The Jamie Dimon Interview: How JP Morgan Became an $800 Billion Bank

David, we completely blew it. We went

into Jamie Diamond's office, had our little meet and greet. We did not ask about the duel pistols.

Yeah. From the duel, Alexander Hamilton and Aaron Burr, which JP Morgan owns and keeps in their headquarters. And we blew it. We didn't ask to see them. We'll

it. We didn't ask to see them. We'll

just have to come back.

When they finish the new building, I'm sure they will be in the executive floor. We can go get a viewing of the

floor. We can go get a viewing of the uh, you know, piece of American history.

All right, speaking of American history, let's do it.

Let's do it.

[Music] Got it. You

it. You got it. You

it. You all the way.

[Music] Welcome to the summer 2025 season of Acquired, the podcast about great companies and the stories and playbooks behind them. I'm Ben Gilbert.

behind them. I'm Ben Gilbert.

I'm David Rosenthal.

And we are your hosts. Today's episode

is the story of a rising star on Wall Street in the 1980s who worked with his mentor to merge and acquire their way to the top of the financial world in the

'90s, who then got fired unexpectedly by that same mentor who cast about deciding what to do next and then in 2000 accepted a job turning around a

poorlyrun Midwestern bank. Then over the next 25 years, he would orchestrate one of the most remarkable runs in banking history and really all of corporate

history. This is the story of Jaime

history. This is the story of Jaime Diamond and how he created the modern financial behemoth JP Morgan Chase out of the belleaguered component parts of

Bank One, JP Morgan Chase, Bear Sterns, Washington Mutual, and First Republic.

Jaime is now the longest serving CEO of any major Wall Street bank and is viewed as kind of the great stabilizer of the American financial system, especially

during the 2008 financial crisis. He now

sits at top the largest bank in the US with an over $800 billion market cap, which is more than twice their nearest competitor. They are the only bank

competitor. They are the only bank within spitting distance of these sort of big trillion dollar tech companies that we've covered here unacquired. And

to really put a finer point on the dominance, they are the most valuable company east of the Mississippi in the United States and the only company east of the Mississippi worth more than half

a trillion dollars. Incredible. So the

question of course is how did he do it?

I mean banks fail. Financial firms often have spectacular blowups and large organizations period financial or not can often get so bloated that they slow down to a crawl. So what did Jaime

Diamond do differently? Well, today's

episode we have Jamie with us himself to tell the story. We recorded this live in front of 6,000 Acquired fans at Radio City Music Hall in New York City. So,

you'll notice it's a different format than our usual episode. We're always

trying to figure out what version of Acquired works live with an audience.

And this is our latest iteration. The

Radio City Show also had a second act, a late night talk show where we had conversations with the CEO of the New York Times, Meredith Kobet Levian, and the chairman of IA, Barry Diller, plus

some cameos from around the Acquired Cinematic Universe. And we cannot wait

Cinematic Universe. And we cannot wait to share all of that with you at a later date. Well, if you want to know every

date. Well, if you want to know every time an episode drops, check out our email list, acquire.fm/e.

Come join the Slack and talk about this with us afterwards.

Slack. If you want more acquired between each monthly episode, check out ACQ2, our interview show where we talk with founders and CEOs building businesses in areas we've covered on the show. And

before we dive in, we want to briefly thank our presenting partner JP Morgan.

Yes, the same JP Morgan, which is funny because when we started planning this show together, gosh, almost a year ago, it was immediately clear to Ben and me that the very best person who acquired

Could Interview in New York also happened to be their CEO.

And as you all know from the episodes over the last couple years, JP Morgan has been a fantastic partner of ours and their payments team demoed all kinds of cool technology at the event. Our huge

thanks to the JP Morgan team for putting on the show with us. And if you ever want to learn more, just click the link in the show notes and tell them that Ben and David sent you. So with that, this show is not investment advice. Dave and

I may have investments in the companies we discuss, and this show is forformational and entertainment purposes only. On to our conversation

purposes only. On to our conversation with Jamie Diamond. Well, this feels appropriate.

You guys dressed up for me.

You dressed up for us, too. Thank you.

Last year, we had you on the video board at at Jason. Uh, you were looking very summery there. You look great tonight.

summery there. You look great tonight.

Thank you.

Yes. Well, we know you're a big history buff and we consider ourselves historians above all else. So, uh, what we'd like to do here tonight is walk

through the 20-year story with you of sort of how you turned JP Morgan Chase from a bank above many, a bank among many to the most systemically important financial institution in the world. Are

you game?

Sound good?

Sounds great. Thank you. Yeah.

Uh we want to start in 1998.

You and your mentor Sandy While have just spent the past 13 years building the modern financial institution conglomerate. Really the the blueprint

conglomerate. Really the the blueprint for what JP Morgan Chase is today.

Except it's not JP Morgan, it's Croup.

And everybody on Wall Street in the entire world expects that you are going to be named CEO of Croup in short order.

This is 1998. 1998. This is not what happens. Instead, you get fired and you

happens. Instead, you get fired and you have to restart your whole career, everything, your whole life from scratch.

Sorry to start here, by the way.

But but before we get into what you do next, what was the model that you and Sandy built at Croup?

Okay, first of all, I am thrilled to be here. I want to congratulate these guys

here. I want to congratulate these guys for building the acquired.

uh it's a it's a great intelligent addition to what we need to learn in society. And so I would say it wasn't

society. And so I would say it wasn't quite the model because if you look at what we did at commercial credit primarch was then travelers and merged.

We were a financial conglomerate. We

bought lots of companies and lots of different businesses. We fixed them up.

different businesses. We fixed them up.

We turned around. We made money. Uh and

then we merged it with City Bank which obviously was a huge bank. And uh you know my view is I was we should skinny it down and kind of shed the parts that aren't that important to the rest of the company and keep the things that

strategically belong together together.

That was one of my small disagreements with Sandy about the future of the company. And so um but it was big. It

company. And so um but it was big. It

was making a lot of money. It was quite successful at the time. Uh and then I got fired.

So so so how are you feeling in that moment?

When I got fired?

Yeah, that moment. Well, I you know, my wife is here and I was hosting a hundred people uh recruiter recruiting kids in my apartment in New York City, same apartment I have now. And uh they called

me, we haven't managed meeting a Sunday at 4 p.m. that night. And Sandy and John Reed called me up and said, "Can you come a little early? We got a bunch of stuff to talk about." I was the president, chief operating officer. I

drove I said, "I can't." They said, "Well, it's really important." So I drove up there uh and I sat down in the room with Sandy and John and they said they want to make a few changes and they have three of them and they said we one

one we want to make this person in charge of that. I okay well that didn't make sense to me. The second one they wanted to make someone in charge of the global investment bank which I was running. I thought it was another stupid

running. I thought it was another stupid decision. And the third is they said and

decision. And the third is they said and we want you to resign. And I said okay because you know at that moment I knew it was all arranged. The boards had voted. The press release was written.

voted. The press release was written.

The management team was coming up. So I

waited uh you know for the management team to come up. I wished them the best.

I said, "You guys have a chance to build one of the great companies." They all thanked me. Uh they Sandy said, "You

thanked me. Uh they Sandy said, "You want to do the press with me?" I said, "Yeah, but I'll do it from home." Uh so I went home, went to see my kids. They

were like one of my daughters here too.

