Jamie Dimon on the Recovery, the Recession Question, and Succession

Jamie Dimon Discusses JPMorganChase's Investment In Detroit
Photo by Mark Wilson/Getty Images
William D. Cohan
July 7, 2021

When Jamie Dimon took over JPMorganChase, in 2005, the place was a disaster. The bank was the Franken-product of one big, poorly integrated merger after another—of Chemical Bank; of Manufacturers Hanover Bank; of Texas Commerce Bank; and then, in January 2001, the combination of Chase Manhattan and JPMorgan & Co., which united the bank of the Rockefeller family with the house of the most feared and revered financier in American history, J.P. Morgan. Dimon entered the fold after JPMorganChase bought Bank One, the Chicago financial institution that he was running after he was famously defenestrated from Citigroup by his onetime mentor, Sandy Weill. Buying Bank One for $58 billion to essentially acqui-hire Dimon was perhaps the smartest move that William Harrison, Dimon’s predecessor, made while running JPMorganChase.

Dimon arrived amid endless internal clashes that pitted the rival banking cultures against each other. JPMorganChase couldn’t decide whether it wanted to be a commercial bank, an investment bank, or a credit-card company. The Chase people didn’t like the JPMorgan people and vice-versa. And it wasn’t only the people who didn’t get along; the computer systems didn’t communicate well either. The rivalries, and in-fighting, were legendary. I should know. I was there—at Chase, then JPMorgan, then JPMorganChase—for seven years before my homeboys, Doug Braunstein, Rob Kindler, and Julie Richardson defenestrated me in January 2004, before Dimon’s arrival. (As I’ve noted whenever I’ve written about the bank over the last 17 years, I brought—and lost—an arbitration claim against the bank after I was terminated. I also settled litigation with the bank years later over a disputed investment.)

Anyway, the point is that Dimon fixed all that infighting, and more. He made JPMorganChase a “one-bank bank.” Somehow, he got the children to play nicely together in the same sandbox. Sixteen years later, JPMorganChase’s market value, at some $465 billion, is the biggest of any Wall Street bank, and the stock price has nearly quadrupled during his tenure. Dimon was among the highest compensated banking C.E.O.s on Wall Street in 2020, earning $31.6 million. The 9.4 million shares of JPMorganChase stock he has accumulated over the years are now worth $1.4 billion, making him the wealthiest bank C.E.O. in the country.

Not for nothing is he also the longest-serving C.E.O. on Wall Street, and he sure doesn’t seem like he’s going anywhere, at age 65, despite surviving throat cancer and a March 2020 emergency heart surgery. “I feel good,” he told me a few days ago. “Physically I’m fine. My heart is still ticking, thank God. I can’t do all the things I used to do, but I’m raring to go, piss and vinegar, gravel in the gut, spit in the eye. I haven’t changed. I’m not sure anyone will ever change me that much.”

We were talking over Zoom, which neither of us liked, simply because I am in Nantucket and he is back in his office, on Park Avenue, setting a good example for the bank’s 255,000 employees, whom Dimon believes, correctly, will learn much more about banking and Wall Street from each other in close quarters than by continuing to work remotely. He is not yet requiring that the bank’s employees get vaccinated before returning to the office, but I can tell that he’s tempted by the thought. “It’s so obvious you’re supposed to get vaccinated,” he said. Instead, he asked them to fill out a form saying whether they are, or are not, vaccinated. “We need to know what we’re dealing with so we can operate effectively,” he continued, “and it may be different in different locations. Is it 90 percent of people in a particular building who have been vaxxed? Or is it 50 percent?” He believes firmly in the power of the “spontaneous combustion” that occurs in the office setting, among colleagues working closely together on teams.

Dimon had just returned from two days in California, pressing the flesh. “I saw my bankers in action,” he told me. “I got complaints straight from clients. I saw private bankers in action. A lot of the tech companies were telling me, ‘We should be doing things different here with A.I. or Snowflake.’ After two damn days, you come back and you’re just smarter. You know more. Then you walk around the hallways and people share articles, and they share stuff that you wouldn’t necessarily do. You get that spontaneous combustion.”

We started talking about the machine that he has built, reliably pumping out $40 billion in profit every year. It’s got “scale, scope and trust,” Dimon said, and 60 million American customers around the world. He conceded that there remains plenty of risk around—in interest rates, in reserves, and in trading—that can affect the bank’s profitability. But he remains confident that the machine will continue to do its job, year after year. “Building a bank can be very volatile,” he continued. “But the volatility of our revenues is very low. Think of our platform. A lot of our revenues are recurrent. We have $120 billion in revenues a year, but asset management recurs. Cash management recurs. Custody recurs. The consumer bank is one big recurring operation—a large chunk of it is in the bag given our role as a middle man for customers doing high-volume business every day … So yeah, the machine is a very powerful machine with very high returns on capital.”

