JPMorgan’s CEO Jamie Dimon has a reputation for being brusque, and sometimes combative, so he wasn’t too pleased Friday when a bank analyst suggested he might be losing his edge.
In an exchange with Mike Mayo, an analyst at Calyon Securities, in a conference call that took place after the bank reported its latest quarterly results, Mayo asked if the big losses that the bank saw as a result of a bad trade in its London office was evidence that JPMorgan has become too big to manage.
Has the bank reached a tipping point when it comes to size or complexity that makes it more difficult to manage than in the past?
“No,” Dimon replied curtly, prompting laughter from others on the call.
“What can you say to further reassure us?” Mayo continued. “Have you lost a step? Has the focus gone off?”
More laughter, and then Dimon’s reply:
“Am I getting old? Mike, this company is the same company that went through ’06, ’07, ’08, ’09, 2010, 2011, assimilated Bear Stearns and bought Washington Mutual,” Dimon thundered.
“We had record earnings last year. We had record earnings the year before. It’s likely, if you look at your own estimates, we’ll have record earnings this year.”
“We’ve made a mistake. We’ve completely disclosed the mistake. We’ve denuded ourselves in front of you. We’re in better shape than we were before.”
Mayo responded by saying that the details divulged about the trading losses at the bank’s London unit were akin to seeing how sausage is made.
“It makes me wonder if I might get food poisoning in the future,” Mayo quipped. “What would you say if you’re talking to a portfolio manager and you have 20 seconds to say why that won’t happen again, what would you say to that portfolio manager?”
Dimon snapped back that several steps have been taken to minimize future risk.
“I think it’s silly for anyone in the business world to think you’re not going to make mistakes,” Dimon said. “It is not possible in the real world. That’s only possible in the fictional world. I just think the mistakes should be smaller, fewer and far between, this being an exception.”