Ben Chu: What a wonderful world the magnificent Jamie Dimon inhabits


Davos Outlook Some things at Davos never change. The snow is heaped in thick slices on the gabled roofs. Audis with tinted windows prowl up and down the Promenade. Delegates are given goody bags filled with useless tat. And Jamie Dimon, the boss of JP Morgan, stands up, belligerently, for the banks.

Some wondered whether, on that last count at least, things might be different this year. After all, 2012 was the year the crown slipped from the head of the man once known as the King of Wall Street. Twelve months ago rumours began to spread that a JP Morgan trader operating out of the City of London – whom hedge funds had dubbed "the London Whale" on account of his colossal appetite for the dodgy end of their derivative trades – had racked up large losses.

Mr Dimon, in his brusque manner, rubbished the rumours, and inferred that anyone minded to believe them was an idiot. But it turned out that the warnings were right and Mr Dimon was wrong. Desperately wrong. And he was forced to admit as much last May. The final bill for unwinding the Whale's disastrous trading book came in at $6bn (£3.8bn).

So time for some humility from Mr Dimon this year at Davos? Time for a recognition, perhaps, that he doesn't, in fact, have all the answers, and that the regulators might have a point when they say that banks like JP Morgan are too big and too complex for a mere mortal to manage?

No chance. Yes, Mr Dimon repeated his apology to JP Morgan shareholders for the Whale losses. But before the audience could draw breath he launched into a vicious assault on regulators and commentators for spreading "misinformation" about his bank.

He had an answer to everything. Challenged by the hedge fund manager Paul Singer about the opacity of JP Morgan's published accounts, he shot back: "Hedge funds are pretty opaque, too." Yes, but hedge funds, unlike global megabanks like JP Morgan, didn't pose a systemic threat to the global economy in 2008. Neither did JP Morgan, responded Mr Dimon. His bank was forced to take capital from the US government for the sake of the system, not because it actually needed it. But don't investors need to know what's going on under the hood of big banks in more detail? "You don't know how aircraft engines work either," was Mr Dimon's glib response.

He had come not to apologise but to give us all an introductory lesson in economics and finance. "If you're in a barter economy, there are no financial assets. Once a society starts to save, there are financial assets, and you want there to be financial assets." Yes, but no one is suggesting abolishing financial assets, merely arguing that it is unsafe for a single organisation to cram $2.36 trillion of them on to its balance sheet, as JP Morgan does. "He's never going to change," sighed one long-time Davos attendee after witnessing Mr Dimon's performance. You can say that again.

"A pessimist is an optimist with experience," Mr Dimon quipped in response to one question from the floor. But that's just the point. Mr Dimon seems incapable of learning from experience. Even a $6bn trading loss only reinforces his existing world view, a world in which the critics and regulators are always wrong and Jamie the magnificent is always right. What a wonderful world that must be.

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