The man who can save Wall St.

JP Morgan, paragon of virtue:

One of them is JPMorgan Chase (JPM), whose chief executive, Jamie Dimon, has largely escaped the pitchforks aimed at his fellow Wall Street CEOs. Over the course of the financial crisis, JPMorgan Chase remained profitable, a pillar of relative stability in the midst of an earthquake. The bank absorbed the failed Bear Stearns and Washington Mutual, while accepting $25 billion in bailout money that it paid back with interest once the government allowed it to. Through it all, Dimon consulted frequently with officials in Washington, and news reports have even depicted him as President Barack Obama's favorite banker.

A new biography of Dimon, Last Man Standing by Duff McDonald, describes Dimon as a diligent and trustworthy executive who has risen above the swill of Wall Street. I spoke recently with McDonald about the man some think will be the next treasury secretary. Excerpts:
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There's a deep sense of integrity that guides his decision making. The guy is motivated. He absolutely wanted to be rich, and he is rich. Paired with that is a deep sense of doing the right thing. Despite what populist anger seems to be suggesting these days, these are not inconsistent beliefs in America.

One target of their anger is Larry P. Langford, who was the county commission’s president in 2003 and 2004 and is now mayor of Birmingham. The 61-year-old Democrat goes on trial today, charged in a November 2008 federal indictment with taking cash, Rolex watches and designer clothes in exchange for helping to steer $7.1 million in fees to an Alabama investment banker as the county refinanced its sewer debt.

Jefferson County’s debacle is a parable for billions of dollars lost by state and local governments from Florida to California in transactions done behind closed doors. Selling debt without requiring competition made public officials vulnerable to bankers’ sales pitches, leaving taxpayers to foot the bill for borrowing gone awry.

Swaps Blew Up

Under Langford’s stewardship, the county bet on interest- rate swaps, agreements that a representative of New York-based JPMorgan Chase & Co. told commissioners could reduce their interest costs. Instead, the swaps -- covering more than $5 billion in all -- blew up during the credit crisis after ratings for the county’s bond insurers fell.

JPMorgan, through spokeswoman Christine Holevas, declined to comment for this story.
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JPMorgan disclosed in May that the SEC is investigating the bank’s role in selling the financing structure to the county. The regulatory agency, along with the U.S. Justice Department, is also conducting a nationwide investigation into alleged bid- rigging or collusion in the sale of “municipal derivatives.”

Way to rise above the swill of Wall St.