the office’s newspaper subscriptions to cut costs—not a real financial visionary. Now, with JP Morgan leapfrogging to the very top of the banking business, Dimon was being regarded as something akin to the reincarnation of John Pierpont Morgan, the nineteenth-century financier who helped ease the Panic of 1907.
Dimon, the
With all the adulation he had been receiving, Dimon had become almost giddy at the prospect of speaking at today’s hearing. While most CEOs dread being hauled in front of Congress—Alan D. Schwartz of Bear Stearns had spent days reviewing his testimony with his high-powered Washington lawyer, Robert S. Bennett—Dimon considered his first chance to testify in front of Congress to be a signal honor.
The night before the hearing, he called his parents to make sure they would watch it on TV.
Jamie Dimon’s success is not an enormous surprise, as he is a third-generation banker. His grandfather had immigrated to New York from Smyrna, Turkey, changed his name from Papademetriou to Dimon, and found work as a stockbroker, which at the time was hardly considered a glamorous job. Jamie’s father, Theodore—who met his mother, Themis, playing spin-the-bottle when they were twelve years old—was also a broker, and a very successful one. Theodore had done so well that he was able to move his family from Queens to an apartment on Park Avenue, where he raised Jamie and his brothers, Peter and Ted. One day, when Jamie was nine years old, his father asked his sons what they wanted to be when they grew up. Peter, the eldest, said he hoped to become a doctor. Ted, Jamie’s twin, said he didn’t know. But Jamie knew and announced self-assuredly, “I want to be rich.”
After attending the Browning School on Manhattan’s Upper East Side, Jamie studied psychology and economics at Tufts University; later, at Harvard Business School, he developed a reputation—as much for his arrogance as for his intelligence. Just a few weeks into the fall semester of his first year there, the professor in an introductory class on operations was going through a case study on supply chain management at a cranberry cooperative. Midway through Dimon stood up and interrupted him with, “I think you’re wrong!” As the startled professor looked on, Dimon walked to the front of the class and wrote the solution to the supply problem on the blackboard. Dimon was right, the professor sheepishly acknowledged.
After a summer working at Goldman Sachs, Dimon sought career advice from the portly, cigar-chomping, serial deal maker named Sandy Weill. Jamie’s family had become close to the Weills in the mid-1970s, after Sandy’s brokerage firm acquired Shearson Hammill, where Dimon’s father was a top broker. While at Tufts, Dimon had even written a paper on the Hayden Stone takeover of Shearson, which his mother showed to Weill, who was impressed with its analysis.
“Can I show it to people here?” Weill asked Dimon.
“Absolutely,” Dimon replied. “Can I have a summer job?” Weill was happy to oblige.
After graduating from Harvard Business School, Dimon received offers from Goldman Sachs, Morgan Stanley, and Lehman Brothers. Weill invited Dimon to his Upper East Side apartment and made his own offer: a position as his assistant at American Express, where Weill was now a top executive after having sold Shearson for nearly $1 billion. “I won’t pay you as much,” Weill told the twenty-five-year-old, “but you’re going to learn a lot and we’re going to have a lot of fun.” Dimon was sold.
Weill and Dimon’s tenure at the company turned out to be brief. Although he once boasted that “the Jews are going to take over American Express!” Weill still found himself thwarted by the WASP hierarchy, unable to cut deals on his own. Increasingly frozen out by his colleagues and the board, he quit as president of American Express in 1985; Dimon, whose talents had been noticed by CEO James Robinson, was asked to stay. Dimon was at a point in his life where many in the same position might have opted for security; his wife had just given birth to their first child. But he decided to stick with Weill, even though Weill hadn’t yet settled on his next project and had taken space in a small office. As the months wore on and Dimon found himself watching Weill sleep off his martini lunches on their office couch, he wondered if he had made a bad bet. Weill couldn’t seem to get anything off the ground, and Dimon had asked himself whether his mentor had played his last hand.
Then, in the wake of Weill’s failed takeover of Bank of America, two executives at Commercial Credit, a subprime lender based in Baltimore, pitched him and Dimon on buying the company from its parent. Weill put up $6 million of his money to do the deal (Dimon invested $425,000), and the company was spun off, with Weill in charge. Dimon set himself up as the operations man, obsessively cutting costs. A lean-and-mean Commercial Credit became the cornerstone of a new financial empire, one that Weill and Dimon built through more than one hundred acquisitions. In 1988 the pair got their return ticket to Wall Street with the $1.65 billion acquisition of Primerica, the parent of the brokerage firm Smith Barney. A $1.2 billion purchase of Shearson from American Express followed in 1993.
Dimon’s reputation rose alongside Weill’s. They were a team: Weill, the strategist and deal maker; Dimon, more than twenty years his junior, the numbers cruncher and operations whiz. They had moved beyond mentor and protege to something more like a long-married combative couple. In the Midtown Manhattan offices of Primerica, the chairman and the chief financial officer would argue ferociously, their voices booming down the corridors. In meetings Dimon would roll his eyes whenever he thought Sandy had said something foolish.
“You’re a fucking asshole!” Weill would yell at him.
“No, you’re the fucking asshole!” Dimon would shout back.
By 1996, after a $4 billion deal for Travelers, the company needed someone to run the combined asset- management operations. Weill was quietly pushing Dimon to promote his daughter, Jessica Bibliowicz, then thirty- seven, who was running Smith Barney’s mutual fund business. Dimon and Bibliowicz had known each other since they were teenagers, but she wasn’t considered a top-flight manager, and he had reservations about entrusting her with so powerful a job. A top executive took Dimon aside. “Promote her,” he warned Dimon. “You’re killing yourself if you don’t.” Dimon, however, was not persuaded and told Weill and others that she wasn’t ready for the job; they had better, more experienced executives in line.
The following year Bibliowicz announced that she was leaving the company. She didn’t blame Dimon for her decision but tried to emphasize the positive aspects of her departure, telling her father: “Now we can be father and daughter again.” But Weill was furious, and the relationship between him and Dimon would never be repaired, with tensions flaring with increasing frequency as the company continued its rapid expansion. Travelers acquired Salomon in 1997, and Weill made Deryck Maughan, a Briton who had helped steer Salomon Brothers through a Treasury bond scandal, the co-chief executive of Salomon Smith Barney, along with Dimon. This new power-sharing arrangement, although logical, greatly displeased Dimon.
A more injurious slight came after the $83 billion merger with Citicorp, the deal that rewrote the rules of the U.S. financial system as the last Depression-era barriers between commercial and investment banking—passed as the Glass-Steagall Act of 1933—were removed by a bill introduced by Republican senator Phil Gramm of Texas and Republican congressman Jim Leach of Iowa. Dimon had worked tirelessly to bring the deal to completion, yet when
