Even here, on his own turf, they are giving Jamie Dimon a hard time.
“Um, yeah, my question is kind of broad?” begins a gawky guy who identifies himself as a Tufts student interning in Client Solutions. “Earlier this summer we had the LIBOR scandal that was involved with a lot of the big banks and led to the resignation of the CEO from Barclays. More recently we had Sandy Weill saying the banks needed to be broken up. With the banks so big, how is it possible to monitor every aspect?”
Next up is a scruffy-haired kid from the University of Miami: “With banking in a secular or cyclical decline, do you truly believe that this is a good place for us to start our careers, considering all of the other opportunities available to us?” he asks.
“In an industry associated with surprisingly low standards … ” a woman from Emory University starts to say.
“Whoa, whoa, whoa,” the JPMorgan Chase CEO interrupts, leaning into the microphone and peering out at the several hundred summer interns, sweating in their first business clothes, that have gathered in the auditorium of the former Bear Stearns building for a friendly Q&A session with the boss. “Before you go to the next level of generalizing, saying, ‘all bankers,’ ‘all banks.’ I don’t like that.” The room murmurs its assent as Dimon, pacing onstage in his summer uniform of a suit and no tie, warms to his topic. “I don’t buy this thing that our industry is responsible for all the ills of the world. We have great people at JPMorgan Chase. We operate with a lot of rigor. Our clients are happy with us. Sure, we make mistakes, like we have got this Whale thing. Businesses make mistakes. So we’ve got to clean them up, learn from them, and get better. And I want you to know the London Whale issue is dead,” he says. “The Whale has been harpooned. Dessicated. Cremated.” His voice carries over the students’ laughter. “I am going to bury its ashes all over.”
He’d certainly like to. But, “there’s a tail,” he concedes to me on a recent morning, sitting in his 48th-floor office, a homey space filled with knickknacks and family photos that requires passage through a gauntlet of machines and a security guard escort to reach. He means “tail” in the business-y sense, as in: The trading scandal that rocked the firm at the beginning of the year will have lasting repercussions. If he finds it at all amusing that actual whales have tails, he doesn’t show it. With his boyishly wavy hair and down-home platitudes, Dimon can come across like an overgrown frat boy. (“Don’t sell a product to anyone you wouldn’t sell your motha,” he likes to warn employees, in his Marky Mark–via–Queens accent.) But when it comes to this topic, he’s sober as a judge. You wouldn’t say his swagger has been trampled, more effortfully tempered. “I never get anxious,” he announces at one point. “I don’t normally.” This spring, though, was different.
At first, when questions came up about the activities of Bruno Iksil, a trader in the London-based Chief Investment Office who had taken such a massive position in the credit market that it caused waves in the sector (hence the nickname), Dimon was dismissive. “It’s a complete tempest in a teapot,” he told analysts, a comment that would come back to haunt him when repeated, ad nauseam, in escalating news stories that reported the London Whale’s activities had cost the firm $2 billion, then $3 billion, then close to $6 billion and counting.
“I had been told a whole bunch of stuff that made me think it was a tempest in a teapot,” he says now, adding that it was only when he laid eyes on the positions that he realized the extent of the problem. “There was a moment of, I can’t believe what we have.” For Dimon, who had boasted in the past of the bank’s risk management and “fortress balance sheet,” the blunder was particularly, specifically embarrassing, like Jerry Falwell getting caught with a hooker. “I saw it all pass in front of my eyes,” he says. “I saw the headlines, the investigations, the uproar, the breathlessness. ‘Dimon Loses Luster,’ ‘Dimon in the Rough.’ I told everyone, ‘This is going to be bad, it’s going to go on, and we can’t get out of it. So put your jerseys on: We’re going to wrestle this thing down and fix it.’ ” He went on Meet the Press: “We made a terrible, egregious mistake,” he told David Gregory, his Droopy-the-dog eyes conveying sincerity. Iksil and those who oversaw him were swiftly disappeared; top management was reorganized. “We had to review thousands of e-mails, minutes of tapes,” Dimon recounts. “We cleaned up the risk. It scared the daylights out of our people. We crossed the t’s and dotted the i’s and put in new rules, and we’re fine.” He says all this quickly, as though he’s told this story a million times and thinks this should have been the end of it.
Of course, this wasn’t the end of it, and Dimon has told this story a million times, including to the Senate Banking Committee, which called him down to explain himself in June. “That I did not expect,” he says.
Why would he have? Dimon has long enjoyed favored status in Washington. “That Jamie Dimon, he’s wonderful” one female senatorial staffer said to me last year, an unmistakable blush rising on her cheeks. After his eleventh-hour rescue of Bear Stearns in 2008, Dimon was elevated to the level of American hero. Or at least, as the Times put it, “America’s Least-Hated Banker.” But in the past few years, he’s been testing public affection by objecting—aggressively, sometimes callously—to what he sees as regulatory overreach. He expressed particular disdain for portions of the Volcker rule, a piece of legislation that seeks to limit banks’ proprietary trading. “Paul Volcker by his own admission has said he doesn’t understand capital markets,” Dimon told the Fox Business Network. “Honestly, he has proven that to me.” Meanwhile, the media that had lionized Dimon began to chafe at some of his condescending comments. “You don’t even make any money,” he told one group of reporters, mockingly.
