Jamie Dimon was fired on a Sunday from the bank he had helped build. The board had already voted, and the press release was ready.
Ten years later, that same bank needed a rescue, and Dimon was on the other side of the phone, running JPMorgan Chase.
On March 13, 2008, he was turning 52 and having dinner with his family at a Greek restaurant in New York when he received a call. Bear Stearns, then the fifth-largest investment bank in the United States, was running out of liquidity. If no solution appeared before markets opened on Monday, the problem could quickly spread through the rest of the financial system.
Dimon left dinner and went to work.
Over the next 48 hours, he negotiated the acquisition of Bear Stearns by JPMorgan together with Treasury Secretary Hank Paulson and Tim Geithner, then president of the Federal Reserve Bank of New York.
The first offer was $2 per share. A year earlier, the same shares had traded at around $170.
That everything began that night in a Greek restaurant carries a family coincidence. Dimon’s grandfather had arrived in the United States with the surname Papademetriou and little else. He shortened it after settling in the country, started out working as a waiter and eventually became a stockbroker at Shearson.
In the Dimon household, talking about finance was fairly normal. Jamie was 14 when he started reading Security Analysis, the book Warren Buffett had studied decades earlier.
A Letter That Did Not Help
Dimon wanted to attend Brown.
He did not get in.
One version of the story attributes part of the rejection to an unfavorable recommendation letter written by his school’s deputy head. It described three traits: he was stubborn, had problems with authority and tended to judge too quickly.
He ended up studying at Tufts, near Boston.
There, he wrote a paper about a financial transaction designed by Sandy Weill, an executive who had started as a messenger on Wall Street and had already become an important figure in American finance.
Dimon’s mother managed to get the paper to Weill.
He liked it.
Soon afterward, he offered Jamie a summer job.
Dimon later attended Harvard Business School and graduated in the top 5% of his class. When he finished, at 25, he received offers from Goldman Sachs, Morgan Stanley and Lehman Brothers.
He turned down all three.
Instead, he chose to work as Weill’s assistant. The salary was not what interested him most. He wanted to be close to the person making the decisions.
Fifteen Years With Sandy Weill
Over the following years, Weill and Dimon took part in a long series of acquisitions that eventually created one of the largest financial groups in the United States.
They began in 1986 with Commercial Credit, a Baltimore consumer-finance company. Then came Primerica, Smith Barney, Shearson and Travelers.
In 1998, Travelers merged with Citicorp to create Citigroup.
Dimon was 42 and president of the new company.
That same year, everything ended.
In November, he was at his apartment interviewing candidates when he was called into the office. Weill and John Reed, the group’s other co-chairman, were waiting.
They first discussed organizational changes. Soon afterward, they asked him to resign.
The board had made the decision that morning.
The press release was already written.
Dimon had worked with Weill for fifteen years.
He signed his departure papers that same afternoon.
Months later, when Fortune asked how he had experienced the blow, he said it had affected his net worth, but not his self-esteem.
During the following year and a half, he received several offers, including one to work with Jeff Bezos at Amazon and another from Home Depot.
He accepted none of them.
He took up boxing, read biographies of Abraham Lincoln, Winston Churchill and other leaders who had endured major defeats and, over time, invited Weill himself to lunch.
He wanted to repair the relationship with the man who had fired him.
Coming Back From Chicago
In March 2000, a much less attractive opportunity appeared.
Bank One was in crisis. The Chicago-based bank was posting losses, and its shares had fallen more than 40%.
Dimon agreed to take over.
He also invested a significant amount of his own money in the company’s shares.
He began going through the bank and reviewing operations one by one. He closed branches that were losing money, cut costs and reorganized several areas.
Three years later, Bank One reported record profits.
In 2004, JPMorgan Chase acquired the company for around $58 billion. The deal was structured so that Dimon would eventually take the top executive position.
He became CEO in 2005. Soon afterward, he also became chairman.
Three years later, the financial crisis arrived.
First came Bear Stearns. Then, in September, Lehman Brothers collapsed. Merrill Lynch was sold in an emergency deal to Bank of America. AIG required more than $180 billion in government support.
Washington Mutual also failed, and JPMorgan bought it for around $1.9 billion.
Citigroup, the company Dimon had helped build before being fired, received more than $45 billion in government assistance and federal guarantees covering hundreds of billions of dollars in assets.
JPMorgan also went through the crisis, but entered it in a much stronger position than many of its competitors.
Dimon had maintained more capital than regulators required and had avoided some of the riskiest transactions that had become common on Wall Street.
Among them were synthetic CDOs, widely used across the industry in 2006.
While other banks reduced oversight of those risks, Dimon demanded information much more frequently. Those who later studied JPMorgan’s management during those years noted that he received risk reports daily, not quarterly.
He Still Says What He Thinks
Almost two decades later, Dimon remains at the head of JPMorgan.
The bank manages around $4.9 trillion in assets, and at 70 he continues to speak unusually freely about subjects many executives prefer to avoid.
In a recent podcast, he said markets were underestimating certain geopolitical and fiscal risks, from wars to rising military spending at a time of large deficits.
He also explained what he would do with his own money: today, he would not buy U.S. equities or long-term Treasury bonds.
At the same time, JPMorgan launched an initiative tied to what Dimon calls the “American Dream,” including financing for small businesses and programs related to housing and healthcare.
His view is that social mobility in the United States has deteriorated and that the country is finding it increasingly difficult to make major changes.
That does not stop him from remaining deeply involved in Wall Street.
When SpaceX went public, Dimon appeared before thousands of JPMorgan high-net-worth clients to discuss the deal, even though his bank was not leading it.
The gesture attracted attention even within the market. Bloomberg noted that it was unusual to see a CEO at his level become personally involved in that way.
Decades after that school recommendation letter, some things do not seem to have changed much.
Dimon is still stubborn, still clashes with authority when he believes it is necessary and still has a reputation for making decisions quickly.
At 17, those traits did not help him get into Brown.
At 52, when the phone rang during that birthday dinner, they were part of the reason Washington decided to call him.