Still, Dimon said, he worried about the competition. In investment banking, he’s got Goldman Sachs, Morgan Stanley, and Bank of America. (He didn’t mention Citigroup—probably with good reason—but of course it is a serious competitor too, as are a slew of smaller advisory firms.) “They’re all back,” he said. There is also the so-called “shadow banking” system, of course, the less regulated competitors who are providing credit and equity to many companies. “It’s now $1.5 trillion,” he explained. “I’m not against it. I’m just stating facts.”

On the trading front, JPMorganChase competes against players like Citadel and Susquehanna. But Dimon’s real agita, he said, comes from those companies JPMorganChase competes against on the payments and consumer banking side of the equation. “PayPal is bigger than all banks in the world, ex-China, other than JP Morgan,” he continued. “Square is worth $220 billion.” Electronic payment companies, such as Stripe and Ant, are worth about $300 billion. Visa is worth $500 billion, Mastercard is worth $375 billion. And then there is Big Tech. “They are coming,” he said. “Google, Apple, Amazon, Facebook are working on payment systems, and using their platforms and data, which are enormously powerful. Google has already announced their Googleplex marketplace for banks, and they’re going to try to embed banks in the whole Google ecosystem.” Although he articulated that JPMorganChase’s competition in the next 20 years will be “unbelievably brutal,” I felt as though he doth protest a wee bit too much. I’d rather have JPMorganChase’s “scale, scope and trust” than any of the competitors he’s mentioned.

Naturally, Dimon and I also spent a fair amount of time discussing the post-Covid American economy and the potential for it to overheat. “The country is roaring back, which hopefully benefits those at the lower end of the income spectrum who need it most,” he said, calmly. “The recovery is like a tsunami … I think of it as a tsunami with a lot of churn in the water, as opposed to ‘We’re not quite sure it’s a tsunami.’ I’m pretty sure it is. The table is set. If you look at cash and capital and companies, the table is set for a boom and you’re going to get a boom, and you’re going to get inflation.”

He said that, in his opinion, the Federal Reserve appeared “all-in” on fueling the economic rebound. “They aren’t going to do anything that might jeopardize a strong recovery, and that’s it,” he went on. “My view is that they’re not going to do anything on monetary policy until you have unemployment below 5 percent and you actually see growth of 7 or 8 or 9 percent in the third quarter or the fourth quarter. And then they may have to move a little quicker than people expect.”

Like me, Dimon remains worried about the increasing possibility of serious overheating in the financial system, one that might lead to a financial crisis as a result of the Fed’s ongoing Quantitative Easing program, which is on its way to expanding the Fed’s balance sheet to $9 trillion. “I don’t think they ever want to see an article saying, ‘The Fed acted too soon and stifled the full recovery,’” he said. “I think they don’t mind the article saying, ‘The Fed didn’t act too soon.” He thinks there will be a rebound in inflation, as economists such as Larry Summers worry about. But he believes it might be manageable. He thinks the next few years will be akin to the Roaring Twenties, which followed the end of World War I and the end of the Spanish Flu pandemic. “I’m not saying it’s going to be the 12 percent inflation like you had in the ’70s,” he continued. “If you go back to 1929, I really do think it’s a completely different situation. I do think you have this roar, the pandemic, the money, the spending, the global recovery. You could have an extended recovery, but when it ends and how bad it is, I don’t know.”

Of course, Dimon is now 65, and everyone wants to know who he will choose as his successor. He understands it may be the most important decision he will ever make. Current handicapping suggests that he will choose a woman, either Mary Erdoes, 53, who leads the bank’s asset management and wealth division, or Marianne Lake or Jennifer Piepszak. Both Lake and Piepszak, who are each 51 years old, have served as chief financial officers of the bank and have just been named as co-heads of JPMorganChase’s big consumer and community banking business. (The bank’s two co-presidents and chief operating officers, Daniel Pinto and Gordon Smith, are generally not considered likely successors. Smith is retiring at the end of the year and Pinto is 58, putting him out of contention, many think, because of his age, even though he did run the place when Dimon was recovering from his heart problems.)

In any event, Dimon is not going anywhere soon. The board wants him to stick around, for what will probably be another five years. (When I interviewed him for a Vanity Fair profile in 2012, it seemed he was five years away from retirement back then, too.) As he says, he seems as energized as ever. He gets up “every day with gravel in the gut and spit in the eye and biting that other tiger and fighting like shit to keep your people smart, motivated, energized, honest, and making sure there’s no complacency, arrogance and all that,” he said. When the time is right, Dimon continued, there will be the matter of “making sure the management team is geared up, which it is, and then picking the right person to succeed me, which our board will do.”

And then what, I wonder? His wife and two daughters don’t think he has any hobbies, a point with which he disagrees adamantly. “I love business,” he concluded. “I like to travel. I love reading. I love reading histories and biographies. I love to read science. I love music. I love wine. I love food. I love barbecues. I love hanging out with my family. That’s all I need. I don’t need anything else. I’m not going to buy a yacht and I don’t play golf.”