They were like 12, 14, 12 and 10. And I

walk in the front door and uh I tell them, you know, I I was fired. And the

youngest one says, "Daddy, uh, do we have to sleep on the streets?" I said, "No, no, we're we're okay." And the middle one, who's always obsessed with college for some reason. "Can I still go to college?" I said, "Yeah." And the one

to college?" I said, "Yeah." And the one who was here was the oldest one said, "Great. Since you don't need it, can I

"Great. Since you don't need it, can I have your cell phone?"

And then that night about 50 people came over. All the same people I just met,

over. All the same people I just met, all the management team bringing whiskey. And it was like, "Habina, your

whiskey. And it was like, "Habina, your own wake." And there's one really taller

own wake." And there's one really taller guy who came in, very good friend of mine, and he looks and my my daughter looks up and says, "Who are you?" He

says, "I used I work for your daddy."

And he says, "Not anymore you don't."

And and uh that was it. I was okay. You

know, I was like I tell people you're my net worth, not my self worth that was involved.

And for anyone who doesn't sort of already know Jaime's story, you were the rising star. I mean, you were the city

rising star. I mean, you were the city was the biggest bank. You were the era parent. I mean, this is this was like

parent. I mean, this is this was like unfathomable and for you to take it this gracefully, uh, you know, it says a lot.

So, you're sort of wandering in the woods as I best I can kind of reconstruct it for about 18 months. Is

that right? Figuring out what's next.

Yeah. I, you know, it took me a while to e exit and sign agreements and get out.

They were kind of mean. Uh, but and then I step in office and it was late. I we

went for a nice long vacation and stuff like that. Uh when I got back in

like that. Uh when I got back in September, so that was six months later, I went to my I started going to work. I

had nothing to do, but I went from, you know, to 9 to5 and started calling people and thinking about what I'm going to do. It was in the Seagru building, so

to do. It was in the Seagru building, so I go for lunch uh downstairs every day.

And I Four Seasons at the Four Seasons. And I explored everything. Started my own merchant

everything. Started my own merchant bank. I could have retired just teaching

bank. I could have retired just teaching uh just investing, but I was 42.

And you you took a call about running Amazon right?

Say it again.

You took a call about running Amazon, didn't you? I went to I loved I went to

didn't you? I went to I loved I went to visit Jeff Bezos who was looking for a president at the time. He and I hit it off. We've been friends ever since. He's

off. We've been friends ever since. He's

an exceptional human being, but it was like a bridge too far. Even though that movie just come out when Sally met Harry, I was thinking, "My god, I'll never wear a suit again. I'm going to live in a housebo. This would be really great. Uh

great. Uh what what universe we'd be living in."

It would have been an alternate universe. But I'm still good friends

universe. But I'm still good friends with Jeff. So I got at least one good

with Jeff. So I got at least one good thing out of it. Uh, and then I was then I got serious, you know, and I was I was offered jobs to run, you know, big other big global investment banks. Uh, Hank

Greenberg who ran AIG called me up and said, "You should come join us." I was thinking, "I'm going to go from Sandy Wild to you." I mean, I had to have my head examined to do something like that.

Uh, I didn't know the AIG story.

Then, yeah. Well, that that happened years later, too. And then, um, I got a phone call from a head hunter about Bank One. And I was also, you guys, a lot of

One. And I was also, you guys, a lot of you probably know Ken Langon and Bernie Marcus and Arthur the Blank ran Home Depot. My wife, I loved them. But at my

Depot. My wife, I loved them. But at my first dinner with them, I went to see Atlanta. I said, "I have to make a

Atlanta. I said, "I have to make a confession until you guys called. I had

never been in a Home Depot."

And we were actually wondering, David and I were dating.

We were talking about New Yorker.

My friend made me go up there and get some equipment and plants and stuff like that. So, but I love their culture,

that. So, but I love their culture, their attitude. They want me to do it.

their attitude. They want me to do it.

Ken Langon says he still I still should have gotten you. I wasn't going to pay you enough. Of course, it had nothing to

you enough. Of course, it had nothing to do with anything like that. Uh and I had Bank One, but bank one was my habitat. I

was used to financial companies, you know, services, banking. It wasn't quite global. It was a little global at the

global. It was a little global at the time. Uh and you know, it was a troubled

time. Uh and you know, it was a troubled bank. And you know, I decided that, you

bank. And you know, I decided that, you know, life is what you make it. It was

hard in my family. I had a we had to move. I think for anyone who's going to

move. I think for anyone who's going to move kids that, you know, I think they were 14, 12, and 10 or something like it's hard. for some context on bank one

it's hard. for some context on bank one for for folks who are not familiar.

It's not in New York. It's a large bank, but it's a troubled bank.

Yeah.

It's based in Chicago.

Large, David. It's a It's a $30 billion market cap bank. Cityroup, where you just had been before, was a $200 Yeah.

billion dollar bank.

It was 21 billion at the time because it had you have the right numbers, but it's did a split and so if you look back, it was more like 20 20 billion or something like that. Yeah.

like that. Yeah.

And City was 200. But, you know, I didn't worry about that. I was like, you know, in life you make things what they are. I don't like complaining about

are. I don't like complaining about overspilled milk. You know, you just put

overspilled milk. You know, you just put on your pants, you get going, you see what you can make out of it. And uh

but you it sounds like you had opportunities to stay in New York to run bigger, more glamorous this when I was going to run the company. The other ones would have been

company. The other ones would have been some investment banks. I didn't really trust some of the people who were talking to me about that. And there's a whole bunch of other stuff that I explored. I took phone calls, some small

explored. I took phone calls, some small companies, some big companies. There's a

couple of subprime mortgage companies who called me and I was like, "Absolutely not." Uh,

"Absolutely not." Uh, we'll get to that. We'll get to that.

We'll get to that. And, uh, so I just thought this was a chance, you know, and, uh, you know, if the family's willing to move and we got a nice took us a while. We had lived in a rental for a while, but got a nice brownstone. And,

you know, we end up loving Chicago.

Chicago is a wonderful city in a lot of different ways. And, and, you know, like

different ways. And, and, you know, like I said, it is what you make it, you know, and I I put half my money in the stock at the time.

Yeah. You

I tied my I was going to be the captain of the ship. I was going to go down with the ship, you know, and I made it clear to everyone I was here permanently and it'll be what it is. And so I got to work like literally the next day. Did

Did we do the math right that right before you joined Bank One, you bought $60 million of stock?

I did.

I mean, I I that's I've never heard of someone taking a CEO job and saying, "I'm going to invest half my net worth in this company now."

Yeah. And I thought it was I thought it might be overvalued a little bit because there was people thought it might be sold or something like that, but I didn't care about that. You know, if you work at a company and the new CEO comes

in, he's from out of town and you're going to have a lot of shareholders and you know, I knew I knew a lot of the shareholders. I was going to know a lot

shareholders. I was going to know a lot of the shareholders. I wanted them to know I was in 100%. Lock, stock, and barrel. There was no question I would

barrel. There was no question I would never sell that stock and I'm going to go down with the ship or go up with the ship. And they also knew I was making

ship. And they also knew I was making decisions that I thought were right for long-term health of the company, not for a short term type of thing.

So, so what did you find when you got there? Day one on the job, you start

there? Day one on the job, you start investigating. Is it better, worse, the

investigating. Is it better, worse, the same than you thought?

You know, there there had been an analyst called Mike Mayo who done a report. I remember one of the great

report. I remember one of the great lines of the report. Even Hercules

couldn't fix it. It had been an amalgamation of Bank One, First Chicago, National Bank of Detroit. They had never put the companies together. So, they had multiple statement systems, processing

systems, payment systems, you know, SAP systems. Uh they had different brands, you know, services coming down. We were

losing accounts. They were closing branches. It was a mess. But, you know,

branches. It was a mess. But, you know, it was all of it. Systems, people, ops.

