and a record insider trading fine for SAC Capital - of $6000m, announced on Friday. This is huge (c.f. the second largest SEC insider trading sanction was $156 m, paid by Galleon Group founder Raj Rajaratnam back in May 2011).

"These settlements call for the imposition of historic penalties," SEC's George Canellos said during a press conference call on Friday.

 

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On civil liberties, David Davis has become a complete hypocrite – and I'm not sure he even knows it

The Brexit minster's stance shows a man not overly burdened with self-awareness.

In 2005, David Davis ran for the Tory leadership. He was widely assumed to be the front-runner and, as frontrunners in Tory leadership campaigns have done so enthusiastically throughout modern history, he lost.

The reason I bring up this ancient history is because it gives me an excuse to remind you of this spectacularly ill-judged photoshoot:


“And you're sure this doesn't make me look a bit sexist?”
Image: Getty

Obviously it’s distressing to learn that, as recently as October 2005, an ostensibly serious politician could have thought that drawing attention to someone else’s boobs was a viable electoral strategy. (Going, one assumes, for that all important teenage boy vote.)

But what really strikes me about that photo is quite how pleased with himself Davis looks. Not only is he not thinking to himself, “Is it possible that this whole thing was a bad idea?” You get the distinct impression that he’s never had that thought in his life.

This impression is not dispelled by the interview he gave to the Telegraph‘s Alice Thompson and Rachel Sylvester three months earlier. (Hat tip to Tom Hamilton for bringing it to my attention.) It’s an amazing piece of work – I’ve read it twice, and I’m still not sure if the interviewers are in on the joke – so worth reading in its entirety. But to give you a flavour, here are some highlights:

He has a climbing wall in his barn and an ice-axe leaning against his desk. Next to a drinks tray in his office there is a picture of him jumping out of a helicopter. Although his nose has been broken five times, he still somehow manages to look debonair. (...)

To an aide, he shouts: “Call X - he’ll be at MI5,” then tells us: “You didn’t hear that. I know lots of spooks.” (...)

At 56, he comes – as he puts it – from “an older generation”. He did not change nappies, opting instead to teach his children to ski and scuba-dive to make them brave. (...)

“I make all the important decisions about World War Three, she makes the unimportant ones about where we’re going to live.”

And my personal favourite:

When he was demoted by IDS, he hit back, saying darkly: “If you’re hunting big game, you must make sure you kill with the first shot.”

All this, I think, tells us two things. One is that David Davis is not a man who is overly burdened with self-doubt. The other is that he probably should be once in a while, because bloody hell, he looks ridiculous, and it’s clear no one around him has the heart to tell him.

Which brings us to this week’s mess. On Monday, we learned that those EU citizens who choose to remain in Britain will need to apply for a listing on a new – this is in no way creepy – “settled status” register. The proposals, as reported the Guardian, “could entail an identity card backed up by entry on a Home Office central database or register”. As Brexit secretary, David Davis is the man tasked with negotiating and delivering this exciting new list of the foreign.

This is odd, because Davis has historically been a resolute opponent of this sort of nonsense. Back in June 2008, he resigned from the Tory front bench and forced a by-election in his Haltemprice & Howden constituency, in protest against the Labour government’s creeping authoritarianism.

Three months later, when Labour was pushing ID cards of its own, he warned that the party was creating a database state. Here’s the killer quote:

“It is typical of this government to kickstart their misguided and intrusive ID scheme with students and foreigners – those who have no choice but to accept the cards – and it marks the start of the introduction of compulsory ID cards for all by stealth.”

The David Davis of 2017 better hope that the David Davis of 2008 doesn’t find out what he’s up to, otherwise he’s really for it.

The Brexit secretary has denied, of course, that the government’s plan this week has anything in common with the Labour version he so despised. “It’s not an ID card,” he told the Commons. “What we are talking about here is documentation to prove you have got a right to a job, a right to residence, the rest of it.” To put it another way, this new scheme involves neither an ID card nor the rise of a database state. It’s simply a card, which proves your identity, as registered on a database. Maintained by the state.

Does he realise what he’s doing? Does the man who once quit the front bench to defend the principle of civil liberties not see that he’s now become what he hates the most? That if he continues with this policy – a seemingly inevitable result of the Brexit for which he so enthusiastically campaigned – then he’ll go down in history not as a campaigner for civil liberties, but as a bloody hypocrite?

I doubt he does, somehow. Remember that photoshoot; remember the interview. With any other politician, I’d assume a certain degree of inner turmoil must be underway. But Davis does not strike me as one who is overly prone to that, either.

Jonn Elledge edits the New Statesman's sister site CityMetric, and writes for the NS about subjects including politics, history and Daniel Hannan. You can find him on Twitter or Facebook.

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