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Index

Adjustable-rate hybrid mortgages, buys Merrill Lynch, 27 197 and collateralized debt obligations Adrian, Tobias, 201 (CDOs), 17 Alt-A mortgages, 17–18, 168 Bank One, 51, 92 American Capital Management and acquired by JPMorgan Chase, 10, Research, 78 132, 134 American Express, 58–59, 75 appoints Dimon chairman and American International Group CEO, 103–105 (AIG), 26, 158–159, 183, 196 contacts Dimon about becoming Arbitrage, 16 http://www.pbookshop.comCEO, 94–95 Assets, stress testing, 165–166, 196 corporate culture, 108–109, 119 creation of, 96 Bailouts, 6, 182–186 customer service, 127–128 Bear Stearns,COPYRIGHTED 11–12, 31 Dimon MATERIAL begins work, 105–107 Bair, Sheila, 174, 197 employee compensation, 124–125 Balance sheet. See Fortress history, 96–97 balance sheet management changes, 113–115 Banc One, 96–97, 158 problems with combining with Bank holding companies, 96, 183 JPMorgan Chase, 139–142 Bank investments, 184–186 proﬁ tability problems, 97–99 Bank of America, 5, 149, 182 restoring proﬁ tability, 130–132

235

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Bank One (Continued) Chase, 137–138 search for CEO, 95–102 Chernow, Ron, 137 turnaround, 13, 111–132 Citicorp, 85–89 BarclaysAmerican Corporation, Citigroup, 5, 10, 31, 61, 158 74, 183 and collateralized debt obligations Bear Stearns, 23, 149 (CDOs), 17 acquired by JPMorgan Chase, 4, 5, contrasts with JPMorgan 25–45 Chase, 169 bailout, 11–12 creation of, 87, 96 efforts to reduce risk, 41–42 Dimon ﬁ red as president, 49–50, hedge funds collapse, 36 72, 83, 89–90 purchase step-by-step, 32–41 and Enron, 138 run on bank, 34, 35, 37 offers to buy Wachovia, 183 sells for $10/share, 40 and SIVs, 16 tries to assure market place about and subprime mortgages, capitalization, 36 149–150 Berkshire Hathaway, 84 City National Bank (CNB), 96 Bernanke, Ben, 34, 200 Cogan, Berlind, Weill & Levitt Bibliowicz, Jessica, 50, 73, 81–83, 90 (CBWL), 58 Black, Steve, 34, 39, 89, 144, Collateralized debt obligations 148, 151 (CDOs), 16, 17, 148, 150, 151, Bloomberg, Michael, 51, 91 168, 191 Bookstaber, Richard, 87, 88–89, 190 Commercial Credit Company, 10, Brown, Thomas, 29, 100–101, 143, 59–61, 67 151, 157, 198 changes name to Primerica, 65 Brunnermeier, Markus K., 192, 194, corporate culture, 63–64 195, 196, 201, 204 Dimon becomes CFO, 62–63 Buffett, Warren, 84,http://www.pbookshop.com 128, 129, Dimon’s career at, 60–65 168–170 and loan delinquencies, 161 Burke, Steve, 14, 55, 135, 142, 151, Compensation, employee, 205–206 167, 206, 212, 214 at Bank One, 124–125 Burner, Paul, 60 at JPMorgan Chase, 145 Consistency, 212 Califano, Joseph A. Jr., 66, 104, 210 Consumer protection, 197 Carter, Berlind, Potoma, & Weill, 58 Control Data Corporation, 59–60 Cavanagh, Mike, 39, 114, 115 Corporate culture, 206–207, 212 Cayne, James, 20, 36–37 at Bank One, 108–109, 119 CDOs. See Collateralized debt at Commercial Credit, 63–64 obligations (CDOs) at JPMorgan Chase, 179–180 CDO-squareds, 191 at Salomon Smith Barney, 88

