00:00The name of the game in American capitalism, especially American financial capitalism, is being big, and no one is bigger on Wall Street than JPMorgan Chase.
00:12How big is it? With a $4.6 trillion balance sheet, it holds around 20% of all the money in the U.S. banking system. JPMorgan is more valuable than its three biggest rivals combined.
00:26Last year, JPMorgan earned the highest profit in the history of American banking. They became the only bank to ever crack $50 billion in profit.
00:34There are a few different ways that you can measure a bank's success. You can look at profit, market value, asset size, but there's also staying power.
00:43There is essentially no figure in the history of modern finance who has won power and kept it, like Jamie Dimon.
00:50Jamie Dimon is a great banker. I think he's been the head of JPMorgan for 17 years, something like that.
00:57This country is a lot better off because Jamie Dimon has been running JPMorgan.
01:00But the success of Jamie Dimon and JPMorgan casts a long shadow.
01:05When you think about it, it's more of a question mark than an exclamation point.
01:09What is going to happen to this gigantic bank after its longtime CEO leaves? No one really knows.
01:15For 20 years, Dimon has led JPMorgan's ascent of Wall Street, financial dominance that manifests itself like this, its new headquarters on Park Avenue.
01:31JPMorgan is about to get essentially its own little mini neighborhood, a kind of Jamie Dimonville, if you will.
01:38This was a labor love to have a physical embodiment, which represents our company.
01:43JPMorgan has something like 17,000 employees in New York City, making it one of the city's largest private employers.
01:49So they have their new building, which will hold about 10,000 of them.
01:53Then you look across the street to 383 Madison.
01:56That's the old Bear Stearns headquarters.
01:57And then they bought 250 Park.
01:59And despite his noted opinions on work from home.
02:02And don't give me the s*** that work from home Friday works.
02:05People join JPMorgan because they want to work for Jamie Dimon, this legendary CEO, dean of Wall Street.
02:12He just wants his people and his organization to be the best.
02:16And so he brings his A-game and he expects the people around him to do the same.
02:21All of this adds to the Dimon aura, unfaltering Wall Street confidence mixed with, at times, unpredictable candor.
02:29The debt ceiling is potentially catastrophic.
02:31That hurricane is right out there, down the road, coming our way.
02:35I probably shouldn't say this, but when you see one cockroach, there's probably more.
02:39He just says what he thinks.
02:41Absolutely not. And that would be the road to hell for America.
02:44Over the years, as Jamie Dimon has evolved into this more statesman-like role that he's taken atop the finance industry,
02:52he wades further and further into policy and things that aren't directly touching banking.
03:01Jamie Dimon had a long-running joke that he would be there five more years, no matter when asked.
03:08I love what I do.
03:10He is 69 years old. He's had a couple health issues over the years, including throat cancer more than a decade ago,
03:16and more recently, a heart issue in 2020.
03:19And JPMorgan actually had to appoint temporary co-CEOs while he recovered.
03:24Though he keeps coming back for more, eventually he will retire.
03:28But when and who will fill his shoes is anyone's guess.
03:32There have been some iterations of potential successors that have ended up all leaving to go take, you know, another big job or leaving to retire.
03:41The three current likeliest contenders to take over for Jamie Dimon when he eventually retires are Troy Rohrbaugh and Doug Pettno,
03:48who run the Commercial and Investment Bank, and Marion Lake, who runs the Consumer and Community Bank.
03:52But they're the latest in a series of likely contenders, and there are always more coming up the chain at JPMorgan.
03:59At the same time, for JPMorgan investors, there really is this Jamie Dimon premium where they're most interested in more Jamie.
04:07Historically, this sort of cult of personality and business is often called the key man risk.
04:16Where would Amazon be without Bezos? Or Tesla without Musk?
04:20So too is Dimon to JPMorgan.
04:22While it's certainly true that Jamie Dimon's tenure atop JPMorgan overall has been very successful by a lot of measures,
04:29it hasn't been all rainbows and butterflies.
04:31For example, in 2012, there was a $6 billion trading loss called the London Whale.
04:35Jamie was called to testify in front of Congress a couple times.
