Jamie dimon first business venture selling greeting cards, Is Jamie Dimon a straight-shooting managerial genius, who made JPMorgan Chase the only “port in the storm” during the financial meltdown—the latest coup in his brilliant financial career? Or a knee-jerk opponent of bank reform, in denial about the recent, humiliating $6 billion blunder in JPMorgan’s London office? Or both? William D. Cohan and Bethany McLean put “the King of Wall Street” on the grill.
n a recent August morning in the ballroom of the Townsend Hotel, in the affluent town of Birmingham, Michigan, Jimmy Lee, the vice-chairman of investment banking at JPMorgan Chase and one of the grand old men of Wall Street deal-makers, was quoting General George S. Patton Jr. “Moral courage is the most valuable and usually the most absent characteristic in men,” Lee told the audience of 150 or so JPMorgan Chase clients, who were gobbling up berry parfaits and quiches under crystal chandeliers.
Patton, none of the older people there needed reminding, was the swashbuckling military genius who led his troops through fierce fighting in North Africa, Sicily, and France during World War II. But Lee was not interested in the war hero per se. Rather, without a trace of irony, he was using Patton’s words to describe his boss Jamie Dimon, JPMorgan Chase’s C.E.O. “Jamie Dimon,” said Lee, “has moral courage running through his veins.”
If moral courage consists of speaking your mind wherever you are and whenever you like, then certainly Dimon, like Patton, has got that. When, a few minutes later, Dimon, dressed casually in white sneakers, Wrangler jeans, and a blue Vineyard Vines polo shirt, took the podium from Lee, he weighed in on everything from last summer’s debt-ceiling crisis (“a disgrace”) to the tax system (also “a disgrace”), to his former mentor Sandy Weill’s recent pronouncement that the big banks should be broken up (“Just because another bank messed up doesn’t mean we should take apart JPMorgan. . . . If there isn’t a JPMorgan straddling the globe serving clients, then a Chinese bank will happily fill that role”), to the wisdom of Obamacare (“I was in favor of universal health care, but what we did didn’t fix the problem; we just did the universal part”).
And as everyone who knows Dimon expected him to do, he offered up a full-throated defense of businessmen and a plea to end what he calls the “regulatory assault” on Wall Street. “It may seem that businesses go to Washington and complain a lot—like a boy who cries wolf,” he said, “but there are real issues here that are important for our country and our industry. The denigration of business hurts America, because the secret sauce for our economy is confidence I don’t want to hear that nonsense that all business is bad.”
The Detroit area was the sixth stop on Dimon’s third JPMorgan Chase bus tour, which is designed to demonstrate to clients, employees, and important people around the country that the bank is a force for good in the world. Instead of relaxing in the Hamptons, Nantucket, or Montana, like many other Wall Street executives, Dimon and a small group of his acolytes were zipping through steamy midwestern towns and cities. At stop after stop, the executives emerged from their bus cocoon into what they called “the Tunnel of Love,” where employees surrounded them for hugs, fist pumps, and high fives. In Findlay, Ohio, a teller cried when she had her picture taken with Dimon. “Did you see that?” Dimon asked when he got back on the bus. “That’s what I’m talking about—companies are made up of real people who give a damn!”
They routinely took “hostages”—employees, such as tellers, branch managers, and small-business bankers—aboard the bus. When one hostage, a blonde teller, said she used to be a hairdresser, Dimon joked, “I love your hair.” The hostages, in turn, told the executives what they could do better, like simplifying the computer screen tellers use. Over the three tours many such ideas have been put into practice. (There’s a spreadsheet to keep track, as there always is in JamieWorld.)
The JPMorgan team ate ButterBurgers at Culver’s, in Findlay. On the bus, Dimon danced to his favorite song, “Stand by Me,” and offered a prize to anyone who could identify a more obscure tune (“Post Break-Up Sex,” by the Vaccines). Dimon recalls that when he e-mailed his senior executives, back in 2010, first proposing the bus trip, there was resistance, including security concerns. But, as in almost everything related to JPMorgan, Dimon prevailed. “That’s bullshit. We have to live our lives and do the right thing,” he told them.
But this year a sour note hung over the trip. The headlines in the business press were dominated by reports of the London Whale, the nickname for a JPMorgan trader whose huge, risky, and esoteric bets have cost the bank nearly $6 billion and counting. It was a major embarrassment for Dimon and a rare miscue in his otherwise charmed seven years at the top of JPMorgan Chase.
