Wall Street found its voice today, after months of stewing in silence as pundits and politicians pelted the financial industry with withering criticism, punitive salary caps and pious second-guessing.
We’ve been waiting for someone prominent on the Street to “grow some” and counterpunch with the necessary response: Yes, Wall Street blew it—but now you Washington demogogues are in danger of making things even worse.
Finally, the Lion of Wall Street has roared: Jamie Dimon, chief executive of J.P. Morgan Chase , said that and more in a speech to the U.S. Chamber of Commerce during Power Lunch today. (Watch the entire video here)
Dimon lamented the orgy of “constant vilification” of corporate America now underway in Washington. “I would ask a lot of people in government to stop doing it,” he declared. “Some of the same people I hear vilified constantly worked around the clock” in a “Herculean effort” to rescue Bear Stearns and other sinking ships, he told his audience.
He also pointedly noted that when JPM accepted money it didn’t need in the federal TARP bailout program, he didn’t know “all these things would be added to it.”
By that, Dimon means the salary caps that now force a haircut on the 25 biggest earners at any bank taking taxpayer funds. And, no doubt, all the handwringing and fingerwagging in Congress over private jets and golf sponsorships and such; and perhaps such tributary effects as New York state Attorney General Andrew Cuomo’s obsession with bonuses and office decorations at Merrill Lynch.
“Somebody does need to stand up and say it, but everyone’s been running scared,” says one senior executive on the Street. “You don’t see John Mack doing it, or Lloyd Blankfein.” Mack is chief executive of Morgan Stanley , Blankfein runs Goldman Sachs . But then, those two firms needed the taxpayer capital: “They would have gone out of business without it,” this exec argues.
Dimon “finally hit back at the political class,” adds Jerry Boyer, a CNBC contributor and syndicated columnist. “Demonizing business won’t help.”
I talked to Jamie Dimon, ever so fleetingly, by cell phone half an hour after his speech ended and asked whether he had intended his comments to be what they really are: a clarion call in Wall Street’s defense and an exhortation for Washington to stop bashing and unite to cure these ills.
“Not really,” Dimon said simply, “although I knew I was saying something” that might spark some reaction. (He also affirmed that, akin to what Citigroup had said for its part yesterday, JPM also was profitable in January and February. This helped prompt a rally in JPM shares, which closed at $20.40, up 4.6 percent and continued to rise in after-hours trading.)
Dimon, who veered widely and frequently from his speech script, had some other pearls for regulators and elected officials:
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--“We like mark-to-market accounting, there’s nothing wrong with that.” But, “we’ve taken it to a ridiculous point.”
--“It’s time we learned to stop letting real estate bring us to our knees.”
--And this: “There is a silver bullet” for fixing this: the combined and communal efforts of Wall Street players, Democrats and Republicans, Congress and the White House, and the Fed and the Treasury all working together.
Do that and this crisis heals by the end of this year, Dimon says. Continue the carping and recriminations and this horrible downturn will endure for several years, he warns.
Dimon also revealed that he had sent a personal note to Hank Paulson, praising the former Goldman chief and much-maligned Treasury secretary who presided over the first response to the financial collapse for months before the arrival of new Obama appointee Timothy Geithner.
The note quoted President Roosevelt: “It is not the critic who counts, not the man who points out how the strong man stumbled . . . The credit belongs to the man (or woman, Dimon added) who is actually in the arena; whose face is marred by dirt and sweat and blood . . . his place shall never be with those cold and timid souls who know neither victory nor defeat.”
Both political parties heaped harsh criticism on Secretary Paulson for pumping taxpayer money directly into the banks’ balance sheets when he first had vowed to buy toxic assets. But Jamie Dimon clearly feels Paulson and his staffers deserve an apology: “I really do thank them for what they did.”
That kind of statesmanship is why some folks feel Jamie Dimon would have made a great Treasury secretary. Instead we got the well-intended but struggling Tim Geithner, a government veteran rather than a seasoned Wall Street hand who may be the first Treasury chief to get satirized on “Saturday Night Live.”
Dimon, says Jeffrey Sonnenfeld of the Yale University business school, “is our era’s Alexander Hamilton, Andrew Mellon, Henry Morganthau—and, of course, J.P. Morgan.”
Amen, brother.