04:39In some cases, he actually thrived in the congressional hearings.
04:42He had some lawmakers asking him for advice on the economy.
04:45I would like to come away from the hearing today with some ideas on what you think we need to do,
04:50what we maybe need to take apart that we've already done.
04:54Another episode involved the acquisition of Frank, a financial planning platform for students
04:59that led to its founder being convicted of defrauding the bank.
05:02But when all is said and done, they paid $175 million for it, which amounted to three hours of revenue that year.
05:09So that's a great example of how these kind of missteps become more embarrassments than anything else.
05:15JPMorgan has been able to survive these missteps, whether big or small, because of its fortress balance sheet.
05:22Fortress diamond is always about the balance sheet.
05:24Fortress balance sheet is a term that Jamie Dimon has been using throughout his entire career.
05:28It's constant stress tests.
05:30It's looking across the range from best possible outcome to worst possible outcome
05:34and making sure that JPMorgan can weather that storm.
05:38When you think about risk, think about things that can go terribly wrong.
05:41Can you survive them?
05:44Still, when it comes to the government's annual stress tests and other regulations JPMorgan is subject to,
05:49Dimon is a critic.
05:51There are a lot of rules that Jamie Dimon does not like.
05:54It's just more regulations and more rules and more requirements.
05:56One of his governing principles on the topic of regulation is that it should not be so complicated.
06:04He has this famous spaghetti chart, which is a graph of all the overlapping regulators that JPMorgan deals with.
06:11And he often will carry around a paper version of that, especially when he's in D.C.
06:18But despite all the regulations, government hasn't kept the bank from growing.
06:23We can look at the financial crisis when much of the building blocks of the modern JPMorgan were built.
06:29JPMorgan rescued Bear Stearns, which gave them a far larger trading business.
06:34They scooped up Washington Mutual after it failed.
06:36So the JPMorgan that came out of the great financial crisis was a much different, much larger JPMorgan than the one going in.
06:43Are you too big to fail?
06:44I don't know what that word means anymore.
06:46One irony of the global financial crisis is that the thing that we associate it with, being too big to fail, ended up resulting in a landscape where the biggest banks got even bigger.
06:58At the time, Jamie Dimon had only been CEO of JPMorgan for a couple of years.
07:02But he did warn about the excesses in subprime mortgage lending in an annual letter to shareholders.
07:08Looking back at that letter now, he was clearly right.
07:11A year ago, we were worried about banks that were too big to fail.
07:15But in the last year, big banks have gotten bigger.
07:18It is sort of the tragic failure about the regime we came in with.
07:22For all the unrest, the regime would remain largely unchanged.
07:26Years later, JPMorgan would benefit from a crisis yet again in a government-led deal.
07:32The U.S. is pushing First Republic to be rescued with banks after the stock slumps.
07:37First Republic was a regional bank based in California that really focused on serving wealthy clients until it failed in 2023.
07:47The United States government literally had rules on the book to stop JPMorgan from getting an even bigger portion of deposits in this country.
07:54And then when First Republic got in trouble, that same government allowed JPMorgan to buy it.
08:00First Republic will now be taken over by JPMorgan.
08:05Between that and Silicon Valley Bank's failure paved the way for JPMorgan to dial up their desire to be the go-to bank for the venture capitalist and startup ecosystem.
08:14The bank also constantly assesses the competitive landscape.
08:19What is Block doing?
08:20What is Citadel Securities doing?
08:22What is Apple doing?
08:23And really, you know, try to make sure that someone like Apple doesn't come in and eat their lunch.
08:31Because JPMorgan is pretty much everywhere, Diamond's successor will inherit not only the firm's vast empire, but a pivotal role in the stability of the U.S. and global economy.
08:41You think about the Fortress balance sheet concept and practically what that's meant for JPMorgan and Jamie Dimon over time.
08:47And it's JPMorgan constantly emerging bigger and stronger from crises that have taken other firms down.
08:54The rules of Wall Street, informally speaking, are to make as much money as you can legally and to lose money as infrequently as possible.
09:04JPMorgan has been very, very good at that playbook.
09:11JPMorgan has been very, very good at that playbook.
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