In first announcing the trading losses, at a hastily convened conference call for analysts and the media on May 10, Dimon knew he would get skewered. “It plays right into the hands of a bunch of pundits out there,” he said at the time. “But that’s life…. We have egg on our face. We deserve any criticism we get.”
After spending much of July 13 again explaining the trading loss to the media and to research analysts—including making the stunning admission that the traders in London may have intentionally mismarked the trades to make them look less egregious, a potential illegality that the Justice Department is still investigating—the exhausted Dimon got an unexpected call from Tom Brady, the star quarterback of the New England Patriots. (Jimmy Lee, a legendary sports fan, had arranged for it.) Brady reminded Dimon that even Super Bowl champs have bad days and told him “to hang in there.” “I was surprised he even knew who I was, to tell you the truth,” Dimon says.
On the bus tour, Dimon might have hoped for a respite from the trading blunder. Unfortunately, the logo on the Vineyard Vines polo shirts that the JPMorgan Chase executives were wearing through the heartland was a whale, and so, there it was—on the sleeve of every corporate shirt—the very symbol of Dimon’s singular management failure. The subject of the disastrous bet came up at each stop, and each time Dimon had his pat response ready: “The London Whale drama has been harpooned, beached, eviscerated, cremated, and killed. So help me God! It’s fish food.”
But it’s not that simple. Dimon was supposed to be “the port in the storm” (his words), and JPMorgan Chase was the bank that didn’t need a bailout (as he repeatedly says), the one that saved Bear Stearns in March 2008 and then preserved some 30,000 jobs at Washington Mutual by taking it over when no other institution would.
He’s the C.E.O. who didn’t allow his firm to make some of the risky mortgage-related bets that every other firm did, and the one who pores over the details of one financial report after another until he understands every last iota about his mega-bank, which has some $2.3 trillion in assets—one-sixth of the total in the U.S. banking sector. But Bill Daley, who served as JPMorgan’s Midwest chairman before he became Obama’s chief of staff, from 2011 until earlier this year, says in Dimon’s defense, “This wasn’t so much about the details as it was the fact that the man viewed as Mr. Details didn’t seem to have the details.”
Which raises the crucial question: How did one of the most anal, numbers-oriented C.E.O.’s on Wall Street allow a bunch of traders in London to make such a huge, concentrated—and losing—bet and not know about it until it was too late?
n a recent August morning in the ballroom of the Townsend Hotel, in the affluent town of Birmingham, Michigan, Jimmy Lee, the vice-chairman of investment banking at JPMorgan Chase and one of the grand old men of Wall Street deal-makers, was quoting General George S. Patton Jr. “Moral courage is the most valuable and usually the most absent characteristic in men,” Lee told the audience of 150 or so JPMorgan Chase clients, who were gobbling up berry parfaits and quiches under crystal chandeliers.
Patton, none of the older people there needed reminding, was the swashbuckling military genius who led his troops through fierce fighting in North Africa, Sicily, and France during World War II. But Lee was not interested in the war hero per se. Rather, without a trace of irony, he was using Patton’s words to describe his boss Jamie Dimon, JPMorgan Chase’s C.E.O. “Jamie Dimon,” said Lee, “has moral courage running through his veins.”
If moral courage consists of speaking your mind wherever you are and whenever you like, then certainly Dimon, like Patton, has got that. When, a few minutes later, Dimon, dressed casually in white sneakers, Wrangler jeans, and a blue Vineyard Vines polo shirt, took the podium from Lee, he weighed in on everything from last summer’s debt-ceiling crisis (“a disgrace”) to the tax system (also “a disgrace”), to his former mentor Sandy Weill’s recent pronouncement that the big banks should be broken up (“Just because another bank messed up doesn’t mean we should take apart JPMorgan. . . . If there isn’t a JPMorgan straddling the globe serving clients, then a Chinese bank will happily fill that role”), to the wisdom of Obamacare (“I was in favor of universal health care, but what we did didn’t fix the problem; we just did the universal part”).
And as everyone who knows Dimon expected him to do, he offered up a full-throated defense of businessmen and a plea to end what he calls the “regulatory assault” on Wall Street. “It may seem that businesses go to Washington and complain a lot—like a boy who cries wolf,” he said, “but there are real issues here that are important for our country and our industry. The denigration of business hurts America, because the secret sauce for our economy is confidence I don’t want to hear that nonsense that all business is bad.”
