It seems as if Jamie Dimon’s teflon days are over. Now everyone wants a piece of him.
For a time there, the chairman and CEO of JPMorgan Chase (JPM) could do no wrong. He was the only banking CEO to prepare his firm to withstand the economic storm that broke the backs of a few competitors and hobbled several more. He was hailed as a potential savior of the economic system when his bank acquired Bear Stearns. Hell, he even had a largely admiring biography written about him. (By yours truly.)
These days, not so much. Dimon is appreciated by journalists everywhere for the general lack of a filter when expressing his views. He makes for good copy, we like to say. In Davos, he did not disappoint. His claim during a panel discussion that he was tired of “this constant refrain—bankers, bankers, bankers,” was met with derision. Poor, poor Jamie, wrote the editorialists. He even delivered French President Nicholas Sarkozy an opportunity to make a spirited stand on behalf of sensible financial regulation and against nonsensical banking bonuses.
This week hasn’t brought relief. Late yesterday we learned that the trustee in the Bernie Madoff case has accused JPMorgan Chase of being at the “very center” of the massive fraud. JPMorgan made at least half a billion dollars in fees and profits off the backs of Madoff victims, trustee Irving Picard is arguing, and is responsible for at least $5.4 billion in damages for its role in “allowing the Ponzi scheme to continue unabated for years.”
Whether there’s enough evidence to satisfy a legal definition of complicity is beyond my capability to determine, but there does seem a surfeit of evidence that various people at Chase had suspicions about Madoff long before his fraud broke into public view. Legally culpable? Who knows. Morally? It’s looking a lot like it.
Let’s move on to Simon Johnson. The man has a pedigree as the former chief economist of the International Monetary Fund and co-author of the bestselling book 13 Bankers. But the way the New York Times columnist has been chasing Dimon around these days makes one think he got turned down for a home loan by Chase. He’s called Dimon “the most dangerous man in America” and warned that he is “becoming too big to save.”
Yesterday, he wrote of “the ruinous fiscal impact of big banks.” Give the guy credit for having the right headline writers, but Johnson, like a lot of his rear-view mirror cohort, has been repeatedly making the case that the banks that took on unrestrained risks are the cause of much our current troubles. That’s undoubtedly true. But it’s also quite obvious at this point. Call me crazy, but the absolute certainty of those who would claim to know how to forever prevent another asset bubble from occurring seems as inane as capitalists’ now discredited claim that the market can take care of its own excesses without hurting the rest of us. But Johnson clearly knows a good target when he sees one. Expect more jeremiads against Dimon in the days and weeks ahead.
Reuters took their own shot this morning with a lengthy and quite critical profile of the JPMorgan Chase chief. It seems even his old friends in the media are abandoning him.
I called JPMorgan for comment on the growing onslaught of attacks. Not surprisingly, I couldn’t get anyone official on the horn. “When you’re running a $2 trillion [in assets] company, people will take shots at you every day, legitimate or not,” said the one person I finally chased down. “We’re just going to stay focused on serving our customers and shareholders as best we can.”
Was it inevitable that the tide would eventually turn on Dimon, despite (or perhaps because of) his success at running JPMorgan? It’s happened to pretty much every top banker since J.P. Morgan himself. Now it’s Jamie’s turn. Having paid close attention to the media coverage of Dimon for the past three years, I can say with confidence that the tone is trending in a dramatically different direction than it was even 12 months ago. Is it about to intersect with everybody’s favorite punching bag in finance, Lloyd Blankfein of Goldman Sachs (GS)?
I was at a fairly large dinner party last Saturday night, and found myself sitting next to the wife of a Goldman partner. She later introduced me to her husband, whose ears perked up when I told him I’d written a biography of Dimon. “You know,” he said, “we scratch our heads at Goldman every day about that guy. He can be a much bigger bully in the markets than we are, but everyone still thinks he’s a prince and [Goldman CEO] Lloyd Blankfein is the devil.”
Maybe not so much anymore. Matt Taibbi is surely sharpening his pencil.
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