Photo: Lisa Du, Business Insider
Vanity Fair editor Graydon Carter is known for his grey locks, quick wit, and fashion sense. He is not known for his knowledge of finance.And in his July issue Editor’s Letter he admits that (“when it comes to finance I am, at best, hopeless,” he writes), but Carter still takes the time to say a few words about Jamie Dimon and JP Morgan’s horrific trading loss made public last month.
The words are, as is to be expected of Carter, quite sharp. In fact, they cut deep (from Vanity Fair).
When JPMorgan Chase announced earlier this spring that the firm had lost $2 billion in high-risk trading, C.E.O. Jamie Dimon said that the trades had been in violation of “the Dimon Principle.” He didn’t explain what this was—no doubt expecting the rest of us to know, much as we are aware of Newton’s law of gravity. I have a general rule when companies admit to a loss. Perhaps I will call it the Carter Rule: no matter how big a loss a company is willing to cop to, to get to the absolute truth you should probably double the figure and, just to be safe, double it again… The pedestal that he (Dimon) so carefully constructed for himself is now vacant.
Brutal. But it gets worse when Carter brings up Jamie Dimon’s ongoing campaign to get people to stop bashing bankers and let go of financial regulation. Carter remembers a lot. Probably because this isn’t first time he’s taken Dimon to task, he did it after the 2008 meltdown as well.
Back then, says Carter, Dimon called him up personally, calmly (and as Carter tells it, condescendingly) to explain the functions of a bank. Apparently, Carter didn’t quite pick up what Dimon was putting down.
I’m so out of sync with the times that I believe that if you want to gamble with your own money—with no safety net for your losses (like a gambler, for instance)—that’s fine. But if you’re going to gamble with other people’s money—such as the government-insured deposits held by banks—then that’s not so fine. Financial institutions like to call what they do trading. Let’s be honest. It’s not trading; it’s betting.
We wonder if Dimon will call Carter to continue their finance lessons after this thrashing. Perhaps, though, the CEO may be more convincing in person. Carter has said he thinks he’s pretty attractive, after all.
“Jamie Dimon is tall. He’s fit. For a banker, he’s nice-looking. And he’s got that head of fluffy white, unbankerish hair. You could argue that Dimon’s single greatest asset is that he doesn’t look like Dick Fuld.”
Nevermind, that wasn’t a compliment. It was a backhanded burn.