The Detroit area was the sixth stop on Dimon’s third JPMorgan Chase bus tour, which is designed to demonstrate to clients, employees, and important people around the country that the bank is a force for good in the world. Instead of relaxing in the Hamptons, Nantucket, or Montana, like many other Wall Street executives, Dimon and a small group of his acolytes were zipping through steamy midwestern towns and cities. At stop after stop, the executives emerged from their bus cocoon into what they called “the Tunnel of Love,” where employees surrounded them for hugs, fist pumps, and high fives. In Findlay, Ohio, a teller cried when she had her picture taken with Dimon. “Did you see that?” Dimon asked when he got back on the bus. “That’s what I’m talking about—companies are made up of real people who give a damn!”
They routinely took “hostages”—employees, such as tellers, branch managers, and small-business bankers—aboard the bus. When one hostage, a blonde teller, said she used to be a hairdresser, Dimon joked, “I love your hair.” The hostages, in turn, told the executives what they could do better, like simplifying the computer screen tellers use. Over the three tours many such ideas have been put into practice. (There’s a spreadsheet to keep track, as there always is in JamieWorld.)
The JPMorgan team ate ButterBurgers at Culver’s, in Findlay. On the bus, Dimon danced to his favorite song, “Stand by Me,” and offered a prize to anyone who could identify a more obscure tune (“Post Break-Up Sex,” by the Vaccines). Dimon recalls that when he e-mailed his senior executives, back in 2010, first proposing the bus trip, there was resistance, including security concerns. But, as in almost everything related to JPMorgan, Dimon prevailed. “That’s bullshit. We have to live our lives and do the right thing,” he told them.
But this year a sour note hung over the trip. The headlines in the business press were dominated by reports of the London Whale, the nickname for a JPMorgan trader whose huge, risky, and esoteric bets have cost the bank nearly $6 billion and counting. It was a major embarrassment for Dimon and a rare miscue in his otherwise charmed seven years at the top of JPMorgan Chase.
In first announcing the trading losses, at a hastily convened conference call for analysts and the media on May 10, Dimon knew he would get skewered. “It plays right into the hands of a bunch of pundits out there,” he said at the time. “But that’s life…. We have egg on our face. We deserve any criticism we get.”
After spending much of July 13 again explaining the trading loss to the media and to research analysts—including making the stunning admission that the traders in London may have intentionally mismarked the trades to make them look less egregious, a potential illegality that the Justice Department is still investigating—the exhausted Dimon got an unexpected call from Tom Brady, the star quarterback of the New England Patriots. (Jimmy Lee, a legendary sports fan, had arranged for it.) Brady reminded Dimon that even Super Bowl champs have bad days and told him “to hang in there.” “I was surprised he even knew who I was, to tell you the truth,” Dimon says.
On the bus tour, Dimon might have hoped for a respite from the trading blunder. Unfortunately, the logo on the Vineyard Vines polo shirts that the JPMorgan Chase executives were wearing through the heartland was a whale, and so, there it was—on the sleeve of every corporate shirt—the very symbol of Dimon’s singular management failure. The subject of the disastrous bet came up at each stop, and each time Dimon had his pat response ready: “The London Whale drama has been harpooned, beached, eviscerated, cremated, and killed. So help me God! It’s fish food.”
But it’s not that simple. Dimon was supposed to be “the port in the storm” (his words), and JPMorgan Chase was the bank that didn’t need a bailout (as he repeatedly says), the one that saved Bear Stearns in March 2008 and then preserved some 30,000 jobs at Washington Mutual by taking it over when no other institution would.
He’s the C.E.O. who didn’t allow his firm to make some of the risky mortgage-related bets that every other firm did, and the one who pores over the details of one financial report after another until he understands every last iota about his mega-bank, which has some $2.3 trillion in assets—one-sixth of the total in the U.S. banking sector. But Bill Daley, who served as JPMorgan’s Midwest chairman before he became Obama’s chief of staff, from 2011 until earlier this year, says in Dimon’s defense, “This wasn’t so much about the details as it was the fact that the man viewed as Mr. Details didn’t seem to have the details.”
Which raises the crucial question: How did one of the most anal, numbers-oriented C.E.O.’s on Wall Street allow a bunch of traders in London to make such a huge, concentrated—and losing—bet and not know about it until it was too late?
