If further proof was needed that banking today has almost nothing to do with lending money to those who want to do something productive, then JP Morgan has surely provided it. The activities which have cost $2 billion (and counting) are described by the banks’ apologists as hedging, but it’s plain that the hedges were so scruffy as to represent an abuse of the term. Proprietary trading would be a better description, an activity akin to punting savers’ cash on the 3.30 at Kempton Park.

Jamie Dimon is now feted to have “tempest in a teapot” as his epitaph as surely as Chuck Prince will have “you’ve got to get up and dance” engraved on his tomb. Given the complexity of modern banking, it’s hardly surprising that the chief executive didn’t know what the traders in the London office were doing; even now, Dimon seems incapable of explaining exactly what they were up to. It may be that he’s trying to protect what’s left of the bank’s position, or it may be that it’s just too difficult for him to grasp and put into plain English.

In a way, that’s understandable. If you thought indices were designed to measure movements of stocks and bonds, you’re way out of date. The kaleidoscope of constantly evolving measurements now allows bets on differences between indices, differences between derivatives,  and differences between differences. It’s enough to make your head spin, and you really can’t expect the ceo to understand all this for $20 million a year.

What’s much worse is the wilful way Dimon and co brushed aside the strange noises coming out of the engine room in London. Here’s a golden rule for the the ceo of any large organisation: if rumours of trouble in the empire have reached your ears, you can be sure they’re well established.  Assume they are wrong at your peril.