Photo: AP Photo
Yesterday, Wall Street was rocked by the news that industry powerhouse JP Morgan faces a $2 billion loss in its Chief Investment Office.Perhaps you think that after the financial crisis of 2008 we should be used to seeing massive bank losses, but with JP Morgan that’s not so. The bank was known for being the most responsible institution on the Street, and the man at its helm, CEO Jamie Dimon, was recognised as a man who simply didn’t lose.
Now all of that has been thrown into question. Regulators will pounce on this loss to argue for more regulation, and Dimon’s vocal opposition to more rules will be fodder for critics from New York to Washington.
That said, we recognise that this is a dark spot in Dimon’s otherwise illustrious career and life, so we’ve put it together for you. It’s quite impressive.
Once you see where he’s been, perhaps you’ll have no doubt that Dimon will be back on top soon enough — it just may take some time.
*Some text and photos by Katya Wachtel
Dimon, a twin, was born with finance in his blood and grew up on Long Island in a modest family home
In 1956, Mrs. Themis Dimon gave birth to twin boys Jamie and Ted Jr. They already had an older brother.
Dimon's dad was a stockbroker. And his grandfather, a Greek immigrant, also worked in finance.
Source: Last Man Standing
The modest life didn't last long: the family moved from Queens to the Upper East Side on Park Avenue
Once he arrived on the Upper East Side, the athlete and ladies' man attended Browning: a private, all boys high school
At Browning Dimon played varsity soccer, basketball and baseball. Apparently his nickname was 'Mad Dog.' Amazing.
Dimon was also a bit of a ladies' man. 'In senior year, he majored in his girlfriend,' a pal said.
Souce: Last Man Standing
He was rejected by Brown but scored a place at Tufts, where he wrote a thesis that got him in the door with Sandy Weill
Dimon graduated summa cum laude from Tufts with majors in psychology and economics.
He used a thesis he wrote about a business deal involving his father and Citigroup CEO Sandy Weill (who knew Dimon's family socially) to land a summer gig at Weill's Hayden Stone. Weill then became Dimon's mentor.
Source: Last Man Standing.
Dimon was in the same MBA class as GE's Jeff Immelt, plus hedge fund managers Seth Klarman and Steven Mandel, and another special person: his future wife, Judy.
Immelt once said: 'Judy was by far the best-looking, sexiest, and smartest girl in the class, and Jamie got to her first.' They now have three beautiful daughters together.
He graduated as a Baker Scholar -- which is the top academic honour at Harvard Business School, given only to the top 5% of the graduating MBA class.
Source: Last Man Standing
Dimon was so in-demand after Harvard he turned down offers from Goldman Sachs and Lehman Brothers. He landed at American Express.
Why did Weill fire Dimon? rumours were that the straw that broke the camel's back was tension with Weill's daughter, who worked for the company.
Dimon was made CEO of Bank One two years later, and doubled the value of the company within four years.
Fortune called him 'The Toughest Guy On Wall Street.'
Source: NY Mag
Jamie and his family lived in a beautiful multi-million dollar mansion in Chicago when he was in charge of Bank One
Dimon then convinced JP Morgan's CEO to buy Bank One, and one year after the merger, Dimon became CEO of JP Morgan
When JP Morgan bought Bank One for $58 billion, Dimon was made President and COO.
He became CEO one year later, and it was back to NYC.
He steered JP Morgan through the financial crisis with serious cool, picking up two banks along the way
With less dodgy mortgage-related products on its books than the other banks on Wall Street, under Dimon, JP Morgan emerged from the crisis better than any other bank.
Dimon picked up Bear Stearns for $260 million in a firesale -- called 'the best deal ever' as Bear was once worth $11.7 billion. Plus, JP Morgan acquired WaMu for $1.9 billion, making it the country's biggest bank.
In the wake of the crisis, Dimon became Obama's banker BFF for a while, sending him to national prominence and now his name is mentioned as possible treasury secretary
Graydon Carter, Vanity Fair's CEO, put it like so: 'JPMorgan Chase C.E.O. 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.'
Dimon's bank recorded a solid 'beat' in Q2 '11, with revenue of $26.7 billion, ahead of estimates of $24.91 billion.
Meanwhile, competitors like Bank of America and Goldman Sachs, are flailing. BofA beat earnings but the stock has been tanking on mortgage-related issues, and Goldman totally missed estimates last quarter.
Dimon's love affair with Obama ended as the country's ire against banks turned into regulation calling for Wall Street banks to raise more capital and split up their prop trading desks.
Here's what he said about it in his annual letter to share holders this year:
As a result of Dodd-Frank, we now have multiple regulatory agencies with overlapping rules and oversight responsibilities. Although the FSOC was created, it is proving to be too weak to effectively manage the overlap and complexity. We have hundreds of rules, many of which are uncoordinated and inconsistent with each other. While legislation obviously is political, we now have allowed regulation to become politicized, which we believe will likely lead to some bad outcomes.
And to many still angry with Wall Street banks (like Occupy Wall Street protesters), Dimon was a symbol of bank excess.
Protesters demonstrated against Dimon directly on two occasions. Once in Seattle while he was giving a speech for the University of Washington, and again in front of his house in NYC.
Then suddenly, yesterday, the news broke that JP Morgan's Chief Investment Office faced a $2 billion loss.
A month before this announcement there had been reports that a trader known 'the London whale' had a massive CDS book.
And that showed up in JP Morgan's 10Q, which came out yesterday after the market closed. Jamie Dimon held a surprise conference call after its release to explain that the bank had tried a new hedging strategy to cover synthetic derivatives, but it had backfired.
'The original premise of the synethic credit exposure was to hedge the company in a stress credit environment. That was the original proposition for the portfolio.'
'It could easily get worse this quarter,' Dimon says. It is likely they'll be volatile for the next 2 quarters.