Jamie Dimon is known for being a top-notch risk manager, and apologizer.
Thursday, the latter role prevailed, as he took the bullet on J.P. Morgan’s big loss on the so-called London Whale trades.
Here are the notable quotes from Dimon’s performance Thursday night.
First, here’s what he said April 13 –“It’s a complete tempest in a teapot. Every bank has a major portfolio. In those portfolios, you make investments that you think are wise, that offset your exposures. Obviously it’s a big portfolio, we’re a large company, and we try to run it – it’s sophisticated, obviously with complex things, but at the end of the day, that’s our job is to invest that portfolio wisely and intelligently over a long period of time to earn income and to offset other exposures we have.”
Then he describes it like this today – “In hindsight, the new strategy was flawed, complex, poorly reviewed, poorly executed and poorly monitored. The portfolio has proven to be riskier, more volatile and less effective than economic hedge than we thought.”
Read this as someone is probably getting fired – “In addition, you should know that all appropriate corrective actions will be taken, as necessary, in the future.”
Won’t happen again … – “So, number one, we’re going to manage it to maximize the economic value for shareholders. What does that mean? It means that we’re not going to do something stupid.”
Except if it does – “Speaking for the Senior Management team and myself, while we can’t assure you we won’t mistakes, we will – we can assure you we are going to try not to. These were egregious mistakes, they were self inflicted, we were accountable and we happened to violate our own standards and principles by how we want to operate the company. This is not how we want to run a business.”
To Bank of America analyst Guy Moszkowski, who Dimon apparently met with this week – “I apologize. When you were here, I knew you were here and I didn’t have – obviously I couldn’t tell you about this and, of course, I feel terrible about that.” (Moszkowski said on the call it was okay.)
On the Volcker rule implications – “We do believe we need to have the ability to hedge in a CIO type position and that Volcker allows that. This trading may not violate the Volcker rule but it violates the Dimon Principle.”
On press coverage of the London Whale before today – “I also think we acted a little too defensively to that.”
On things he should have paid attention to in hindsight – “Trading losses … newspapers…some other stuff.”
On other banks – “I don’t know just because we are stupid doesn’t mean everybody else was. I have no idea what the people are doing.”