But again, I just, you know, I just I met the management team. I It's hard.

You know, I walked in. I met six of the directors. I There were 21 directors. 11

directors. I There were 21 directors. 11

hated the other 10.

Yeah. I mean, even wait, wait, wait.

There were 21 board members.

21 board members from the mer multiple acquisitions. They they were tribal.

acquisitions. They they were tribal.

They ended up hating each other. I knew

that when I went in because I knew one people and you know I spoke to a lot of people did research in the bank but again in life you get handed these things and it's not perfect you know even today people want to be handed

something perfect it's not perfect and I was so I met six of directors I walked in when I got offered the job I shook all their hands I told them I'm going to do the best I do I'm tell the truth the whole truth none of the truth the good the bad the ugly we're not going to

we're going to try to build a great company I'm going to need your help and uh and then they they said they left. So now I'm on the executive floor.

left. So now I'm on the executive floor.

I don't even know where to go, you know.

And so I kind of knocked on someone's door, the head of HR. I said, I do need an office and I really need an assistant. And they we're going to give

assistant. And they we're going to give me the chairman's office in the corner.

I said, "No, no, I want to be like right in the middle so I can see people." I

stick to stick my head out. Uh and then I went to meet the management team. I

went to this they put them all in this conference room, nice white plush carpets. I walked in with a cup of

carpets. I walked in with a cup of coffee and they said, "Uh, Jamie, we don't drink coffee in here for obvious reasons." So, I looked at them, I looked

reasons." So, I looked at them, I looked at the coffee, I looked at them, I said, "You do now."

And then I then I just started meeting with them all. And yeah, the systems were terrible. The company's losing

were terrible. The company's losing money. I didn't know all the businesses

money. I didn't know all the businesses really well. So, the credit card company

really well. So, the credit card company had collapsed. That's probably the

had collapsed. That's probably the business I knew the least. Uh, but

again, it didn't that didn't matter to me. I was going to try to fix it. it had

me. I was going to try to fix it. it had

some good assets and things like that.

So, I rolled up my sleeves and went to work. And

work. And one of um as when we were chatting a couple weeks ago in preparing for this um we asked you in the context of JP Morgan like what what are the critical

things in your mind that has made JP Morgan what it is today? And the first thing you said was risk and was risk and the culture around risk and the way understanding by management of risk.

Yeah. When you got to bank one, I think this is where you first started putting into practice the culture around risk. What was the risk culture at Bank

risk. What was the risk culture at Bank One and how did you change it?

Yeah, I you know, I've always been very risk conscious and risk conscious does not mean getting rid of risk. It means

properly pricing it and understanding the potential outcomes. Uh uh and so when I got there, you know, I just started meeting people and going through. I quickly realized that Bank

through. I quickly realized that Bank One had more US corporate credit risk than City Bank did. And they the way they accounted for it was unbelievably

aggressive. And you know, so they had

aggressive. And you know, so they had less capital, less reserves, less this.

They they were calling these things profitable. They were basically losing

profitable. They were basically losing money. Uh and you know, loans in little

money. Uh and you know, loans in little lot of business, you got to be very careful about the credit business. And

once I found out that I kind of panicked a little bit and I went through every single loan in the books. I marked them all down, put up more reserves, told the board uh about it and then wanted to

earn more revenues per dollar of risk.

So for example, in the middle market business, we had for every loan ni we had like 80 cents and 20 cents net interest income for the net interest income from the loan and 20

cents of other revenue like payments. By

the time we merged with JP Morgan, we had 40 NI from the loan and 60% NI NIR from other type of things like payments and one you're being paid for the risk and one you're being paid little for the

risk. And I always stress tested and I

risk. And I always stress tested and I showed the board that if we have a recession and we're about to have one, uh, how much money we lose in credit? So

I hired a woman called Linda Bamman who said, "Okay, if you're going to if you're going to let me do credit, are you going to let me sell loans?" They

said, "Yes." "Are you going to let me hedge loans?" "Yes." "Can I do 10

hedge loans?" "Yes." "Can I do 10 billion?" I said, "Yes.

billion?" I said, "Yes.

She said, "Okay, I'll join." And we probably reduced the balance sheet by 50 billion because and then we did have a recession, but we were kind of okay by then with one big bad one, which is United, which went bankrupt, and we

basically owned it for a small period of time.

There seems to be kind of a fundamental Jamie Dame Jaime Diamondism, which is don't blow up. I mean, a lot of other people have gotten decent at pricing risk, but everyone else seems to be

willing to get closer to the line than you. Where did you sort of develop this

you. Where did you sort of develop this don't blow up at all costs concept? So

there's you know around risk there's always this ecosystem you've always heard it everyone's doing it everyone's okay this is going to work this time is different and you know the history tells you learn teaches you a lot and I always

say if you listen my dad was a stock broker and so I bought my first stock when I was 14 in 1972 the stock market hit a thousand it hit a th00and in 1968

I was already helping a little bit with stuff by 1974 it was down 45% All the limousines in Wall Street were

gone. Restaurants were being closed. You

gone. Restaurants were being closed. You

know, markets move violently. And then,

you know, we had kind of a recovery in 1980. Had a recession. 82. You had a

1980. Had a recession. 82. You had a recession. In ' 82, it was lower than it

recession. In ' 82, it was lower than it had been in 1968. And it hit 800. And

then in ' 87, the market was down 25% in one day. In 1990, all these banks, JP

one day. In 1990, all these banks, JP Morgan, City, Chase, Chemical, were all taken to their knees by real estate losses. And they're all worth about a

losses. And they're all worth about a billion dollars. I met I think city was

billion dollars. I met I think city was three billion at the time and the other ones were about a billion dollars. And

then you had the 97 also real estate related thing. You had

the 2000 internet bubble, you know, and then you had the great financial crisis.

And I could if you go through history, there's tons of these things. Andrew War

Soren is in here and I just read his book. He's nice enough to send it to me

book. He's nice enough to send it to me in 1929. And man, history does rhyme.

in 1929. And man, history does rhyme.

Too much leverage, too much risk.

Everyone thinks it's going to be great.

No one thinks it can go down a lot. You

know, that stock market went down 20% one year, 30% next year, 20% the next year. At one point, it was down 90%. You

year. At one point, it was down 90%. You

know happens.

It seems like your philosophy is that the most the worst thing will happen.

So, just plan for it. Don't don't say, "Oh, we're good as long as this crazy insane, you know, four sigma event doesn't happen." You're like, "No, that

doesn't happen." You're like, "No, that will happen. It happens often."

will happen. It happens often."

Yeah. Uh so when I got when I look at it I always ask like when I do stress testing of risk for high yield the worst I remember getting to JP Morgan and going through the risk books and their

their stress test was that high yield would move 40% the credit spread that's and that time was at 400 or whatever it was that means five 560

okay and I said no our stress test is going to be worst ever worst ever was 17%. and they said that'll never happen

17%. and they said that'll never happen again. The market's more sophisticated.

again. The market's more sophisticated.

Well, in ' 08, it hit 20%. And you

couldn't have sold a bond. There was no market. So, you know, those things do

market. So, you know, those things do happen. And the point isn't that you're

happen. And the point isn't that you're trying to guess them. The point is you you can handle them. So, you continue build your business. And so, I always look what I call the fat tails and manage that we can handle all the all

the fat tails. And not the stress test the Fed gives us, but all the fat tails.

