Jamie Dimon, CEO of JPMorgan Chase, testifies during the hearing of the Senate Banks, Housing and Urban Affairs Committee entitled Annual Oversight of Wall Street Firms, in the Hart building on December 6, 2023.
Tom Williams | CQ-Roll Call, Inc. | Getty images
The more Jamie Dimon worries, the better his bank seems to be doing.
As JPMorgan Chase has become larger, more profitable and more and more crucial for the American economy in recent years, its star CEO has increased more and more what could be wrong – while going well for its bank.
In the best of cases and in the worst times, Dimon's public prospects are dark.
Whether it is his forecasts in 2022 for an “hurricane” reaching the American economy, his concerns concerning the World Order of the post-Second World War or his prudence about America which is hit by a punch of the recession and inflation, Dimon seems to lace all the reports on gains, the appearance of television and the investor event with another disastrous warning.
“Its bank management history is incredible,” said Ben Mackovak, a member of the board of directors of four banks and investors through his partner of the company Strategic Value Bank. “Its history to make economic and dulamity forecasts, not as good.”
During his two decades, JPMorgan, Dimon, 69, helped build a financial institution unlike everyone.
A sprawling giant in Main Street Bank and the finance of Wall Street High, Dimon's Bank is, in its own words, a winning winner with regard to money. It has more branches, deposits and online users than any peer and is a credit card and a leading small business franchise. It holds a market share greater than the negotiation and investment bank, and more than 10 dollars are traveling daily on its global payment rails.
'Warning drawn'
A 20 -year examination of annual Dimon's annual investor letters and its public declarations show a separate development. He became CEO in 2006, and his first decade at the helm of JPMorgan was consumed by the American housing bubble, the 2008 financial crisis and its long consequences, including the acquisition of two failed rivals, Bear Stearns and Washington Mutual.
As he started his second decade at the head of Jpmorgan, however, just when the legal wood of the mortgage crisis began to fade, Dimon began to see new storm clouds on the horizon.
“There will be another crisis,” he wrote in his CEO letter of April 2015, reflecting on potential triggers and stressing that recent Girations in American debt were a “warning shooting” for the markets.
This passage marked the start of the more frequent financial warnings of Dimon, including the concerns of a recession – which did not occur before the 2020 pandemic triggered a two -month contraction – as well as concerns concerning market collapses and the US deficit of the ball.
But he also marked a decade in which JPMorgan's performance began to hang his rivals.
After having progressed at around $ 20 billion in annual profits for a few years, the sprawling machine that Dimon supervised began to really hit his stride. JPMorgan generated seven record annual profits from 2015 to 2024, more than twice more than in the first decade of Dimon than the CEO.
Meanwhile, investors began to aggressively bid JPMorgan's actions, buying the idea that it was a growing company in an otherwise boring sector. JPMorgan is now the most precious financial company in the world and spends $ 18 billion a year for technology, including artificial intelligence, to stay like that.
While Dimon seems perpetually worried about the economy and the increase in geopolitical disorders, the United States continues to get started. This means that unemployment and consumption expenses have been more resilient than expected, allowing JPMorgan to produce record profits.
In 2022, Dimon told a room of professional investors to prepare for an economic storm: “At the moment, it's a bit sunny, things are doing well, everyone thinks that the Fed can manage this,” said Dimon, referring to the federal reserve that managed the post-pandemic economy.
“This hurricane is there, at the bottom of the road, to us,” he told.
“This is perhaps the most dangerous period that the world has seen for decades,” said Dimon the following year in a statement of results.
But investors who listened to Dimon and made their portfolios would have missed the best race of two years for the S&P 500 in decades.
'You look stupid'
“This is an interesting contradiction, without a doubt,” said Mackovak about Dimon's remarks and the performance of his bank.
“Part of this could simply be the creation of a brand of Jamie Dimon,” said the investor. “Or have a win-win story where if something goes wrong, you can say:” Oh, I called it “, and if it is not the case, your bank is still competing.”
According to the former president of a top five American financial institution, bankers know that it is wiser to disseminate caution than optimism. Ancient Citigroup The CEO Chuck Prince, for example, is best known for his bad comment from 2007 on the mortgage company that “as long as music plays, you must get up and dance”.
“We learn that there are much more drawbacks of your reputation if you are too optimistic and that things go wrong,” said the former president, who asked to remain anonymous to discuss Dimon. “It's harmful to your bank, and you look stupid, while the opposite, you just seem to be a very careful and thoughtful banker.”
The bank is finally a calculated risk company, and its CEOs must be adapted to the decline, the possibility that they are not reimbursed on their loans, said banking analyst Mike Mayo Wells Fargo.
“It is the old cliché that a good banker has an umbrella when the sun shines; they always look at the corner of the street, always aware of what could go wrong,” said Mayo.
But other longtime Dimon observers have seen something else.
Dimon has a “subsequent engine” for his public comments, according to Portales Partners analyst Charles Peabody.
“I think this rhetoric is to keep its management team focused on future risks, whether or not they occur,” said Peabody. “With a highly efficient and strong growth franchise, he tries to prevent them from becoming complacent, so I think it is anchored in their culture an atmosphere of the constant war room.”
Dimon does not lack things to fear these days, despite the fact that his bank generated a record of $ 58.5 billion in profits last year. Conflicts in Ukraine and Gaza Rage, the American national debt is developing, and the trade policies of President Donald Trump continue to shake up opponents and allies.
Banking Logos Cemetery
“It is fair to observe that he is not omniscient and that everything he says is not realized,” said Brian Foran, analyst of the Truist Bank. “It comes more from a point of view that you must be prepared for X, as opposed to convincing us that X will occur.”
JPMorgan was better positioned for higher interest rates than most of its peers in 2023, when rates jumped and punished those who held long -term low -yield obligations, noted Foran.
“For many years, he said,” Be ready for 10 years at 5%, and we all thought it was crazy, because it was like 1% at the time, “said Foran.” It turns out that being prepared was not a bad thing. “
The best explanation of Dimon's prospects is perhaps that, whatever JPMorgan's size, financial companies can be fragile. The history of finance is one of the rise and the fall of institutions, sometimes when managers become complacents or gourmet.
In fact, the banking logos cemetery which is no longer used includes three – Bear Stearns, Washington Mutual and First Republic – which were subsumed by JPMorgan.
During the meeting of his bank's investor day this month, Dimon stressed that, over the past decade, JPMorgan has been one of the only companies to obtain annual yields of more than 17%.
“If you come back to 10 years before that, ok, many people have earned more than 17%,” said Dimon. “Almost everyone went bankrupt. Listen to what I just said?”
“Almost all of the world's financial companies have almost failed,” he said. “It's a difficult world there.”