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CoVaR, 201 commitment to fortress balance Cox, Christopher, 37, 202 sheet, 159 Credit bubble, 195 communication style, 14–15 Credit crisis, 5, 15–18, 26, 160. See concern about loan delinquencies, also Financial crisis of 161 2007–2008 confl icts with Jessica Bibliowicz, Credit default swaps, 18, 81–83 191–192, 202 conservatism, 19 Credit risk, 120 corporate values, 212 Crown, James, 19, 23, early career, 49–69 106, 107, 114 family story, 53–54 as Bank One board member, 108, feelings about acquisition of 123, 124–125, 126, 142 WaMu, 178 and Bear Stearns deal, 35, 44 fi red from Citigroup, 49–50, 72, helps recruit Dimon to Bank One, 83, 89–90 98–100 fi rst letter to Bank One as JPMorgan Chase director, 172, shareholders, 128–129 174, 177 infl uence of Warren Buffett, Cultural shifts, 123, 205–206 168–170 Customer service, 127–128 interview on Charlie Rose show, 37, 160, 214 Delves, Donald P., 205–206 intolerance of waste, 146 Demon of Our Own Design joins board of Yum! Brands, (Bookstaber), 87, 190 93–94 Department of Health and Human at JPMorgan Chase, 136–139, Services, U.S., 214 142–146, 146–150 Derivatives, 18 JPMorgan Chase annual report, Dimon, Jamie: http://www.pbookshop.com2007, 150 awards and honors, 8, 131 and leadership, 211–212 at Bank One, 10, 103–107, and loyalty, 22, 80, 213, 217–218 119–128 management style, 7, 8–9, 13, begins working for Weill, 56–57 144–145, 147, 150, 163–164, belief in preparedness, 6, 161–162 204, 206, 209 belief in public service, 213–215 new product development, blames banks for mortgage 199–200 problems, 198 personality, 14–15, 101 at Citigroup, 72 personal side, 215–217 clashes with Greenhill, 79–80 at Primerica, 71–72, 77 at Commercial Credit Company, priorities, 212 60–65 recruited by Bank One, 99–101

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Dimon, Jamie (Continued) regulation, 201–203 regroups after Citigroup ﬁ ring, transparency and surveillance, 202 92–95 Financial Services Roundtable, relationship with Harrison, 141 The, 202–203 relationship with Weill, 68, 73, 94 First Chicago NBD, 96–97 restructuring plan for Bank One, First USA credit card, 97–98 117–119 Fortress balance sheet, 120, 129–130, returns to Wall Street, 133–152 131, 155–170 and risk management, 19, 152, 163 Freddie Mac, 26, 182 at Salomon Smith Barney, 84–85 Fredericks, J. Richard, 158 at Smith Barney, 80 speaks to shareholders about Bear Geithner, Timothy, 31, 32, Stearns, 29–30 34, 38, 210 thoughts on credit crisis, Glass-Steagall Act of 1933, 15–18, 185 86–87, 137 Wall Street career, 74–90 Goldman Sachs, 26, 169, 183 Dodd, Christopher, 31, 32 Goldschneider, Sandra, 174 Dorsey, Patrick, 131–132 Golub, Harvey, 75 Drexel Burnham Lambert, 74 Gramm-Leach-Bliley bill, 86 Greenberg, Alan “Ace,” 37 Ely, Bert, 173 Greenhill, Robert F., 78, 79–80 Enron, 138–139 Greenspan, Alan, 189, 193

Failures, ﬁ nancial institutions, Hall, John, 13, 95, 97, 98–99, 101, 182–186 108, 115 Family, 212 Harrison, William Jr., 134, 135, 139, Fannie Mae, 26, 182 140, 141, 147, 151–152, 157 Financial crisis of 2007–2008,http://www.pbookshop.com Harvard Business School, 54–55 4–5, 160, 189–207. See also Hayden Stone, 58 Credit crisis Home equity borrowing, 17, 168 causes and contributing factors, House of Morgan (Chernow), 137 191–192 Housing bubble, 192, 193 Financial industry, 198 Housing prices, 17, 191, 194–195 compensation, 205–206 interconnectedness of market, Incentives and rewards, 205 200–201 Information sharing, 19 leadership, 203–207 Information technology systems, new product development, 120–122 199–200 Innovation, 190, 200

