Jamie Dimon on the Line

By William D. Cohan and Bethany McLean

Is Jamie Dimon a straight-shooting managerial genius, who made JPMorgan Chase the only “port in the storm” during the financial meltdown—the latest coup in his brilliant financial career? Or a knee-jerk opponent of bank reform, in denial about the recent, humiliating $6 billion blunder in JPMorgan’s London office? Or both? William D. Cohan and Bethany McLean put “the King of Wall Street” on the grill. On a recent August morning in the ballroom of the Townsend Hotel, in the affluent town of Birmingham, Michigan, Jimmy Lee, the vice-chairman of investment banking at JPMorgan Chase and one of the grand old men of Wall Street deal-makers, was quoting General George S. Patton Jr. “Moral courage is the most valuable and usually the most absent characteristic in men,” Lee told the audience of 150 or so JPMorgan Chase clients, who were gobbling up berry parfaits and quiches under crystal chandeliers. Patton, none of the older people there needed reminding, was the swashbuckling military genius who led his troops through fierce fighting in North Africa, Sicily, and France during World War II. But Lee was not interested in the war hero per se. Rather, without a trace of irony, he was using Patton’s words to describe his boss Jamie Dimon, JPMorgan Chase’s C.E.O. “Jamie Dimon,” said Lee, “has moral courage running through his veins.” Now JPMorgan, like the rest of the industry, is lurching to the right. Combined contributions from JPMorgan Chase PACs and employees are nearly four times as much for Mitt Romney as they are for Obama. There’s a feeling in Washington that the banks, JPMorgan included, have squandered some of their credibility. “What they [regulators] say when the industry complains is, I don’t believe them,” says Karen Shaw Petrou, co-founder of Federal Financial Analytics, a research and advisory firm. “The industry has repeatedly said things like ‘This rule will doom credit to small businesses.’ That’s hurt their credibility and undermined their ability to get policymakers to pay attention to studies that prove that some rules may even have a perverse impact.” Such behavior shows Wall Street did not have its fingers on the nation’s pulse. “I think they underestimated the enormous negativity out there about them,” Daley says. “They were used to being at the top, to being so loved and so admired, investment bankers with their houses in the Hamptons, wow, they make so much money, so they must be so smart—they are geniuses. They underestimated the depths of the anger … [and] the problem they had created for the political system.”