Market's down 50%, interest rates up to 8%, credit spreads back to worst ever.

Of course, your results will be worse, but you're there. And and the thing about financial services, leverage kills you. Aggressive accounting can kill you,

you. Aggressive accounting can kill you, which a lot of companies do do. Um, and

you know, the goal should be and also confidence. If you lose money as a

confidence. If you lose money as a financial company, I always knew this too. People the headlines are, you know,

too. People the headlines are, you know, people read that and if they're relying on putting their money with you, they look at that different. So I

they lose trust. they lose trust and that which caused you've seen runs on banks and you saw some recently uh because people run take their money out.

One there's a thing that you just said which is that you might do worse but you're there there's sort of this trade-off that you make where you're less profitable in the

short term but at least you stick around. If you look back at the

around. If you look back at the companies that you've run, Bewan, JP Morgan, Chase, is that true in the good years that you've actually been less profitable than those who are kind of riskone.

Yeah, a little bit. And he's saying that, you know, if you look at the history of banks from up until 2007, a lot of banks were only 30% equity. Most

of them went bankrupt. We never did that much. Okay? But in ' 08 and '09, we were

much. Okay? But in ' 08 and '09, we were fine and they weren't. And so uh but you want to build a real strong company with real margins, real clients, conservative accounting where you're not relying on

leverage. And it's very easy to use

leverage. And it's very easy to use leverage to, you know, to jack up returns in any business, you know, and but in in banking it could be particularly dangerous.

So it seems like a core part if not the entirety of this distilled into your operating strategy is the Fortress balance sheet.

Yeah.

When did you first hear about the forestress balance sheet?

I've been talking I go way back to prim.

I used to talk about that you got to be able to survive the tough times 90s.

Probably the 1990s and like I said I grew up my father and I went through those market things and I remember how hard it was on people on Wall Street. Uh

but but the fortress balance sheet is that you run a company serving clients well. You have good margins, good

well. You have good margins, good liquidity, good capital. I'm as

conservative an accountant as you can find. I don't upfront profits when I can

find. I don't upfront profits when I can spread them over time. And accounting,

you know, of course accountants hate it when I say this. You can drive a truck through accounting rules. And accounting

itself, you know that certain things are considered expenses, but they're good.

They're an investment for the future, but they're called an expense. And then

revenues, you know, if I make bad loans, they are bad revenues. They will kill you, but for a while they look pretty good. So I it's all those things.

good. So I it's all those things.

margins, clients, you know, in the banking business, the character of the clients you have will reflect in your bank. So, the first thing is who are you

bank. So, the first thing is who are you doing business with, how you doing business, and uh you know, also making sure your compensation plans aren't paying people for stuff which is stupid

or unethical. And you know, uh and you

or unethical. And you know, uh and you always have to review these things to make sure you have them right because they they change all the time.

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All right, David, catch us up to the merger. So you run bank one for four

merger. So you run bank one for four years from Chicago and then in 2004 you merge with JP Morgan Chase in what is

termed at the time a merger of equals I think JP Morgan Chase referred to it is that bank one shareholders get 42% of the combined company. I mean I think people don't realize how much of JP

Morgan Chase is bank one today. That's

why it's a little irritating to me when they say you've been running it since 07. I was running JP Morg. I was running

07. I was running JP Morg. I was running 40% of the company for the whole time.

And uh when I got to bank one and I'm not working around the clock, I I already knew that a logical strategic merger might be JP Morgan. Okay, I know all these companies and that's the other thing about Fortress balance sheet is

you also have real strategies that survive the test of time and you know you're not flipping and flopping. Um,

and then I'm sitting there and across the tape comes JP Morgan Chase to merge.

So, we're worth like 25 billion. They're

now worth like 80 billion or 90 or whatever the number was. I'm like, well, there goes that dream. But four years later, our stock was up to, you know, doubled or something like that. There's

actually come in and it was in the target range. And I'd been meeting with

target range. And I'd been meeting with Bill Harrison, the current chairman of of JP Morgan at the time. We were

talking about it. We both knew it made business sense. They were kind of

business sense. They were kind of looking for a CEO. Uh so we were we had been talking probably for a year and a half before that that they're looking for a CEO.

Did Did they give Bank One shareholders 42% because they were looking for a CEO?

There were two lawsuits. Okay. Uh so we got the premium, they got the name and the location and I I effectively had kind of control from day one because inside the merge agreement and this is

almost unheard of when we get the premium is that to not have me become CEO 18 months later 75% of the board would have to vote me out and the board

the default was you were going to become and the board was eight bank one people and eight JP Morgan people and I knew a lot of the JP Morgan board members too who had who respected me and Bill Harris

and I were very close. But that was the agreement. They got sued for paying too

agreement. They got sued for paying too much to buy me. I got sued for not taking enough.

If you get sued, you can't win these.

I think every shareholder is probably But it worked. It worked out.

Yeah. Uh all right.

uh before we get to 2006, when you're going through that process and even maybe the couple years before you and Bill were talking, you're starting to think about JP Morgan as a partner.

I'm curious, did the brand, did the name JP Morgan factor into your thinking at all? Did you view that

all? Did you view that as an asset?

I mean JP Morgan brand is a Tiffany name. I didn't value it in the deal. And

name. I didn't value it in the deal. And

what we what I looked at I had given my board I think it's I think the first thing is run your company well and people thought I was going to start doing deals immediately. I was like no we suck. We don't we haven't earned the

we suck. We don't we haven't earned the right to run someone else's company yet.

When we're running a good company we can merge with somebody and but I but the first thing I looked at was business logic and that every business we had a consumer business. They had a consumer

consumer business. They had a consumer business. We had a credit card business.

business. We had a credit card business.

They were both terrible. They had a credit card business. They had a big investment bank. We had a big US

investment bank. We had a big US corporate bank that needed some of those investment banking service. We both had a wealth management business. I was I knew we could save a lot of cost saves.

So the business logic was pretty impeccable. Then there's the ability to

impeccable. Then there's the ability to execute like can you actually get it done because you've all seen a lot of deals where they fall apart. They don't

have management. They don't consolidate the systems. They have infighting. It

kind of happened at city. Uh and so you don't effectuate and then there's the price. So I knew we had a Tiffany brand.

price. So I knew we had a Tiffany brand.

Uh, but it that it didn't value because if everything else didn't work out, I don't think it would have mattered that much.

Interesting.

All right. So, so

I'm gonna fast forward a couple years.

It's 2006. You're officially chairman and CEO of the combined JP Morgan Chase.

And 2006 on Wall Street is like go go go baby. It's like, you know, 1980s all over again.

I think you had the same incentives as everyone else, but you behaved very differently. Am I missing something? Did

differently. Am I missing something? Did

you have the same incentives or you pulled JP Morgan back hard on the risk side in 2006?

I did. So there there were cracks out there in 2006. You may remember the quants. There started to be a quant

quants. There started to be a quant problem and late in 2006. We definitely

saw subprime getting bad and that's I pulled back on subprime. I I wish I had done more because you look what I did.

You say, "Okay, well you saved half the money but you would have saved more."

You still had some losses.

Yeah. But but we also had I'm going to say less maybe a third of the leverage of the big investment banks

and a lot more liquidity. So in 2006 I started to stockpile liquidity and you know looking at the situation I was quite worried the leverage if you you may not remember this but the leverage

because of accounting rules in Basel 3 Basel one investment banks particularly the banks the big investment banks went from 12 times leverage to 35 times

leverage and and it was go for every bridge loans the whole thing like in ' 07 the bridge book of Wall Street was

400 $150 billion. Today it's 40 billion.

