JAMIE DIMON WANTS R-E-S-P-E-C-T JPMorgan Chase’s CEO thinks of himself as a cut above the average banker. But critics say he has more in common with his peers than he would like to admit. REUTERS/LUCAS JACKSON BY ELINOR COMLAY AND bankers as greedy evil-doers. leaders, Dimon was invited to a private Oval MATTHEW GOLDsteIN It was at least the 12th time since the Office one-on-one with the president to NEW YORK, FEB 4 start of the financial crisis that Dimon discuss the economy. Dimon and his wife has complained about Wall Street critics Judy were also guests at the state dinner HAT’S EATING JAMIE DIMON? painting all bankers as cut from the same the White House arranged for Chinese At last week’s World Economic cloth. But the timing of his latest outburst President Hu Jintao last month. And one ForumW in Davos, Switzerland, the JPMorgan seemed odd. of Dimon’s top executives, Bill Daley, was Chase chief executive once again lambasted In December, as part of President Barack tapped by the president as chief of staff. the media and politicians for portraying all Obama’s bid to make nice with U.S. business By most objective standards that’s a lot of FEBRUARY 2011 JAMIE DIMON FebruARY 2011 love Obama has showered on Dimon, even though JPMorgan spent more money than Dimon’s tumultuous reign any other Wall Street firm to lobby against key parts of last year’s financial regulatory Shares of JPMorgan have gone on a rollercoaster ride in the five years since Jaime Dimon became chief executive officer of the bank. But in the end, shares are selling for roughly reform law. the same price they were on the day Dimon took over. If Dimon seems unusually thin-skinned, Stock price - $ 60 many industry insiders say, it is an indication Oct 17: JPMorgan takes $1.3 bln May 16: Dimon gives Syracuse of the importance the 54-year-old Queens, write-down on leveraged loans commencement address in spite of student protests New York native places on his legacy -- and 50 how that will affect his ability to forge a life beyond finance. Dimon has worked hard over the years 40 to sell investors and analysts on the notion that JPMorgan doesn’t play by the same set March 16: JPMorgan Dec 8: Dimon and says it will buy Bear President Obama of brass-knuckled rules as Goldman Sachs 30 Stearns for $2 a share hold private chat Group, Citigroup or even Bear Stearns -- in Oval Office which Dimon acquired with a healthy dollop Jan 1: Dimon Sept 25: JPMorgan becomes CEO buys WaMu assets of taxpayer help in the early days of the crisis. 20 Jan 6: Obama names He also likes to portray himself as a regular JPMorgan executive 28/01/ Feb 3: Dimon criticizes politicians for William Daley as guy, who just happens to run a banking blaming all bankers for economic woes chief of staff 11 10 colossus. 2006 2007 2008 2009 2010 2011 But there’s another side to the popular Source: Thomson Reuters narrative about Dimon the Good and how Reuters graphic/Van Tsui he outperformed his peers by steering clear out from the shadow of his former mentor of things like subprime-backed mortgage “Five yeARS AGO IF Sandy Weill, the architect of Citigroup and securities. In reality, the main reason the so-called supermarket bank. As the JPMorgan didn’t load up on subprime debt WE’d been sitting self-styled heir to John Pierpont Morgan’s as much as other banks was because it was HERE, WE’d haVE BEEN legacy, Dimon rescued Bear Stearns from slow to enter the market, critics say. bankruptcy and, along with the Federal Critics point out that JPMorgan, even if it GOING, “WE HAVE Reserve, emerged as one of the lenders of wasn’t a leader in churning out collateralized THE BEST MORTGAGE last resort during the later stages of the crisis. debt obligations, provided some of the In fact, Federal Reserve Chairman Ben building blocks for these toxic securities MARKET IN THE Bernanke came to believe that JPMorgan was through all the home loans and second WORLD.” the only one of 13 large financial institutions mortgages it sold. that was not at risk of failure in the fall of And despite his good-guy image, Dimon 2008, the Wall Street Journal wrote last is just as aggressive as any banker when it SIX-PACK JAMIE week. comes to looking for ways to generate fees FOR HIS PART, he says the media has made At times Dimon speaks as if he is running from credit cards and other staple consumer too much of a falling out with the Obama JPMorgan, where shares have risen just 14 banking products. administration. “I don’t have hurt feelings,” percent since he became CEO