In the aftermath of JPMorgan’s $5.8 billion trading loss this spring, the firm’s outspoken chief executive seemed to dial back the brashness factor a little bit, and whether you thought that was a happy thing, because the guy was a little too cocky for someone who took $25 billion in bailout funds during the diciest moments of the financial crisis, or else a sad thing, because itwas always fun to listen to him get in front of a speaker phone and say things no one else had confidence or track record to speak aloud, it was subjectively an observable thing nonetheless.
Well, we’re not sure we want to go so far as to say that the old Jamie Dimon is back, but we thought the JPMorgan CEO spoke a little more boldly today at an appearance today at the Council on Foreign Relations. And whether it was because getting sued last week over mortgage-packaging practices of Bear Stearns, which Mr. Dimon’s firm acquired at a discounted price in 2008, got the CEO’s fighting spirit up, or that he feels he’s eaten enough crow over the London Whale fiasco, or neither—today’s talk left us thinking we’re in store for a dose of Real Talk with Jamie when JPMorgan hosts a conference call to discuss third-quarter earnings on Friday.
Some highlights:On the Bear Stearns acquisition: “Let’s get this one exactly right. We were asked to do it. We did it at great risk to ourselves … Would I have done Bear Stearns again knowing what I know today? It’s real close.” And: “I’m going to say we’ve lost $5 billion to $10 billion on various things related to Bear Stearns now. And yes, I put it in the unfair category.” And: I think the government should think twice before they punish business every single time things go wrong.”
On the London Whale: “We made a stupid error. I mean, we’re pretty disciplined risk people. But we made an error. We had a gap in the line. And, you know, we didn’t have this gap elsewhere. We have other flaws elsewhere, but, you know, we had a gap. We screwed up. By the way, that quarter, we made $5 billion. So yeah, it was a stupid error. … I should have caught it also. I didn’t. But it isn’t going to sink our ship.”
On the European debt crisis: “From an economic standpoint, Greece is not the issue. Greece is a couple of billion of dollars in debt. …The catastrophe is the default of Greece before you have a firewall to Italy and Spain, you’ll have a very good likelihood of a run on the banks in Italy and Spain. Italy and Spain don’t have the wherewithal to stop a run on the banks.”
On the fiscal cliff: “We have formed now a fiscal cliff war room, command center, all that kind of stuff going through to make sure we understand it all. We’ll be prepared. JP Morgan will survive the fiscal cliff. I just think it’s terrible policy to allow it to get close. …There are all these potential outcomes and I would defy anyone to know what they are.”
On America: “The president, whoever he is next year, recognizes one thing for certain, they’re going into that office with a royal straight flush. I think this attitude, somehow, ‘how woe is me, how terrible, how America is lost. It’s just not true, folks. …This is still the best economy in the world. If you can invest in one place in this planet, it would be here.”