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.”