JP can handle the whole 40 billion today, though we're not the 40 billion today. Uh and they were much more

today. Uh and they were much more leveraged deals and a lot of them fell apart, collapsed and uh and then of course and that was before you had the collapse in the mortgage markets which really took down a lot of these banks.

But but you did have the same incentives and you had the same access to information that a lot of these other folks did, but you didn't blow up. What

explains this? Because usually behavior follows incentives.

Yeah. Well, first of all, if you work for me, I would tell you I don't care what the incentive is. Don't do the wrong thing. And and don't do the wrong

wrong thing. And and don't do the wrong thing to the client. If you treat yourself, if you're the client, how would you want to be treated? And I I had gotten rid of I mentioned that one risk thing. There were multiple risk

risk thing. There were multiple risk things like that. They were being paid to take the risk. So, you were telling us about the uh the auto loan business.

Yeah. But but they'll be being paid. But

the second I put in all these new risk controls, all of a sudden you weren't making money by taking that leverage because I was looking at how much capital can actually be deployed if things get bad. And so I was looking at

earnings through the cycle. Uh and then but very importantly all of these investment banks were doing side deals, private deals, three-year deals, five deals. I got rid of almost all of them.

deals. I got rid of almost all of them.

This is for comp senior bankers. And so

today at JP Morgan Chase, there are no, you know, we do do things, but and I know some of my partners in the room here, but we all know about it. There

are no winks, there are no nods, there are no side deals, there's almost no one paid on a particular thing because if you're paid on a particular thing, you can do the wrong thing and meanwhile not helping the company, you know, manage it

risk or something like that. So we

change the incentive programs and I'm quite conscious about incentive programs that they don't create mis, you know, misbehavior. But it's also very

misbehavior. But it's also very important. If you're in a company and

important. If you're in a company and you say the incentive program is doing that, you should tell the company this incentive plan is not incenting the right behavior versus be the the customer. And a lot of it was leverage.

customer. And a lot of it was leverage.

So you if you look at the leverage in some of these securization books and mortgage books, if you have 30 times leverage and you're getting 20% of the profits, you'll go to 40 times leverage.

It's just going to it's literally will add, you know, 25% to your bonus. And so

I got rid of the profit pool of 20% and the leverage. So

the leverage. So and I lost some people too in the meantime.

It's funny. Yeah. You know JP Morgan as part of the system had the same incentives but you changed the incentives for Yeah. pretty much

Yeah. pretty much team within the company. Okay.

All right. We got to go to 2008.

March March 13th.

2008.

Thursday 2008.

Yeah.

It's Thursday night. You get a call from Bear Stern's CEO. The stock closed that day at $57 a share. It's like 150 a

couple months before. Three days later.

God, I remember it like yesterday. I was

working on Park Avenue in Wall Street. I

remember that night. $2 a share. You're

buying Bear St. And

Tell us the story.

So, I was at AVA on 47th Street with my parents and my parents favorite restaurant. My whole family was there.

restaurant. My whole family was there.

It happened to be my birthday. Uh I I I don't normally get emergency.

Happy birthday.

Yeah. And Allan Schwarz, who was the current CEO, we'd seen their stock go down. I knew they had some real problems

down. I knew they had some real problems because we saw the hedge funds and some of the things that were taking place there. And he said, "Jamie, I need $30

there. And he said, "Jamie, I need $30 billion tonight before Asia opens to which I said, I don't know how to get $30 billion for you." And have you called Pollson? Have you called Tim

called Pollson? Have you called Tim Gener? Uh, so we all called. I called up

Gener? Uh, so we all called. I called up the management team. I went back in. I

probably had a bite and said goodbye and went back to the office. probably had a hundred people come in that day, that night. They all got dressed. They went

night. They all got dressed. They went

back to work. It's emergency. We now

rang all bells for emergency. Bear

Sterns went bankrupt. Spoke to the Fed about let's just get them to the weekend. We had one day and we needed a

weekend. We had one day and we needed a Saturday and Sunday and we concocted this loan. So, we couldn't lend the 30

this loan. So, we couldn't lend the 30 billion and the Fed technically couldn't lend the 30 billion, but the Fed can lend to us technically and I can technically use the collateral of beer

sterns. So that uh so we got the

sterns. So that uh so we got the literally a one-day loan uh and then the next day I had we had thousands of people come in due diligence and we went through every loan, every asset, every balance sheet, all the derivatives, all

the lawsuits, all the HR policies like real due diligence a two or three day period and bought the company at that night $2 a share. Hank Pollson was telling why are you paying anything for it? I said, "Well, I do have to get

it? I said, "Well, I do have to get shareholder votes." And uh which became

shareholder votes." And uh which became Do you need bare shareholders to approve?

It was a public deal. And the worst part of is I was going to get the lawsuits from the bareholders. And I knew that that you didn't pay enough for but but we couldn't let it go bankrupt.

It wasn't like an industrial company I can buy in bankruptcy. It would have been gone and the crisis would have just unfolded. So

unfolded. So what Okay, two questions.

One, what would have happened if it if it if it went down? two afterwards did you think it was over?

No. Uh so we already had So there's March. Uh you know what happened with

March. Uh you know what happened with Leman? It was an uncontrolled failure.

Leman? It was an uncontrolled failure.

There was money locked up everywhere.

People panicked. They started pulling money out of everything. That would have happened with bear. So it did stop that and I would have thought that it gave other people other time to clean up their act. So literally six months

their act. So literally six months later, I would have thought some of the other firms were much had more liquidity, more capital and were a little bit more prepared for might be happening. We already had the stress in

happening. We already had the stress in the system was you saw it already. It

was going to mount. It wasn't going to go away. There were tremendous losses

go away. There were tremendous losses coming. Uh uh so we bought it and you

coming. Uh uh so we bought it and you know probably did help in hindsight. It

didn't stop you know it didn't stop the crisis from unfolding. We bought it and then like a couple like a week later we changed to $10 a share. It had been at 120. And the way to think of it is it

120. And the way to think of it is it was 300 billion of assets. It had 12 billion book tangible book value. We

wrote off the whole tangible book value in the p when we bought the company to pay. We had to liquidate the loans. We

pay. We had to liquidate the loans. We

had a hedge stuff. We had severance costs, lawsuit costs, and we basically used all that. So we p we paid a billion dollars for a company that had been worth uh $20 billion recently. The

building we're in now was worth a billion dollars on the balance sheet for zero. And we got the fact we got some

zero. And we got the fact we got some very good people and we got some good businesses, but it was a extremely painful process. I

painful process. I I've seen estimates that in the fullness of time after really dealing with unwinding all the stuff there. It cost

you 15 to 20 billion.

Anyway, it was the it was the 12 billion we wrote off that didn't cost us. We

didn't really pay for it. And then the government sued us on the mortgages, which I was quite offended by. Uh,

and I really was I thought it was take this problem and then we'll this is this is the government when you you know the whatever government you did a deal with that's not the government down the road decides I don't care we're

going to come after you anyway. So while

we kind of saved the system a lot we bailed a lot of people out. They made us pay $5 billion on the the bad mortgages that bearish tons done. And that's what made me make the statement I wouldn't do it again. I wouldn't put it this way and

it again. I wouldn't put it this way and I don't know how to say this. I wouldn't

really trust the government again. Okay.

