Jamie’s Crying
by digby
At last week’s World Economic Forum in Davos, Switzerland, the JPMorgan Chase chief executive once again lambasted the media and politicians for portraying all bankers as greedy evil-doers.It was at least the 12th time since the start of the financial crisis that Dimon has complained about Wall Street critics painting all bankers as cut from the same cloth. But the timing of his latest outburst seemed odd.In December, as part of President Barack Obama’s bid to make nice with U.S. business leaders, Dimon was invited to a private Oval Office one-on-one with the president to discuss the economy. Dimon and his wife Judy were also guests at the state dinner the White House arranged for Chinese President Hu Jintao last month. And one of Dimon’s top executives, Bill Daley, was tapped by the president as chief of staff.By most objective standards that’s a lot of love Obama has showered on Dimon, even though JPMorgan spent more money than any other Wall Street firm to lobby against key parts of last year’s financial regulatory reform law.If Dimon seems unusually thin-skinned, many industry insiders say, it is an indication of the importance the 54-year-old Queens, New York native places on his legacy — and how that will affect his ability to forge a life beyond finance.Dimon has worked hard over the years to sell investors and analysts on the notion that JPMorgan doesn’t play by the same set of brass-knuckled rules as Goldman Sachs Group, Citigroup or even Bear Stearns — which Dimon acquired with a healthy dollop of taxpayer help in the early days of the crisis.He also likes to portray himself as a regular guy, who just happens to run a banking colossus.But there’s another side to the popular narrative about Dimon the Good and how he outperformed his peers by steering clear of things like subprime-backed mortgage securities. In reality, the main reason JPMorgan didn’t load up on subprime debt as much as other banks was because it was slow to enter the market, critics say.Critics point out that JPMorgan, even if it wasn’t a leader in churning out collateralized debt obligations, provided some of the building blocks for these toxic securities through all the home loans and second mortgages it sold.And despite his good-guy image, Dimon is just as aggressive as any banker when it comes to looking for ways to generate fees from credit cards and other staple consumer banking products.Indeed, JPMorgan under Dimon tried to make the most of its long relationship with convicted Ponzi king Bernard Madoff.In a lawsuit unsealed on Thursday, the Madoff trustee alleges that the bank began drawing up plans in 2006 to sell structured notes tied to the returns of the many so-called feeder funds that funneled money to Madoff. The trustee, Irving Picard, said that JPMorgan went ahead with its structured note sales despite red flags — because the “potential upside reward for investing through Madoff was simply too good to pass up even if there was a fraud.”In some ways what bugs Dimon when he gets tarred with the label of being just another banker is that it invites critics to take a fresh look at his stewardship — not just of JPMorgan but of Bank One before it.For his part, he says the media has made too much of a falling out with the Obama administration. “I don’t have hurt feelings,” he said during an hour-long interview late last year in his office at JPMorgan’s Park Avenue headquarters. “Whether they take my counsel, that’s up to them. I never stopped talking to them.”Yet try as he might to appear nonchalant about it, people who know Dimon say he cares deeply about what the political class thinks. They say he prides himself on having the ear of those in power.People close to him say the criticism is especially painful because he sees himself as a financier/statesman along the lines of a Warren Buffett or Henry Paulson. If not quite doing God’s work, what Dimon is doing, at least in his mind, is the next best thing. He is a corporate executive who plays on the world stage and at the highest political level.The financial crisis allowed Dimon to step out from the shadow of his former mentor Sandy Weill, the architect of Citigroup and the so-called supermarket bank. As the self-styled heir to John Pierpont Morgan’s legacy, Dimon rescued Bear Stearns from bankruptcy and, along with the Federal Reserve, emerged as one of the lenders of last resort during the later stages of the crisis.In fact, Federal Reserve Chairman Ben Bernanke came to believe that JPMorgan was the only one of 13 large financial institutions that was not at risk of failure in the fall of 2008, the Wall Street Journal wrote last week.At times Dimon speaks as if he is running JPMorgan, where shares have risen just 14 percent since he became CEO in January 2006, for the betterment of the country and not just the interest of the second-largest U.S. bank’s shareholders.”I’m not as worried about JPMorgan as I am about our industry and our country,” he told Reuters.
Read on if you can stomach it.
I suppose we should be grateful he didn’t say that he’s doing God’s work, but it’s pretty clear he thinks he is. What with its adolescent Randian worship of rich men in suits, I suppose this is the natural consequence of the right’s domination over the past few years. But it’s still a little bit surprising to find out just what whining little twits these Masters of the Universe really are.And the fact that Jamie’s just turning his late entry into the sub-prime market lemon into lemonade is just precious. They don’t miss a trick.
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