Felix on the Madoff/Chase connection.

Count on Felix Salmon to aggregate, interpret and expand upon all the good stuff on the Madodff/Chase connection.  The best of it is the part where Chase leaves its customers exposed to Madoff malefactions while Chase itself tiptoes quietly to the door.  Which recalls a venerable UB lament: there used to be when your banker was your friend--your business counselor, a man with fiduciary responsibilities which he (sometimes) took seriously. At some point (I'd set the date at 1994) the business model morphed into something about screwing your client (here's another great recent example [but see note infra] from Boston Review, via Zero Hedge).  And the hell of it is, like Goldman Sachs offloading John Paulson's shorts, it may all be perfectly legal.

The other hell of it is that Chase is the bank run by a guy who is actually supposed to know what he is doing--not like Stan O'Neal sulking alone on the golf course, or Jimmy Cayne at  the bridge table, or Dick Fuld hunkered down in his bunker after the manner of Howard Hughes or Mistah Kurtz.  Jamie Dimon and his gaggle of cheerleaders would have you believe that their guy is Mr. Hands-on Competence.  Maybe he can explain it all to us someday from his retirement perch as a visiting professor of ethics at the Harvard Business School.

Fn.  A couple of years back, I would have thought that Irving Picard was taking on the most thankless job in modern finance.  Now I'm looking forward to his first appearance to do a top ten on the Letterman show.

Note:  Epicurean Dealmaker thinks it's baloney; that the bank was just selling a product.  He does acknowledge that the bank blurs the distinction by describing its pigeons "customers" as "clients." He might be right: why I said it might all be perfectly legal-these cases are highly cotextualized and I wouldn't be at all surprised to see the bank take a walk. The fact would remain, though, that the bank profits from this ambiguity; that it makes its money at best by walking both sides of the street.