This May, when JPMorgan disclosed the Whale’s losses, all of this pent-up resentment was unleashed into the unseasonably warm air. “The pedestal that [Dimon] so carefully constructed for himself is now vacant,” Graydon Carter wrote in Vanity Fair. Occupy Wall Streeters tweeted gleefully. Goldman Sachs, at long last, felt the Mantle of Evil being gently lifted off its shoulders. Representative Barney Frank and Senator Carl Levin went on television and sweatily proclaimed the losses would have been prevented under … yes! the very same aspects of the proposed Volcker Rule that Dimon had called “unnecessary.”
“This was perfect for everyone who was pushing for more regulation,” he says. “We handed it to them on a silver platter. And then I made that stupid comment about a tempest in a teapot.”
But it almost seems like he regrets the phrasing more than the actual sentiment. Seeing the losses bandied about as though it were the second coming of tarp clearly grates on his nerves. “It’s such a large number, but if you put it in perspective a little bit, if you had a $100 million market-cap bank that made something like $3 million that quarter and lost $3 million, you wouldn’t even talk about it,” he explains patiently. “That’s what this was. We didn’t even lose money this quarter. We earned $5 billion. The analysts estimate us having a record year.”
“We’re still pleading guilty to being stupid and dumb, though,” the PR guy sitting next to us interjects.
“It was the dumbest thing I have ever seen,” Dimon concurs. “It was so complex, so large, so illiquid, so stupid. It didn’t get the rigor that it should have entailed.” The woman in charge of the Chief Investment Office, Ina Drew, had been with the company three decades. Dimon says he was urged to hang her out to dry. “I felt terrible for her. I said, ‘Guys, that could be your mother. You want me to treat your mother that way?’ ” He accepted her resignation nonetheless, though it did not stop people from calling for his own.
Dimon knows what the next question is. “Did I ever consider resigning?” he asks preemptively. “No. People and companies make mistakes. I guarantee we’ll make a mistake next quarter. So what? Businesses make mistakes. Hopefully smaller, and fewer.”
Compounding his headaches, JPMorgan also recently disclosed that its records had been subpoenaed as part of the wide-ranging LIBOR investigation. And then there was Weill, Dimon’s mentor turned rival, who opened up a new can of worms when he appeared on CNBC last month with a fresh-off-the-yacht tan to lay the blame on the business model he and Dimon pioneered together. “What we should probably do is go and split up investment banking from banking,” he said, almost impishly.
At the mention of Weill, Dimon’s lips shrink into a hard line. He won’t address the CNBC appearance, or speak about Weill at all. “There are huge benefits to size,” he says instead, a distinct air of tired-of-this-shit creeping into his voice. “We bank Caterpillar in like 40 countries. We can do a $20 billion bridge loan overnight for a company that’s about to do a major acquisition. Size lets us build a $500 million data center that speeds up transactions and invest billions of dollars in products like ATMs and apps that allow your iPhone to deposit checks. We move $2 trillion a day, and you can see it by account, by company. These aren’t, like, little things. And they accrue to the customer. That’s what capitalism is.”
He takes a breath. “The whole world has become crazy. Businesses get attacked every time they do something.”
He’s being hyperbolic, but at the same time, the sense of menace is very real. Over the past several years, Dimon has received numerous death threats, and I was told when setting up this interview that it couldn’t occur outside the office for security reasons. (The need for bodyguards appears to offend his masculinity as well as his sense of justice.)
“Everyone is talking about the culture, the culture, and all that, and it’s just not true,” Dimon says. “Most bankers are decent, honorable people. We’re wrapped up in all this crap right now. We made a mistake. We’re sorry. It doesn’t detract from all the good things we’ve done. I am not responsible for the financial crisis,” he adds. “I hate to tell you. We were a port of safety in the storm. I find it unbelievable that that is the general theme—that you have to walk in a room and act like you are responsible for things you are not responsible for.”
He’s staring into the middle distance as he says all of this, as if addressing an invisible, unpersuadable audience. But when I ask if this episode has made him regret being such an outspoken defender of the banking industry, he looks at me point blank. “I’m an outspoken defender of the truth,” he corrects me. “Everyone is afraid of retaliation and retribution. We recently had an event with a hundred small bankers here, and 85 percent of them said they can’t challenge the regulation because of the potential retribution. That’s a terrible thing. Okay? This is not the Soviet Union. This is the United States of America. That’s what I remember. Guess what,” he says, almost shouting now. “It’s a free. Fucking. Country.”
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