By Pam Martens: April 10, 2014

Too-big-to-fail Wall Street mega banks are now one part bank, one part legal defense and one part confidence-game.

JPMorgan’s Chairman and CEO, Jamie Dimon, whose career has now survived more scandals in the past two years than most business titans ever see in a lifetime, has penned a masterful 32-page head-fake to shareholders.

Dimon tells shareholders that the company has “consistently shown good financial performance” while distancing himself from the $30 billion the company has paid out in fines and settlements for a rash of misdeeds since January 2013. The word “fortress” appears five times in the letter with the oft-expressed “fortress balance sheet” morphing additionally into the “fortress control system” and the “fortress company.” Dimon’s photo appears alongside the letter, clad in a navy jacket and blue shirt. Next year he might want to complete the fortress analogy by donning a Knight’s metal armor.

Dimon says the year was “marred by significant legal settlements largely related to mortgages.” In fact, just 7 days after the 2013 fiscal year ended, JPMorgan paid $2 billion and made history in being the first Wall Street mega bank to be charged with two felony counts and receive a deferred prosecution agreement. The matter had nothing to do with mortgages. The bank was charged with aiding and abetting the Madoff fraud – the largest Ponzi scheme in the history of modern finance.

In September of last year, JPMorgan settled its London Whale fiasco for $920 million in penalties. That had nothing to do with mortgages either. It involved using insured deposits from its commercial bank to gamble in exotic derivatives in London; hide the losses from its shareholders initially and then misstate the amount of the losses to regulators. Early on when the press got wind of the matter, Dimon called it a “tempest in a teapot.” The losses totaled at least $6.2 billion when the company stopped reporting them.

Then there were settlements related to rigging electric rates, rigging the interest rate benchmark Libor, and abusing credit card customers. Zip, zip, and zip to do with mortgages.

Dimon’s letter carries no reference to the words “Madoff,” “London Whale,” or “Libor.” Instead, he goes with: “There is much to say and a lot to be learned in analyzing what happened, but I am not going to do so in this letter — more distance and perspective are required.”

Good idea. Distance shareholders from the sordid details and now infamous frauds and use mind-twisting axioms instead. Here’s an example: “When I look back at our company last year with all of our ups and downs, I see it as A Tale of Two Cities: ‘It was the best of times, it was the worst of times.’ We came through it scarred but strengthened — steadfast in our commitment to do the best we can.”

According to the online Random House Dictionary, “scarred” means a “lasting after effect of trouble”; “strengthened” means to “grow stronger.” How exactly does one grow stronger by permanently scarring their reputation?

Next Dimon takes us into the nitty-gritty figures of a global bank operating in 60 countries that moves “up to $10 trillion a day” and lends or raises “capital of over $500 billion each quarter” in markets covering “5.6 billion people who speak 100+ languages and use close to 50 currencies.”

How is all that helping the growing problem of the long-term unemployed in America? Out of total deposits of $1.3 trillion, Dimon says that a mere $19 billion of credit was extended to U.S. small businesses last year. And yet, that’s a key U.S. engine of job growth. In contrast, the bank “provided $274 billion of credit to consumers,” raising the concern that the weak job market and stagnating wages are forcing more households into deeper debt.

Dimon also said the bank plans to slim down in some areas. Here’s the businesses JPMorgan is exiting. (Dimon admits that some are “not customer friendly” while others are just too small. The thought immediately arises, what took JPMorgan so long to figure out some businesses weren’t “customer friendly”? Did regulators or Congress have to explain it to them? In the case of identity theft protection, and physical commodities, two categories listed below, it seems the revelation did come from regulators and the U.S. Senate.)

Businesses Being Exited:

• One Equity Partners
• Physical Commodities
• Global Special Opportunities Group
• Student Lending Originations
• Canadian Money Orders
• Co-Branded Business Debit Cards and Gift Cards
• Rationalization of Products in Mortgage Banking
• Identity Theft Protection
• Credit Insurance