Live From Capitol Hill, It’s Jamie Dimon

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Congress, how can you stay mad at a face like this? Photo: Jay Mallin/Bloomberg via Getty Images

It's nod-and-apologize time for Jamie Dimon. The JPMorgan Chase CEO will testify today in front of the Senate banking committee, whose members will grill him with a cornucopia of questions about the $2-billion-plus loss the bank sustained as the result of a certain cetacean trader in its chief investment office.

Among the questions Dimon's lawyers and PR folks no doubt posed to him in his pre-hearing "murder board" are: What did you, Jamie Dimon, know about the size of the London Whale's ill-fated trade when you called it a "tempest in a teapot?" When and why did the CIO change its risk model to one that you now say was flawed, and why didn't regulators stop it? Did you personally direct the CIO to begin taking big, risky directional positions to generate profits for the bank? How do you make your hair so smooth and regal-looking? (Okay, that one is probably not on the docket.)

There are few immediately apparent reasons why Dimon's blunder merits a full-blown Senate hearing, since the $2 billion loss hardly put the bank at risk of needing a taxpayer-funded bailout, and since there are few regulatory issues that couldn't be addressed with a strongly worded letter or two. But who are we to keep hopelessly conflicted politicians from scoring points back home at the expense of a Wall Street tycoon?

Let the Dimon dog-and-pony show begin!

9:30: A half-hour before Dimon's testimony begins, CNBC is in wall-to-wall Dimonpalooza mode, complete with a countdown clock. The network just showed a live feed of Dimon walking through the halls of a D.C. office building, wearing a purple tie. According to our authoritative source (a.k.a. the first Google result for "what do different colors mean?"), purple "is often used to portray rich powerful kings, leaders, wizards and magicians." Sounds about right!

9:45: For catch-up reading, check out Dimon's prepared testimony, and the WSJ and Bloomberg stories on what may have gone wrong in JPMorgan's chief investment office. As we noted this morning, Bloomberg's report is potentially very damaging for Dimon, because it hints that some of his own deputies are attempting to pin the blame for the lax oversight of the CIO on him.

10:00: We're off! And immediately, protestors! A group of rabblerousers inside the hearing room begin shouting "Stop foreclosures now!" before Dimon even begins to testify. They're being escorted out.

10:15: Senator Richard Shelby, the ranking member of the banking committee, who is from Alabama and has a hilarious Foghorn Leghorn accent, makes some introductory remarks. Like a good Republican, he attacks Fannie Mae and Freddie Mac, and suggests, "Perhaps the committee could turn its attention to the GSE’s massive losses when it completes its review" of JPMorgan. Not sure what this has to do with anything.

10:20: Dimon is now reading his prepared testimony out loud, emphasizing the bank's "fortress balance sheet," which means a sip in our JPMorgan Congressional Hearing Drinking Game.

10:30: It's Q&A time. Asked by committee chair Senator Tim Johnson why JPMorgan's risk model changed, Dimon says, "The old model was more accurate in hindsight than the new model." We feel you – this one time, we upgraded our iPhone software, and it totally messed up our Temple Run high scores.

10:32: Dimon is talking in jargon-y financial terms about the London Whale's trades. He says, "The synthetic credit portfolio itself always should have had more scrutiny." A few minutes later, Senator Shelby asks, "By synthetic credit portfolio, what do you mean?" This is more or less how things will go today.

10:35: Senator Shelby asks Dimon whether he'd prefer to go into a "closed hearing." Sexy!

10:40: Senator Chuck Schumer asks Dimon to describe JPMorgan's clawback policy for executive pay. Dimon says "it's pretty extensive," which means that Ina Drew, the bank's former CIO, should probably cancel that beach house renovation.

10:45: Senator Mike Crapo (D-Land of Funny Names) asks Dimon how banks should be regulated. Dimon says regulators should focus on "high capital, good liquidity standards," and other important things. An alien from outer space watching this testimony would probably ask why elected officials are asking for regulatory advice from the very people they are supposed to be regulating, but c'est la vie. 

10:50: Senator Jack Reed (D-RI) asks Dimon how, if the bank was betting on a particular credit instrument, it would also bet against that instrument. "How can you be on both sides of the trade and call it hedging?" If we were Dimon, we'd have said something like, "Oh, I don't know. Maybe because that is literally the exact definition of hedging. Seriously, you sit on the banking committee?" Dimon, to his credit, did not. Points for Dimon.

11:05: Senator Bob Menedez of New Jersey is winning the Zingers and Analogies portions of this hearing. He asked Dimon, "You said the hedge morphed – what did it morph into? Russian Roulette?" Later, he told Dimon that JPMorgan's "fortress balance sheet" had a "moat that was dug by taxpayers." Ba-boom!

11:10: Dimon is sipping Deer Park spring water. Shouldn't it be "Whale Park?" Ha! We slay ourselves. God, this is boring.

11:15: Sherrod Brown, the Democratic senator from Ohio, asks Dimon some actual incisive, pertinent questions about whether he approved the CIO's trading strategies, and whether regulators inside JPMorgan were told about the London Whale's trades before they were reported in the media. (Not cool, Senator.) Dimon says he did not approve the strategies, and that "the second we found out" about the London Whale's huge position, "the first people we got on the phone with were the regulators."

11:25: A senator from Nebraska whose name we missed tells Dimon, "You're just huge." (TWSS.) He also says, "I doubt you’re considering locating in my state, but it’d be a great place to do business." That's a reality show we'd watch – a bunch of Princeton lax bros who sign up for Manhattan i-banking jobs and get shipped to dairy farms in North Platte instead.

11:30: Now Dimon is being asked by Senator Jon Tester (D-Montana) about the probe of MF Global's collapse, since apparently that's fair game, too. We're getting a sandwich.

11:35: Dimon says he advocates letting big institutions fail, under the theory that "a little Old Testament justice" would be good for them. Ah, yes, we remember Leviticus 12:4 now: "Let not thy financial institutions be interconnected, for systemic risk will rain down."

11:45: Dimon is now giving a crowd-pleasing soliloquy on how the American economy bounced back from the financial collapse. "We have the widest, deepest, and best capital markets in the world," he says. USA! USA! USA!

11:55: Softball time is over, and Dimon is actually being grilled fairly well about the Volcker Rule (which he called "unecessary") and how he conceives of the CIO's current risk (despite the Whale loss, he says, "the current strategy is relatively safe").

12:10: Senator Kay Hagan is asking Dimon about the size of the London Whale's trade and the value-at-risk model that the bank changed, then changed back when it proved inaccurate. Dimon declines to comment on the specifics of the trade, since it's still being wound down and any new information could start hedge funds a-chattering, but he's more forthcoming bout the VaR model, which he says backtested better than the old one and seemed more accurate until the Whale's huge position came to light. "The future’s not the past. Things change," Dimon says, channeling something we're pretty sure our high school commencement speaker told us.

12:15: Hearing adjourned. Overall, not a bad showing by Dimon, or by the senators, who redeemed themselves for a meandering, aimless set of uninformed questions there at the end. No real revelations, but the catharsis of seeing Dimon raked over the coals was real for Main Street, and we even learned a little about the way JPMorgan conceives of risk. C-SPAN's camera caught someone yawning heavily while walking out of the hearing room – which pretty much says it all.