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Interest-only loans, 197 projections about the future after Investment banking, 33 WaMu acquisition, 180–182 Investment models, 193–195 share value in November 2008, 6 Investments, bank, 184–186 and SIVs, 16 Istock, Verne G., 95, 98, 99, 102–103, subprime mortgages, 148, 149 113–114 succession plan, 140–141 Tier 1 capital ratio, 13, 178 James, Thomas A., 187–188, and UBS Commodities Canada 197–198, 199 Ltd., 187 John A. Levin & Company, 82 underwriting criteria, 20 J.P. Morgan & Company, 136–137, JPMorgan Investment Bank, 34 138. See also JPMorgan Chase JPMorgan Chase, 92. See also Kent, Judy, 55–56 J.P. Morgan & Company Khurana, Rakesh, 103 acquires Bear Stearns, 4, 5, 25–45 Killington, Kerry, 175 acquires WaMu, 5, 172, 176, 178 King, William, 149 agrees to $10/share Bear Stearns Kiss, Elinda Fishman, 162, 202 purchase price, 27, 40 Kovacevich, Richard, 202 annual reports, 144, 150 and Bank One, 10, 132, 134 Langley, Monica, 73 business principles, 152 Leadership, 203–207, 209–218 and collateralized debt obligations Lehman Brothers, 26, 149, 160, 183 (CDOs), 17 Lewis, Joseph, 40 corporate culture, 179–180 Lewis, Ken, 182 creation of, 138 Lipp, Robert “Bob,” 18, 145, 152, and Dimon, 136–139, 142–146 161, 211, 215, 216 drive to eliminate unnecessary becomes CEO of Travelers spending, 145http://www.pbookshop.cominsurance division, 77 employee compensation, 145 at Commercial Credit, 62, 63–64 and Enron, 138 Dimon’s personality, 15 history, 7 early days of JPMorgan Chase integration of mortgage business, merger with Bank One, 143 147–150 at Primerica, 72, 75 leadership, 9 relationship between Dimon and management, 115, 163 Weill, 68 named one of “The World’s Most and risk management, 42 Inﬂ uential Companies,” 156 Liquidity bubble, 195 problems with combining with Loan loss reserves, 166, 170 Bank One, 139–142 Loan-to-value ratios, 198

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Long-Term Capital Management No-load funds, 81 (LTCM), 159–160 Nomura, 183 Loyalty, 22, 80, 213, 217–218 Nontraditional ﬁ nancing, 197 Novak, David: Mandelbaum, Jay, 114 as Bank One director, 112, 140, MarketWatch, 173–174 142 Marshall, Paul, 7, 97, 118–119 and Bear Stearns deal, 44 Maughan, Deryck C., 84–85, 90 on Jamie Dimon, 161, 213, 217 McCoy, John B., 95, 96, 98 as JPMorgan Chase director, 6, 158 McCoy, John G., 96 as Yum! Brands CEO, 94 Meritocracy, 122–124 Merrill Lynch, 17, 26, 27, 149, Originate-and-distribute model, 194 150, 182 Milken, Michael, 74 Parr, Gary, 34 Miller, Heidi, 114, 115 Paulson, Henry “Hank” Jr., 5, 31, 32, Money, Greed, and Risk 34, 38, 184, 185 (Morris), 200 Pearson, Andrall “Andy,” 93, 217 Monolines, 168 PNC Financial Services Group, 185 Morgan, J. Pierpont, 11, 186 Preferred securities, 5, 184 Morgan Stanley, 26, 183 Prime brokerage, 33 Morningstar, Inc., 131 Primerica, 10, 54, 61 Morris, Charles R., 200 acquired by Commercial Credit, Mortgage real estate investment 65–69 trusts (REITs), 168 buys BarclaysAmerican Mortgages: Corporation, 74 innovations, 196–199 changes name to Travelers, 77 integrating into JPMorgan Chase Dimon becomes president, 71–72 business, 147–150http://www.pbookshop.commerges with Travelers, 77 originate-and-distribute Primerica Financial Services, 67 model, 194 Prince, Charles O. III “Chuck,” 31, subprime, 16, 17, 148–149, 150, 76, 150, 169, 191 191, 198 Proﬁ tability, Bank One, 130–132 Public service, 213–215 National Center on Addiction and Substance Abuse (CASA), 213 Recession, 42, 112, 181–182 National City Corporation, 185 Reconstruction Financial Negative amortizing Corporation (RFC), 184 mortgages, 197 Redmond, Andrea, 22, 99, 102, New product development, 199–200 103, 215

