Paradise Lost
by digby
The Financial Times details Jamie Dimon’s troubles. He’s quite a guy:
For Mr Dimon himself the losses have posed a question of his credibility – fuelled in part by his initial handling of the affair. On April 13 he bluntly dismissed news reports about the big trading positions held by the CIO as “a complete tempest in a teapot”. Less than four weeks later, he was forced to reveal that the unit’s “terrible, stupid, egregious” errors had caused $2bn losses.
This jars with his image as the self-assured, charming and, at times, disarmingly frank Wall Street veteran who had successfully steered JPMorgan through the crisis, avoiding the losses that had crippled his rivals.
For some in Washington, though, his star had already dimmed. “The Jamie I first met was not the arrogant Jamie that he has become,” says a senior congressional aide. Mr Dimon, he says, “morphed into some combination of Goldman Sachs and Ken Lewis” – the former chief executive of Bank of America – “gratuitously full of himself, unnecessarily angry”.
Oh, that sounds terrible. Perhaps we should hear from some of his nobles … er, employees:
However, in a series of interviews of top executives, a handful of whom are likely successors when Mr Dimon does step down, there is unwavering hostility towards the idea that these losses could force his departure. “Ludicrous,” says one. “Crazy,” says another.
“People will throw rocks at the boat,” says Mike Cavanagh, head of treasury and securities services, who was appointed by Mr Dimon to lead an internal probe into the losses. “It doesn’t change the work we have to do.”[…]
Four executives are adamant Mr Dimon did not deliberately misrepresent the bank’s exposure on a first-quarter earnings call on April 13. “As the guy who signs the books and records of this place for the last six years I know how seriously he takes what we tell the market,” says Mr Cavanagh. “He had senior people saying we’ve got the all clear.”
The executives agree that it was only after the first-quarter earnings, with losses becoming larger and more sustained that it became obvious the CIO’s estimate of the size of the problems was not credible.
“Losses that had occurred had been explained in a variety of ways and those losses continued to mount and they picked up pace,” says one, who adds the company was then justified in waiting until its next big regulatory filing on May 10. “There was no obligation that when losses get to ‘x’ we say something. This wasn’t putting the company in harm’s way.”
Well, that’s a relief. Unfortunately, some malcontents think that no man of such talent could possibly have not been in the know:
Still people close to the bank are surprised that a man with such a grasp of detail could miss the warning signs. A renowned cost-cutter, Mr Dimon recently expressed alarm that fancy potato chips in clear cellophane tied with a ribbon were available in the JPMorgan dining room. His colleague Frank Bisignano launched an investigation, triumphantly reporting back that the chips were cheaper than alternatives bought from local stores.
Mr Dimon still prowls the corridors with a sheet of paper in his pocket – an “owe me” list of people who need to provide a report. “I used to have nightmares that my name would be on the list,” says one former employee.
Others question whether as a charismatic, headstrong leader, he has enough people to stand up to him – particularly after removing rivals such as Bill Winters, co-head of the investment bank, two years ago.
“One of Dimon’s great weaknesses is that he has not created any succession plan – he has kicked out anyone who really might challenge him,” said one person who knows him.
His executives insist they do say “no” to him.
Well, one would have to be very, very sure of oneself, wouldn’t one? After all:
Mr Lee argues that Mr Dimon may seem an outsized presence in a world of lower-key peers, but not compared with historical forebears or contemporaries in other sectors. “Look in our industry at different times: obviously Pierpont Morgan was a big, larger-than-life leader. If you look at other industries, you get your Larry Ellison and Steve Jobs.”
Also too, Jesus.
It’s very hard to sort through all the brown-nosing and back-stabbing in that article, but I suppose that’s the point. Dimon is in trouble. It doesn’t appear that people really believe the person who cares about the cost of the potato chips in the cafeteria was inattentive to the fact that this London Whale was acting like a Casino Whale.
I think the most telling opinion is the one from the congressional staffer who calls him “Jamie.” He says he’s grown arrogant, full of himself and unnecessarily angry. That could describe just about everyone in the business at the moment. The word that’s missing, I’m afraid, is hubris.
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