I know, I know, this is my third post about sandwiches this week or something, but I wanted to tell everyone that The House of Dimon may be losing a few customers in the Seattle area today:

We just found out via the Twilight Exit facebook page that the bar/restaurant is offering a free dinner to anyone who closes an account at Chase Bank today.

It turns out Twilight owner Stephen Mollman has a mortgage through Chase and says the bank is penalizing him for paying his mortgage on time.

Steve’s serious, to the point where he says you can even come in and order the steak on the house if you give Chase Bank the heave-ho. I kind of want to call him and ask for more details but it’s 6:57AM in Seattle so I doubt he’d appreciate it.

There’s an outpouring of Chase haterade on the Twilight Exit’s facebook page, if you care to take a gander.

OMG both the “Lehman Brothers” and “Bitchfights” tags get to ride again! This time – it’s The Ghost Of Lehman Brothers vs. The House That Jamie Built:

The lawsuit, filed in federal bankruptcy court in New York City, takes special aim at senior JP Morgan officials, including CEO Jamie Dimon, alleging that these officials triggered Lehman’s meltdown by demanding $8.6 billion in collateral from the firm in September of 2008. The lawsuit contends that JP Morgan improperly took advantage of inside knowledge it had of Lehman deteriorating finances because it acted as a “clearing bank” or broker for other firms that were lending Lehman money during its final weeks and months. The suit seeks billions of dollars in damages.

JP Morgan vigorously denies the charges, and now FOX Business Network has obtained the firm’s preliminary plan to fight the charges if and when both sides go to court (the firm will likely seek a dismissal of the case). According to a senior JP Morgan executive, the plan is to put Lehman itself on trial, or to be more exact and former executives who ran the firm amid its deteriorating financial condition in the summer and fall of 2008.

There’s no defense like a good offense, and that’s the route that $JPM is choosing to take. It sounds like their plan is to point out the copious quantity of fail going on at Lehman, including but not limited to its excessive leverage, its proclivity to mark assets to whatever sounded good at the time, and, of course, to throw Dick Fuld under the bus, since doing so is what we’d pretty much call a “quick win” in business parlance.

Or to use the super-succinct phrasing of an anonymous senior official at $JPM:

“We are going to be really f—–g aggressive with this case because this is a total waste of f—–g time!”

Your lips to Jamie’s ears, anonymous senior official.

JPMorgan! They reported Friday – quadruple earnings score!

But, with bank earnings reports always comes the fail, and it’s hard to forget JPM acquired WaMu and have a lot of mortgages on their books, and that they’ve adjusted the fulcrum on the leverage teeter-totter further from the center than some of their peers. WSJ takes a look:

Take J.P. Morgan’s big mortgage book. More prime loans are defaulting. Second, the bank’s earnings are now being hit by mortgages it assumed in its emergency acquisition of Washington Mutual. Third, the cost of taking back badly written mortgages also caused a surprise dent to income.

I am not quite sure why we have to keep reminding people that the housing market has been fail for a long time and will continue to be fail for quite a while longer, but we do. WSJ also takes a look at the Q4 dip in bond trading revenue, but dismisses it as seasonal, which is exactly what I do at work when someone asks me why something has dropped and I really don’t have anything interesting to say.

To add insult to that injury, JPM is considered one of the banks which might get reamed by the bank tax we were discussing the other day (no accident that I put Dimon in the photo):

Perhaps the biggest threat for J.P. Morgan, though, is the financial overhaul being formulated by politicians and regulators. Its large investment bank, with big trading operations and derivatives exposure, puts it squarely in the cross hairs. For instance, as a big user of market funding, it looks set to be hit harder by the Obama administration’s proposed tax on bank liabilities. Indeed, on Friday’s call, Chief Executive James Dimon inferred the tax could make it less attractive for the bank to use so-called “repo” funding. This totaled $294 billion at the end of the third quarter, or a sizable 16% of J.P. Morgan’s liabilities.

Mo’ leverage, mo’ problems. Additionally, now that Basel is more than just an art festival, there’s speculation that JPM’s 20:1 capital ratio – higher than the 15:1 ratio at $GS – might be too high, and require them to raise additional scratch.

None of this seems to scare the D-man one whit, of course.

Not much one can do about mortgages, but we’d be super emo to see JPM pounded into submission by taxes, as they are one of the banks actually lending money right now, with unfreezing the credit markets being the function which was cited for maintaining the existence of the banks, after all (I mean, without lending, you’re just talking about a glorified safe deposit box):

Just look at the $10 billion of loans J.P. Morgan Chase and Bank of America Merrill Lynch are extending to back Hershey’s potential bid to buy Cadbury, according to Saturday’s Wall Street Journal. The equity component will come from Hershey selling new shares, from Hershey’s cash holdings and from investments from wealthy individuals.

That’s a big-ass loan, and would buy a lot of candy.

LoLo, Esq. sent me a text the other day about Plies’ “Plenty Money”, a hip-hop track that came out earlier this year. She said I had to look it up, that it reminded her of Jamie Dimon.

