You just can’t make this stuff up.
So JPMorgan Chase CEO Jamie Dimon is participating in an investor conference call. This is the semi-regular ritual where a financial executive throws out some already heavily-airbrushed numbers for a select group of financial analysts and then proceeds, over the course of an extended conference call, to further verbally airbrush the already-airbrushed company data. Some of the analysts in these calls mostly toss softballs at the bankers, but some of them have a reputation of throwing the occasional brushback pitch, injecting unwanted or uncomfortable questions into the otherwise well-protected narcissistic bubbles in which these CEOs mostly always live
Not that I know the guy, but Mike Mayo of Credit Agricole is supposedly one of those analysts that people in the industry dislike. “Kind of a dick,” is how one friend of mine described him – but in an admiring way, if that makes sense.
So Mayo is on this call with Dimon and he asks him a question about capital ratios, i.e. the amount of actual capital a bank has on hand as opposed to debts and liabilities. He notes that the Swiss bank UBS (which just settled in the LIBOR case, but never mind that for the moment) is saying in presentations that because it has more actual capital on hand than certain other banks – like, say, Chase? – customers should feel safer with them.
Mayo then asks Dimon if he agrees with the notion that customers should feel safer with banks that have higher capital ratios:
MAYO: I think when I hear UBS saying in a presentation, if I’m an affluent customer, I’ll feel a lot more comfortable going to a big bank with a 13 percent capital ration than to a bank with a 10 percent capital ratio, do you agree with that, or disagree?
DIMON: So you would go to UBS and not JP Morgan Chase?
MAYO: I didn’t say that – that’s their argument.
DIMON: That’s why I’m richer than you.
This exchange is priceless on many levels.
For one, Dimon’s first instinct is to obnoxiously misinterpret Mayo’s question, putting words in his mouth, which you can tell he thinks is really clever – he thinks he’s mugging for the crowd, showing how easily he can bully Mayo. But actually all he’s done with his “So you would go to UBS and not JP Morgan Chase?” line is admit that his bank has a lower capital ratio than UBS, something that Mayo only implied, but never came out and said openly. So Dimon thinks he’s pushing Mayo around, and thinking he’s a big tough guy doing it, but actually he’s just helping Mayo make his point. It’s classic.
And the “That’s why I’m richer than you” line is a perfect example of how these guys think. Question: You say two plus two is six, but sir, isn’t it really four? Answer: No, because I have a huge cock. [Unzips.] [Raucous laughter.] That’s really the level these guys think at. If Dimon was reading this joke right now, he wouldn’t even be offended, he’d be flattered, that’s how fucking stupid these people are.
I thought about getting into the fact that inadequate capital ratios at big banks are the very thing that caused the 2008 financial crisis, that Dimon’s own bank required nearly $100 billion in taxpayer help to fill its own gaping capital hole during the crisis, and that Dimon was paying himself $20 million a year while taxpayers and the Fed were forking over untold billions to keep his company afloat – but why ruin the moment? All by itself, this audio exchange is a shimmering red ruby of pure funniness. It’s Dimon’s best performance since his Senate testimony last year, when he couldn’t stop rolling his eyes at the idea that he had to answer questions from this ridiculous group of poorly-groomed bureaucrats, not one of which had so much as his own airplane! His face said it all: You guys are all like 300 years old and you’re all making 170 grand! What have you been doing all these years?
“Yeah, but we make more money than you” has been Wall Street’s official answer to everything for nearly five years now, and one has to admit, they’re getting a hell of a lot of mileage out of it. If you don’t listen to anyone who doesn’t make as much money as you, but you pretty much have to be a giant douche to make that much money, it’s kind of a foolproof system.