Commentary on Jamie Dimon's views (Part Four)

Jamie Dimon’s letter to JPMorgan Chase’s shareholders created quite a storm of commentary amongst various industry observers, not all of it complementary.

Tom Brown of Bankstocks.com says that the letter is: "outstanding. The letter isn’t just a wrap-up of how Morgan did last year (although, as is typical, Jamie’s candid on the topic)—it’s also a worthwhile meditation on how and why financial crisis happened, and what sort of changes need to be made to prevent another one. This is just the sort of letter, that is to say, that a lot of us hoped Warren Buffett might write this year, but did not. As far as that goes, it may be the best shareholder letter I’ve ever read, from any CEO, ever."

The Wall Street Journal notes that Dimon also focuses upon succession planning: "Ladies and Gentlemen, place your bets. Who will replace the chief of JP Morgan Chase & Co?  In his annual letter to shareholders, CEO Jamie Dimon says his number one priority this year is to find his successor."

Meanwhile, one of the more interesting takes on the letter is Simon Johnson's over at Baseline Scenario:

There are two kinds of bankers to fear.  The first is incompetent and runs a big bank.  This includes such people as Chuck Prince (formerly of Citigroup) and Ken Lewis (Bank of America).  These people run their banks onto the rocks – and end up costing the taxpayer a great deal of money.  But, on the other hand, you can see them coming and, if we ever get the politics of bank regulation straightened out again, work hard to contain the problems they present.

The second type of banker is much more dangerous.  This person understands how to control risk within a massive organization, manage political relationships across the political spectrum, and generate the right kind of public relations.  When all is said and done, this banker runs a big bank and – here’s the danger – makes it even bigger.

Jamie Dimon is by far the most dangerous American banker of this or any other recent generation.

That may be a bit extreme, but Jamie Dimon is by far the most powerful American banker of this generation.  More so than even Lloyd Blankfiend, and Barack Obama and most of his admin linger upon his every utterance, as do the markets.

So my own view is that Jamie Dimon is a man to take seriously.  Very seriously.

And that's why I've posted most of his letter here, as I'm taking note of his comments very seriously.

Part One: An overview of JPMorgan Chase's Operations.
Part Two: Jamie's views on banker's bonuses and TARP.
Part Three: Jamie's views on regulatory reform.

Comments

[kim]

Hindsight is so 20/20....and now that JP Morgan is under control, let's fix it so they are protected.

Re the consumer and big banks, while big banks maybe have better products, and that is debatable, the service for the average consumer is untenable and in that sense, big banks whether they are making their shareholders rich or not, just don't work. The consumer needs a place to safely place their money, get loans, and for the bankers to work with them. Small regional banks do this better than big banks.

Big banks don't do it well at all. Unless I presume you are a multimillion dollar investor who does get royal treatment. Well keep them as your club.

The rest of us own our own money. It doesn't belong to the banks. That's the way it used to be anyway. And a bank is there to service their customer not for the customer to be of service to the bank.

Wish I could say I'd live to see the day the big banks fail and don't take the rest of us with them, on that point I will agree.

And of course regulations were supposed to be in place so who is to say the risk management system he is discussing won't get run over by special interest groups and some overy ambitous lawmaker anyway.

I'd like to see some competition created for banks. Let's have another method of managing our funds than putting them in a tradtional bank. That may actually be the one thing that will maintain the checks and balances.

Which reminds me, whatever happened to antitrust law in this country? That also prevented an institution from getting so big they could harm an entire nation. That seems to have disappeared from the map altogether, not even being brought up in any conversation....