I’ve taken the liberty of rewriting a bit of it with him in mind:

I like my stocks hood, but all my bonds foreign
Just bought another thrift, the last one was boring
Ten-thousand CDOs, it feel like you tourin’
Congressmen dissin’ me, it really ain’t important
Show me your balance sheet, I bet yo losses showin’
You banks starvin’, my money over-flowin’
Tradin’ game sick, got the Journal adorin’
Catch me in the club wit’ all the ‘gnac pourin’
If I go back to Avra, I’ma have plenty stories
Sleep real good, ’cause I ain’t got no worries
Stay fresh everyday, holdings stay glowin’
I got plenty money and all you banks knowin’

Next month, guess what, I’m buyin’ NASA
‘Cause I’m startin’ to feel sorry for you lil’ bastards
I’m pretty hot, yo career a disaster
I control you bankaz, somethin’ like yo master
Few bil’ on the sidelines, gunnin’ SPY to close bettah
Stay from ’round me if you don’t like to smell cheddar
I ain’t tradin’ wit Bandit ’cause he a disaster
Wanna know who I’m f***in’, Ben Bernanke, I just married ‘er
She been good to me, I might 5-karat ‘er
Ran me out the TARP, I paid too many bonuses
Count so much money, ain’t no guvmint gon’ own us

Change the old sayin’, “don’ hate the game or the playa”

What’s in my pocket, dawg, big face hundreds
Just left the TALF, bought everything that I wanted
I kinda mad wit’ you haters, I’m real disappointed
‘Cause tell the shareholdaz, that I got plenty money
(Okay) I got plenty money, I got plenty money
(Okay) I got plenty money, I got plenty money
(Okay) I got plenty money, I got plenty money
(Okay) I got plenty money, I got plenty money
(Okay)

Full song is here, and it is hilarious. I can’t find an actual video; if there is one, somebody let me know (and please don’t make it your ringtone unless you ARE Jamie Dimon):

Hypothetically, if a bunch of bank CEOs were to get together to play some pickup basketball, it sure sounds like Jamie Dimon would be dunking all over Vikram Bandit and John Thain and Lloyd Blankfein and whomever else decided to show up and get taken to school. Because, when the NBA wanted to know how their teams could make it through the financial crisis, Jamie Dimon got the nod and everyone else got benched:

Jamie Dimon outlined yesterday the U.S. recession and tattered financial landscape facing owners of the National Basketball Association’s 30 franchises.

The chief executive officer of JPMorgan Chase & Co., the second-largest U.S. bank by assets, spoke with NBA owners at the St. Regis Hotel in New York for more than an hour. NBA Commissioner David Stern called it a “far-ranging discussion with a person of enormous knowledge about every aspect of the economy.”

Like the rest of corporate America, NBA franchises are wrestling with a recession that’s caused the worst job losses in the postwar era and prompted corporate cutbacks. Stern, without being specific, said he’s forecasting a decline in league revenue next season.

“It was a very broad discussion that did not focus on sports,” Stern said. “We have a business that is affected by every aspect of the economy.”

It’s not surprising that NBA teams are having issues with lines of credit, leases, etc – these issues are plaguing most businesses, well-run or not. Probably kind of nice for Dimon to have a day out of the office, too.

Meanwhile, back at the ranch, one of their analysts has been busy diagramming a large, heavy bus, with a number of banks thrown under it:

A report by JP Morgan analyst Matthew Jozoff is putting the spotlight back on the banks, where lately everything has been seen as rosy to quite rosy. Jozoff disagrees and in fact sees another $400 billion in losses as a result of the continuing credit deterioration, and very likely major new capital infusions needed… Among other things Jozoff points out is that banks will need to set aside an additional $215 billion in reserves against holdings of $2.1 trillion in residential loans not packaged into securities. As banks have taken only $85 billion in loss allowances as of Q4 2008, and Jozoff estimates the total expected residential losses at $300 billion (based on 12-16% losses on the total number mentioned above), banks will be hard pressed to fund this capital deficiency, especially now that each and every bank is rushing to repay the TARP that “it never needed in the first place.”

In other words, they’ve already written off tons of losses on their securities (mortgage-backed and otherwise), but prepare for another big round of writeoffs, these on actual LOANS that went bad. Oh, and as Jason wrote below related to BAC, expect credit card fail, too.

But, for now it looks like it’s all good in the hood at JPM. I’m waiting for a press release where Jamie Dimon paraphrases Mickey Avalon:

My bank – bigger than a bridge
Your bank look like a little kid’s
My bank – large like the Chargers, the whole team
Your bank got a market cap of $14

My bank need no introduction
Your bank don’t even function
My bank served a whole luncheon
Your bank – it look like a drive-in

My bank – is like super size
Your bank look like two fries
My bank – more mass than the Earth
Your bank- half staff, it needs work

My bank – been there done that
Your bank sits there with dunce cap
My bank – V.I.P.
Your bank needs I.D.

It’s time that we let the world know
Dude, you gotta let your bank go
J.D. is the best in the business
P.S. we got capital like Jesus

[Disclaimer: no position in JPM. Usually I don't bother with the disclaimers but that's because usually I'm not actually being rosy.]