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Reed, John S., 86 Spector, Warren J., 36 Regulation, 198, 201–203 Stein, Rob, 179 REITs, 168 Stock market, 3, 6 Reserves, loan loss, 166, 170 Stress testing assets, 165–166, 196 Rewards and incentives, 205 Structured investment vehicles (SIVs), Risk management, 19, 20, 163, 16, 151, 168, 191 167–168, 196, 201, 205–206 Subprime mortgages, 16, 17, at Bank One, 120 148–149, 150, 191, 198 Bear Stearns, 41–42 Succession plan, JPMorgan Chase, Dimon’s emphasis on, 152 140–141 Salomon Smith Barney, 87 Sullivan, Martin, 159 Risk models, 193–195, 196 Swaps, credit default, 191–192, 202 Robinson, James III, 58, 74, 75 Sylla, Richard, 11, 184 Russell Reynolds, 94 Tearing Down the Walls Salomon Brothers, 10, 61, 83–85 (Langley), 73 Salomon Smith Barney, 72, 84–85, Terry, Tom, 163 87, 88, 90 Thain, John, 182 Scharf, Charlie, 12, 114, 115, Tier 1 capital, 13, 19, 129, 131, 161, 177, 181 166, 170, 178 Schorr, Glenn, 33 Trainer, David, 162, 167, 169, Schroeder, Kathy, 104, 113, 119 188, 205 Schwartz, Alan, 32, 34, 36, 40 Transparency, 20–22, 202 Second Curve Capital, 29 Travelers, 10, 81, 84, 85–89 Securities, preferred, 5, 184 Travelers Insurance, 61, 75 Securitization, 191, 194–195 Tribbett, Charles A. III, 102 Shearson Hayden Stone, 58 Tsai, Gerald, 65 Shearson Loeb Rhoades,http://www.pbookshop.com 58 Simmons, Hardwick “Wick,” 56, 57, UBS Commodities Canada 161, 204 Ltd., 187 SIVs. See Structured investment Underwriting, 20, 198 vehicles (SIVs) Smith Barney, 10, 61, 65, 66, 67, 68 Value at risk (VaR), 201 acquires Salomon Brothers, Value creation, 166–167 83–85 Vauban Model, 165 Dimon named chairman and Volland, Robert, 59–60 CEO, 80 inﬁ ghting, 78–79 Wachovia Corporation, 158, 183 Smith Barney Shearson, 77–79 Wall Street bailout, 184

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Washington Mutual (WaMU), 23, fi res Dimon, 49–50, 72, 90 157, 171–188 hires Dimon, 56–57 becomes largest bank failure in merges Citicorp with Travelers, history, 171 85–89 benefi ts of acquiring, 12 relationship with Dimon, 55–56, loan markdowns, 181 68, 73, 94 purchased by JPMorgan Chase, 5 Weinberg, John, 189 run on bank, 176 Welch, Jack, 75 specializations create problems, 175 Wells Fargo, 5, 158, 183 Wasserstein, Bruce, 207 Winters, Bill, 34, 148, 151 Waste cutting, 125–126, 146 Weatherstone, Dennis, 207 Yum! Brands, 93–94, 112, 217 Weill, Sanford “Sandy,” 10, 19, 31 becomes president of American Zarb, Frank, 19, 51, 54, 76 Express, 58–59 and Bear Stearns deal, 42 development of career, 58–60 and leadership, 204 and fi nancial industry regulations, 203 and Primerica, 66–67, 72, 77

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