Would um I gota I got to ask a follow-up question to that. Um

it is that a structural thing just the way that we're set up with a new administration every four years.

Yeah. they they don't feel obligated to what the prior administration did and you know contract even some contracts were violated in this thing which I won't go through literally contracts I

mean it would have been tortous interference that had been company to company but they basically you know since you operate under their laws you know they can basically take you down so

you you know I I went see Eric Holder trying to settle this mortgage stuff which we settled I brought my lead director he expected me to come and be pounding my chest And uh and I went in

and said, "Eric, I am here to surrender. I cannot fight and I cannot win against the federal government. You know that a criminal

government. You know that a criminal indictment can sink my company. I will

not do that to my company or my country.

I'm here to surrender. Before I

surrender, I want you to know the circumstances by which we bought WAMU and Bearish Sterns because 80% of what they were asking for related to Bear Sterns and WAMU, not JP Morgan Chase."

and I went through the whole thing, you know, uh he said, "Thank you." Uh I'll take in consideration, but they never gave me the accounting, so I don't know what they did. Uh and so it is what it

is. It was quite painful. Uh but got to

is. It was quite painful. Uh but got to move on.

We'll move on from this.

We'll move on.

Well, we'll move on from the specifics.

David's like, "I do. I do have one more thing. Uh um whether you would have done

thing. Uh um whether you would have done it again wouldn't have, you know, very clear. It was not a great deal on paper

clear. It was not a great deal on paper for JP Morgan, but as we look at it now, the reputational value that JP the

reputation of JP Morgan now is unlike any other in the industry.

Part of why you're worth $800 billion is that reputation. A lot of what created

that reputation. A lot of what created that reputation was was that weekend.

Yeah. I you know, if you're Yes. And I

know I say I wouldn't trust the government. If the government called me

government. If the government called me up, they did they did it again. If they

called me again and said, "We need your help to save our country." Well, of course, I'm going to I'm a patriot that way. I just I would just try to come up

way. I just I would just try to come up with some ways to avoid the punishment by the next president.

I would come up with something.

You need You know what? You need like uh the version of the merger agreement with JP Morgan Chase where it's like a 75% of Congress needs to vote not to sue you.

Like the default is you're not gonna get sued.

All right. All right.

So, Beer Sterns happens. Six months

later, you get another phone call. WAMU

is going under. You do buy Wamu.

Contrary to everything we're talking about with Bearer, Wamu is actually a great acquisition, right?

Yeah. So, this is a lesson about acquisitions. It's very hard. Remember,

acquisitions. It's very hard. Remember,

we bought WAMU a week after Leman went bankrupt and and most boards wouldn't have touched that at all because the whole system feels the whole system was in trouble. But

WAMU put us in California, uh, parts of Nevada, Arizona, not Arizona, Georgia, Florida, which we weren't in. So, think

of these really healthy states. Uh, and

they had, you know, 2,300 branches. They

were and they h they had huge mortgage problems. But we had looked at it over and over and over. So, we knew their mortgage books called. And we wrote off, we bought it for

And this was all before, we bought it for a $30 billion discount to tangible book value because they had debt and we left the debt behind. And so, and that 30 billion

debt behind. And so, and that 30 billion was approximately what the Moors loss was going to be. So, we bought the company, think if you bought a company clean, we wrote off all that stuff. The

books were clean. And then we did something unheard of, too. the next day or two days later, I went in the market, raised another 11 billion dollars of equity, which I didn't really need, but

again, this is my conservatism. Uh I was like, you know what, this can get even worse and and I don't want to be short capital liquidity. So, we, you know, we

capital liquidity. So, we, you know, we raised that to make sure our balance sheet was just as strong as it was after WAMU that it was before WAMU.

And you already had the reputation to pull this off, right? I I I'm imagining in the worst month of the financial crisis, who can go out and raise 11 billion dollars of equity?

Yeah, it was Yeah, people people trust you.

Well, yeah, we knew a lot of the shareholders and you earned your trust over time with shareholders and, you know, we explained we we gave them a quick little presentation over the, you know, uh uh Yeah. And a lot of them

stepped up and said, "This is great."

Um, we also know we can execute it because we're behind the bear sterns.

People forget the work is the next day you got 50,000 people consolidating, you know, 5,000 applications, branches, compensation programs, uh, you know,

settlement programs, you know, payment systems. It's a lot of work, but we obviously have the capability to do that and we have the capability to do WAMU. I

think we finished the WAMU consolidations in nine months, all of them. So that within nine months they

them. So that within nine months they were all in the same systems which allows you to start doing a better job in customer service uh and things like that.

So this fortress balance sheet strategy and raising this equity capital and you know having additional margin of safety and conservative accounting in retrospect it seems like the obvious

right strategy for running a large financial institution. Why wasn't

financial institution. Why wasn't everyone else copying it? H have people changed and does everyone else run their banks like this now? I think people the people are more conservative today. I

think regulars are more conservative today. But again, I go back to people

today. But again, I go back to people get involved in aggressive accounting.

Uh they don't look at stressing their own bank in a real way. Uh you know, you saw people take too much interest rate risk, too much credit exposure, too much optionality risk and and or or sometimes

it's new products. So if you look at the financial services, very often it's the new products that blow up. It takes a while. They haven't been through a

while. They haven't been through a cycle. And you you had that with

cycle. And you you had that with equities way back in 1929. You had it with options. You had it with equity

with options. You had it with equity derivatives. You had it with mortgages.

derivatives. You had it with mortgages.

You had it with G. Even Jinny Mays at one point blew up even though they're government guaranteed.

Arguably, you had it with quant and with LT.

Quant, it happened with leverage lending. And then people then become

lending. And then people then become more rational how they run these balance sheets, how they think through the risk.

So, so I have to ask you, is this private credit today?

Say it again.

Is this private credit today? I I don't really think so. I I don't think it's $2 trillion. It's grown rapidly. That's an

trillion. It's grown rapidly. That's an

issue. But what happens the other thing about Mark is there's some very good actors in it who know what they're doing. Customers like the product. So I

doing. Customers like the product. So I

always say, well, the customers like it and but there also people who don't know what they're doing and it's grown rapidly. So there it may there may be

rapidly. So there it may there may be something in there will become a problem one day. I don't think it's systemic. So

one day. I don't think it's systemic. So

that two trillion the mortgage market when the time it blew up was I'm going to say$9 trillion and a trillion dollars was lost. This is you know and it was

was lost. This is you know and it was trillion dollars was also highly more than a trillion dollar back then.

Yeah. A lot of these private a lot of these private credits are not leveraged like that but doesn't mean there won't be problems but it's it's slightly different but we you got but you look at the whole system there are other things out there that you know are leveraged

that you know can cause problems and of course people take secret leverage in ways you don't necessarily see it. What

what are some of these in your mind that are potentially problematic today?

Well, I look I I look at when you look at asset price, they're rather high.

Now, I'm not saying that's bad, but if we if if today pees were 15 as opposed to 23, I say that's a lot less risk, a lot less to fall and you have some

upside. I would say at 23 there's not a

upside. I would say at 23 there's not a lot of upside and there's a long way to fall. And that's true with credit

fall. And that's true with credit spread. So I and we look at we stress

spread. So I and we look at we stress test everything. We do like 100 stress

test everything. We do like 100 stress tests a week, you know, and to make sure we can handle a wide variety of things.