in January Indeed, JPMorgan under Dimon tried to he said during an hourlong interview late last 2006, for the betterment of the country and make the most of its long relationship with year in his office at JPMorgan’s ParkA venue not just the interest of the second-largest convicted Ponzi king Bernard Madoff. headquarters. “Whether they take my U.S. bank’s shareholders. In a lawsuit unsealed on Thursday, the counsel, that’s up to them. I never stopped “I’m not as worried about JPMorgan as I am Madoff trustee alleges that the bank began talking to them.” about our industry and our country,” he told drawing up plans in 2006 to sell structured Yet try as he might to appear nonchalant Reuters. notes tied to the returns of the many so- about it, people who know Dimon say he called feeder funds that funneled money to cares deeply about what the political class MORTGAGE REFORM Madoff. The trustee, Irving Picard, said that thinks. They say he prides himself on having ONE WAY DIMON IS trying to put his country JPMorgan went ahead with its structured the ear of those in power. before his bank is by seeking to take the lead note sales despite red flags -- because People close to him say the criticism is among his peers in calling for major reform of the “potential upside reward for investing especially painful because he sees himself the U.S. mortgage market. Recently, he has through Madoff was simply too good to pass as a financier/statesman along the lines of a taken to calling the U.S. mortgage situation up even if there was a fraud.” Warren Buffett or Henry Paulson. If not quite a “mess” and in need of a top-to-bottom In some ways what bugs Dimon when doing God’s work, what Dimon is doing, at overhaul. he gets tarred with the label of being just least in his mind, is the next best thing. He is “Five years ago if we’d been sitting here, another banker is that it invites critics to take a corporate executive who plays on the world we’d have been going, ‘We have the best a fresh look at his stewardship -- not just of stage and at the highest political level. mortgage market in the world,’” he told JPMorgan but of Bank One before it. The financial crisis allowed Dimon to step Reuters. “We should have standard national 2 JAMIE DIMON FebruARY 2011 laws. We don’t. We should have standard foreclosure laws. We don’t. Standard servicing clauses. We don’t.” That’s unusually frank talk for a banker. It’s the kind of thing that has helped forge a bond between Dimon -- a registered Democrat -- and some of the more skilled politicians of his time. Among his confidants are former President Bill Clinton and former British prime minister Tony Blair -- two world leaders famous for their everyman approach to politics. Blair, who for the past three years has worked for JPMorgan as a special adviser and recently traveled with Dimon on a trip to Africa, said in an interview that one thing he admires about Dimon is his straight talk and openness to honest disagreement. “He’s somebody who’s direct,” said Blair. “He’s not somebody who’ll sit in a meeting when someone says something he disagrees with quietly. He’ll get up, he’ll stand up and speak.” That image of a no-nonsense executive who doesn’t put on airs can be seen in the REGULAR GUY: Jamie Dimon, CEO and chairman of JPMorgan Chase & Co, poses for a portrait in his office in NewY ork low-key way Dimon has decorated his corner December 22, 2010. REUTERS/LUCAS JACKSON office, which boasts a panoramic view of the East Side of Manhattan. In keeping with his regular guy image, one of the items on his JPMorgan Chaserocks Capitol’s HELOC Hill hot potato desk is a mug made by one of his now adult TheBy a bank wide ismargin, second JPMorgan to Bank of outspent America other in exposure U.S. banks to home on lobbying equity loans last year and. otherThe bank so-called’s daughters many years ago. On his bookshelf, secondlobbying liens. effort And in W almostashington a fifth coincided of those with home the equity passage loans of werethe financial written byregulatory Washington reform Mutual, law. perched next to a copy of “Security Analysis,” which JPMorgan acquired at the end of 2008. the legendary treatise on value investing LobbyingExposure spending, to residential $ - million loans at end of fourth quarter 2010 written by Benjamin Graham and David Dodd, is a copy of John Grisham’s thriller JPMorganHome Chase equity “The Broker.” But not everyone is sold on Dimon’s Loans acquired from Citigroup Washington Mutual carefully crafted regular guy image.