The tarnished broker
Once hailed as the 'acceptable face of finance' as Wall St took a battering, the mask seems to be slipping as profits dip
THIS week's disappointing third-quarter results from JP Morgan Chase have further tarnished the reputation of the bank's chairman and chief executive Jamie Dimon.
JP Morgan Chase was the one major US bank to emerge from the 2008 financial crisis with its reputation intact.
Its main rival Bank of America was forced into a disastrous takeover of investment bank Merrill Lynch. Another investment bank, Lehman, disappeared altogether; while even mighty Goldman Sachs, memorably dubbed the "great vampire squid" by one writer, found itself becoming the poster boy for all of the excesses of early 21st Century finance.
Only JP Morgan Chase and its boss Jamie Dimon seemed immune from the carnage. The bank's stellar reputation was further enhanced when in June 2009 it repaid the $25bn (€18bn) it had received from the US government a year earlier under the Troubled Assets Relief Program (TARP) ahead of schedule.
So while everyone cheered when Lehman boss Dick Fuld was punched by an enraged former employee, Bank of America boss Ken Lewis was fired and Goldman Sachs chairman Lloyd Blankfein was humiliated by a Congressional committee, Mr Dimon looked all set to become the acceptable face of finance.
His cause was further helped by the fact that, unlike most of his counterparts at other US financial institutions, Mr Dimon is Democrat rather than a Republican, something which initially stood him in good stead with the Obama White House after the new president was inaugurated in January 2009.
Unfortunately there was always something about Mr Dimon that seemed a bit too good to be true. While he has long been lauded in the US business media, whom he courted assiduously down the years, Mr Dimon shares the tunnel vision that seems to be the hallmark of virtually the entire senior management of the American financial sector.
In his 2009 book on the Lehman crisis, 'Too big to fail', for which Mr Dimon was clearly one of the major sources, author Andrew Ross Sorkin paints a picture of a group of hugely well-paid senior executives -- Mr Dimon himself received $55m in 2008 -- who seem completely oblivious to the fact that the crisis had been largely caused by an oversized, out-of-control financial sector.
Mr Dimon's reign as the Obama administration's favourite banker was short-lived. As the new president and his economic team counted the cost of the 2008 debacle and sought to prevent a repetition, they inevitably focused on the need for greater regulation of the sector.
When one considers that several financial institutions, including insurance company AIG, mortgage giants Fannie Mae and Freddie Mac, and Merrill Lynch effectively had to be bailed out by the US government, which pumped a total of €750bn into the financial sector through the TARP mechanism, it would seem hard to argue with the need for greater regulation.
Indeed, JP Morgan Chase itself was one of the beneficiaries of these government-funded bailouts when, in a sweetheart deal brokered and underwritten by the US Treasury, it purchased failed investment bank Bear Stearns in March 2008. Later in 2008 JP Morgan Chase acquired Washington Mutual, the largest savings and loan association in the US, which had been seized by federal regulators in September 2008. The fact that Mr Dimon is a board member of the New York Federal Reserve is a happy coincidence.
Mr Dimon clearly believes no good deed should be forgiven. When the Obama administration moved to tighten up regulation of the US financial sector in the wake of the autumn 2008 crisis, Mr Dimon, his nominal Democratic Party allegiance notwithstanding, was outraged. He lobbied hard to force the administration to water down proposed regulations governing debit cards and financial derivatives.
He has also been openly critical of Federal Reserve chairman Ben Bernanke. At a public forum attended by both men last June, Mr Dimon said that tighter regulation of the US financial sector, particularly higher capital requirements, were hitting economic growth.
More recently he has been on the warpath over the new Basel III international banking rules, which have been agreed by all of the major developed countries. Mr Dimon has criticised these as being "blatantly anti-American" and has called for the US to withdraw from the agreement unless the rules are changed.
Mr Dimon's recent combative stance will have come as little surprise to those who have followed his 30-year banking career. For most of the past three decades he has shown an unerring instinct for conflict and controversy.
A native of New York city, Mr Dimon was born in 1956, the son of wealthy parents of Greek extraction. His grandfather was originally from Smyrna. Now the modern Turkish city of Izmir, it was captured by Turkish forces at the end of the Greco-Turkish war in September 1922. What followed were three days of slaughter and arson during which over 100,000 people, mainly ethnic Greeks, lost their lives and the old city was burnt to the ground.
The surviving inhabitants of Smyrna were forced to flee for their lives and were among the 1.5 million Greeks expelled from Turkey at the end of the war. Many of these so-called Anatolian Greeks, including Mr Dimon's grandfather who became a broker in New York, were possessed of a strong entrepreneurial streak.
The young Jamie Dimon received his early education at Browning School, one of New York's most exclusive private schools.
He then attended Tufts University from which he graduated with a degree in psychology and economics.
From there he trod the well-trodden path to the Harvard Business School from which he received his MBA in 1982. Among those in his MBA class was GE chief executive Jeffrey Immelt.
Even before he graduated from Harvard the young Dimon had been talent-spotted by Goldman Sachs, with whom he had spent a summer internship the previous year.
However, he turned down a job offer and instead went to work with legendary financial dealmaker Sandy Weill, who had known his stockbroker father at American Express.
Two years later, when Mr Weill was forced out after losing a power struggle at American Express, the young Mr Dimon followed his mentor out the door. Over the next 13 years through a series of acquisitions they built Citigroup, in its day the world's largest financial services conglomerate.
Then Mr Dimon passed over Mr Weill's daughter Jessica for a promotion and the two men fell out.
The last straw seems to have been Mr Dimon becoming involved in a physical altercation with Deryck Maughan, the head of Citigroup's international operations, at a company "bonding" session in 1998.
Still you can't keep a good man down. Mr Dimon moved to Chicago and in 2000 was appointed chief executive of Bank One, then the fifth-largest bank in the US.
In 2004 he was appointed chief executive-designate of JP Morgan Chase when it purchased Bank One. Virtually alone of the major money centre banks, JP Morgan Chase emerged from the 2008 financial crisis intact and it was, until this week's third-quarter earnings report, the most profitable bank in the US.
With Mr Dimon now reputedly flirting with the Mitt Romney presidential campaign in the hope of being appointed Treasury Secretary, JP Morgan Chase shareholders must be hoping he will focus on the day job and fix their bank instead.