And then the other thing and the biggest risk to me is cyber. I mean, I I think this cyber stuff is, you know, we we're very good at it. We work with all the government agencies. They would say that

government agencies. They would say that Jmore, we spend $800 million a year or something on it. We educate people on it. We just do. But it is you're talking

it. We just do. But it is you're talking about grids and communications companies and water uh uh and even part of the military establishment. The the

military establishment. The the protections are not what you need uh if we ever get any kind of war where cyber is involved and China is very good at it and so is Russia. But Russia is mostly

criminal which is slightly different.

All right, I'm going to pull us back to the story. We're going to fast forward

the story. We're going to fast forward to 2023.

We're not really equipped to talk about Yeah. Russia.

Yeah. Russia.

Uh it's not what we do on acquired but but thank um Silicon Valley Bank.

Yeah.

And First Republic both fail. You're

there again. Did you see it coming? What

lessons did you learn from how 2008 went that you could apply in 2023? Obviously

you bought First Republic.

So Silicon Valley Bank, you know, they both Silicon Valley Bank for did some very good stuff, but they they both had something something unique that we didn't know at the time. I'm going to call them concentrated deposits, not

uninsured because people have misstating that concentrated. And so a lot of

that concentrated. And so a lot of venture capital, what happened with Silicon Valley Bank and kind of First Republic is some of these large venture capital companies, call them there hundreds of them, maybe

a thousand, told their constituent clients that they invested in who all bankked in Silicon Valley and First Republic, the banks aren't safe, get out. And they all removed their

out. And they all removed their deposits. And Silicon Valley Bank, I

deposits. And Silicon Valley Bank, I think they had 200 billion deposits, 200 billion, 100 billion in one day.

And that caused the problem. But they

also had other problems. They didn't have proper liquidity. Uh they didn't have their collateral post at the Fed and they had taken too much interest rate exposure. And the interest rate

rate exposure. And the interest rate exposure was hidden by accounting. It

was called held to maturity where you don't have to mark even treasuries to market. And I always hated held to

market. And I always hated held to maturity because uh but it gives you better regulatory returns and stuff like that. But when that held to maturity the

that. But when that held to maturity the t if you said what's the tangible book value of one of these banks and you said it was 100. Well, all of a sudden it was 50 if you just marked that one thing to market and and there's now here now

you're into judgment land. At what point if you saw a bank where just that one mark had the tangible book value dropped to 40 or 30 cents to the dollar would you panic? I would have said that's too

you panic? I would have said that's too much risk and you know the regulators helped us because they said rates are going to stay low forever. So these

banks bought a lot of 3% mortgages and when you know 3% mortgage when rates went up to 5% you know worth 60 cents on the dollar or 50 cents and that was it.

And so both those had they took too much interest exposure known to management and it was known to the regulators and you know uh and fixable. So you know we we knew about a little bit about Silicon

Valley Bank. We were trying to compete

Valley Bank. We were trying to compete in that area. So we learned a lot afterwards about how to do a better job for that ecosystem of venture capital.

We have a whole campus in Palo Alto now.

We've hired 500 innovation bankers. We

cover venture capital companies. We're

not as good as they are yet. We're we're

going to get there because we're we're organized slightly differently. And we

knew First Republic. We were watching it. I had called Janet Yellen that I

it. I had called Janet Yellen that I said that that company's in trouble and one or two others. If you want to, we'll take a look. We could probably buy it and eliminate the problem. They waited a little bit too long. It was kind of a

little melting ice cube. Uh but you could imagine the day we bought it, you never heard about it again. We hedged

all their exposures in a couple of days and you know we merged everything in. We

wrote everything down and but we did get some good stuff from we actually got some good people. You know the normal thing in acquisition is they're terrible get rid of them or they failed but we also looked at what they did how they

dealt with clients maybe clients here.

They did a great job with high net worth clients single point of contact you know conscious services. So now if you go

conscious services. So now if you go down Madison Avenue you see things called JP Morgan Financial Center.

That's your first JP Morgan branded consumer effort, right?

Because it's it's kind of based on that.

Then when you walk in there, we know your small business, we know your mortgage, we know your consumer banking, uh we can get you travel, we can do a whole bunch of different stuff. So very

high level uh services. I think we have 20 of them now. But I'd love it. And if

it works, you know, in 20 years, we have 300. And so these things are

300. And so these things are opportunities and I hope it works. You

know, you don't always know they're going to work for a fact. But but so far so good.

All right, listeners. Now it is time to talk about one of our favorite companies Statsig.

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They have a generous free tier and a $50,000 startup program. Just remember

to tell them that Ben and David sent you. All right. So, we're we're

you. All right. So, we're we're effectively caught up to today. And if

we're trying to and now we've got the whole story. We got a lot of context.

whole story. We got a lot of context.

Obviously, let didn't go into every detail, but if we're now trying to answer Yes. If we're now trying to

answer Yes. If we're now trying to answer the question, how did you separate from the pack? Why did you become a completely different animal than your whole competitive set? What

are the things in your mind that led to this success?

Well, I look I I mean I don't I don't know to first of all you because we skipped over strategy a little bit and this is important for you all that we we have what we do is the same thing that a community bank does other than

investment bank global investment banking. Okay. So if you walk into a

banking. Okay. So if you walk into a small community bank they know your business account. They know your

business account. They know your consumer account. They usually have a

consumer account. They usually have a trust company. They used to they used to

trust company. They used to they used to call it trust. They'd manage your private affairs. They'd set up a trust

private affairs. They'd set up a trust for you and they do stuff like that. and

their CRM is up here. They don't need a Salesforce CRM because they know everyone in town and they didn't do big-time global investment banking, but the strategy those businesses fit

together. They feed each other and so

together. They feed each other and so does investment banking. A lot of our middle market clients use investment banking products. A lot of our consumer

banking products. A lot of our consumer clients use some FX. So, all of our businesses feed each other. There's no

extraneous. We got rid of everything that didn't fit a strategy. And then you start building client businesses and client services, fortress balance sheet, fortress accounting, all those various

things. And and you know I and I've

things. And and you know I and I've always talked about so it's it's it's holding a portfolio of things that actually feed each other.

They actually fit whereas you know city had consumer consumer finance that didn't fit. Life insurance that didn't

didn't fit. Life insurance that didn't fit property that didn't they eventually got rid of them all. Sandy just wanted to do more of them. You know he bought American General which did uh truck leasing for God's sake. I mean and you

once you get involved these things it's hard for people to understand the risk in each one of these businesses when but all of ours fit. I don't like hobbies. I

don't like things you know we made and we've made plenty of mistakes because you you have to try and test things and then you're always investing for the future. that investment is always

future. that investment is always people, branches and technology. And

that's true whether they're investment banking people or consumer bank people or opening consumer branches or I think Doug Doug Pen is here and Troy Roarback who run the global investment bank but

they've opened you know commercial banking branches all over Europe and I think you're telling me I mean it's it's it's going great you know and it's feeding all other parts of the company.

So just sticking to your knitting, constantly investing, you know, not overreacting to the market. You know,

markets are like accordians. And then

sometimes, you know, it's a if you're strong when others aren't, you have a chance to buy things you want to buy.

And then always look at the world from the point of view of the consumer. What

do you want? How do you want it? How do

you want to get it? Can we provide it to you? Uh uh in a way that makes sense for

you? Uh uh in a way that makes sense for us too. You know, not going for the last

us too. You know, not going for the last dollar and not nothing like that. And so

uh and building teams of people. You

know, our people are curious and smart.

