Jamie Dimon Explains “Institutional Sclerosis”

“Institutional sclerosis” is the term JPMorgan (JPM) CEO Jamie Dimon used to describe financial markets at an FDIC conference yesterday. Dimon explained that this condition is when “you can’t move and can’t make a decision.”

True to his natal Mercury challenging natal Saturn, Dimon was not the bearer of happy talk. He said markets “should be prepared for bad events.” “If the economy turns down, the worst part will be in commercial banks.”

Dimon attributed the credit crisis to the “enormous pressure for growth.” I interpret that statement to mean the Federal Reserve’s overly accommodative monetary policy pushed Wall Street to engage in financial alchemy, creating all those crazy financial instruments to capitalize on cheap and easy credit. Dimon said “bad mortgage underwriting” caused the crisis as “collateral got far too leveraged.”

It would be a lot more interesting if Jamie Dimon replaced Bernanke and Paulson at tomorrow’s House Financial Services Committee hearing on financial market regulatory restructuring. He could elaborate on his view that “the three words that should never be used are ‘not politically feasible’.” With transiting Uranus in Pisces conjoining Dimon’s natal Sun, he could explain to the politicians that “sometimes you need a crisis to make change.”

Saturn in Virgo and Uranus and Pisces are about to face off later this year through mid 2010. This is a push/pull between maintaining the status quo (Saturn) versus major change that must dissolve (Uranus) what is beyond salvaging. Pluto will be back in Capricorn, transforming government and financial institutions that do not yet have the will to accept housing prices at the level that matches affordability under the new mortgage underwriting standards. Until they recognize that a $500,000 house is really only worth $300,000 when the buyer must put 20% down, economic malaise will be more painful and drag on far longer than it needs to.

* Jamie Dimon: March 13, 1956 time unknown New York City.
Disclosure: I own JPM shares through its acquisition of BSC.

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