They have heart. They have soul. They

give a damn about uh you know the guards in the company and the receptionists and the you know it's not just about the big- time bankers and people pounding their chest. You know we don't try not

their chest. You know we don't try not to put up with that. And we have big-time bankers. They are exceptional

big-time bankers. They are exceptional you know and uh but the company you know serves the clients and we have uh and I think the clients know that. When when

you really dig in to start analyzing JP Morgan's financials, you kind of see this one thing that jumps right out at you, which is the efficiency ratio. For

every dollar that you make compared to your competitors, you get to keep 15 cents more of that dollar as profit.

It's not hard to see how that compounds and how that allows reinvestments. And

why is your efficiency ratio so much better than competitors? It's it is literally continuously investing and gaining business at the margin and not

stopping and not stop starting and the thing is the thing about margins too is that we we have that margin while investing a lot. It's much easier to have that margin and just you know we can cut billions of dollars of marketing

out tomorrow. We can stop opening

out tomorrow. We can stop opening branches and save a billion dollars next year. We can do a lot of things. Your

year. We can do a lot of things. Your

margins will go up, your growth will go down. Your long-term margins will

down. Your long-term margins will probably get worse. Uh so we kind of look right through the cycle and we look at the actual economics of we do not the accounting of what we do. Uh and you know we have you know we've built it

over time. You know we have great people

over time. You know we have great people and great products and there there's some secret sauce I'm not going to tell you about. We do investor day and we

you about. We do investor day and we tell everyone everything and I'm sitting there watching my I never do presentations. I'm watching them do the

presentations. I'm watching them do the presentations. I'm saying oh god we're

presentations. I'm saying oh god we're just giving away too many secrets here.

But but so there's secrets as to why the efficiency rat you know I saw Howard Schultz here before you know and I'm not supposed to say that probably um it's okay it's okay

but no but you look what he built over the years you know the consistency the curiosity the heart the you know branch by branch products it's just always doing that knowing you're going to make

mistakes but building the culture that just kind of plows through that and you all know I I do use sports is a great analogy if you have a a sport team with a bunch of real jerks on it, are they

going to be a great team?

Almost never. You know, if a if the team members aren't giving it their their best every day during practice, you look at Tom Brady, every day at practice, you worked hard. You know, if people are not

worked hard. You know, if people are not giving their best, how you're going to have a great team. And it's not that different in business. The difference in business, you can BS about it all the time. You can make up stories. But in

time. You can make up stories. But in

sports, you see it, you know, on the playing field that do they have the team? Do they play together? They don't

team? Do they play together? They don't

even have to be friends. They have to practice, know their teams. And so I do think companies have that. It's like a sauce that works. And you've seen it lots of different companies, you know, not just JP Morgan Chase.

Yeah. So, all right. We've got one last question for you. Uh if you look back to 2008, which was a long time ago now, to 200 when

to 2008, which was a long time ago now, all of the other leaders that were involved in that era have long since retired. I mean, I think many folks

retired. I mean, I think many folks within JP Morgan Chase have long since retired since then.

It seems like you're working as hard as ever. Yeah.

ever. Yeah.

And in it as much as ever.

Why are you still here? What keeps you going? Yeah. Uh, so I want to thank my

going? Yeah. Uh, so I want to thank my wife who's here too who suffered through all this with me all these years and probably couldn't have done it. Couldn't

have done it without her. Uh,

I don't look I I I don't know. But I do believe my my grandparents are all Greek immigrants.

There we go.

My grandparents all Greek immigrants who didn't finish high school. Uh, but

there's a Greek ethic, you know, which I and you don't even realize you learn it from your parents, you know, from the ground up. And Judy's parents, my wife's

ground up. And Judy's parents, my wife's parents were the same, which is, you know, have a purpose, you know, have and that it could be art, it could be science, it could be military, it could be business, it could be it could it

could be just being a great parent, a great teacher, you know, but have a purpose and then do the best you can, you know, give it give it your all.

Don't like be one of those people who's complain all the time, you know, you give it your best and uh and then treat everyone properly. everyone, you know,

everyone properly. everyone, you know, like I if I and including like if there's a bully beating up on someone, you had to stand up to someone, you were not allowed to allow a bully to do it.

So how you treat people what you do and so in in my hierarchy of life, the most important thing is my family uh still is. The second thing is my country

is. The second thing is my country because I think this country is the indispensable nation that brought freedom of speech, freedom of religion, freedom of enterprise uh which we have to teach everywhere we

go about how important it is because I don't think people fully understand it sometimes. And then my purpose because

sometimes. And then my purpose because you know they my feelings don't want me home every day and this is this is my contribution through this company. I can

help cities, states, schools, companies, employees, and I I get the biggest kick out of that. And so, uh, that's what I do. And as long as I have the energy,

do. And as long as I have the energy, I'm going to do it. I can't imag I'm not I don't play golf. You know, my daughter, one of my daughters said, "Dad, you need some hobbies." And I

said, "I do. We hanging out with you, family travel, barbecuing, wine. We now

like whisies. And I love read. I love

history. I think history is the greatest teacher of all time. Hiking. I can't

play tennis anymore because my back, but those are my hobbies. I don't buy fancy cars and stuff like that, but this gives me purpose in life beyond family and beyond country. Plus, I think this helps

beyond country. Plus, I think this helps the country. You know, I get to do a lot

the country. You know, I get to do a lot of things for our country uh that I just think are quite meaningful from this job. And so, when I'm done with this, I

job. And so, when I'm done with this, I don't know, I'll teach and write. I may

write a book like Andrew Russin did. Uh

I'll do something, but I got to do something. And I'm not going to twiddle

something. And I'm not going to twiddle my thumbs and smell the flowers. Um

there are a lot of people who have floated your name for uh political or policy roles over the years. It is hard there is only one job that could possibly impact the country in a bigger

scale than you're currently doing. Do

you agree right now? Yeah.

right now? Yeah.

[Applause] Well, that's probably a great place to leave.

Jamie, thank you so much for joining us.

David, Ben, these guys are great, by the way. So, thank you.

way. So, thank you.

Well, that is it for our conversation with Jamie Diamond. Listeners, thank you so much to all 6,000 of you who came to watch in person. Was so cool.

So cool. Well, we have some thank yous.

First to our partners this season. JP

Morgan, an incredible partner to us here at Acquired. Statsig, the best way to do

at Acquired. Statsig, the best way to do experimentation and more as a product development team, Verscell, your complete platform for web development, and Anthropic, the makers of Claude. You

can click the links in the show notes to learn more about each of them. As

always, a huge thank you to Arvin Navaratnam at Worldly Partners for his excellent write up on the Jaime Diamond years of JP Morgan, which is linked in the show notes. If you like this episode, go check out other recent

episodes like the start of our Google series, which is off to a screaming start. Our Rolex episode, which is

start. Our Rolex episode, which is another one of our biggest ever, and then our interviews, Steve Balmer, Mark Zuckerberg, Howard Schultz. If you're

new to the show, I think all of those are great places to start. After this

episode, if you are still looking for more and you're like, I've already listened to all of those other episodes, we have a second show for you. ACQ2. The

most recent is an episode with Jesse Cole, the founder and the CEO. Founder

and owner.

Owner. Yeah.

Yeah. He wears a lot of hats. All of

them are yellow. At the Savannah Bananas for something completely different.

Yes. And if you want to talk about this with the acquired community, come join the Slack acquired.fm/slack.

And with that, listeners, we'll see you next time.

We'll see you next time.

Who got the truth?

Is it you? Is it you? Is it you? Who got

the truth now? Huh?

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