Last Man Standing

by Duff McDonald

  Morris, Charles R. The Two Trillion Dollar Meltdown: Easy Money, High Rollers, and the Great Credit Crash. New York: PublicAffairs, 2009.

  Stewart, James B. Den of Thieves. New York: Touchstone, 1991.

  Stone, Amey, and Brewster, Mike. King of Capital: Sandy Weill and the Making of Citigroup. New York: John Wiley & Sons, 2002.

  Tett, Gillian. Fool’s Gold: How the Bold Dream of a Small Tribe at J.P. Morgan Was Corrupted by Wall Street Greed and Unleashed a Catastrophe. New York: Free Press, 2009.

  Weill, Sandy, and Kraushaar, Judah. The Real Deal: My Life in Business and Philanthropy. New York: Warner Business Books, 2006

  ACKNOWLEDGMENTS

  There are so many people to thank for helping with this book that it baffles the mind wondering just where I should start. So I’ll do the obvious: Thank you Jamie Dimon, for your openness and your time.

  I am deeply indebted to David Rosenthal of Simon & Schuster for taking on this project. My editor at Simon & Schuster, Colin Fox, was a superb partner, as was the rest of the S&S team, including Priscilla Painton, Victoria Meyer, Tracey Guest, Jackie Seow, and Michele Bové. My agent David Kuhn also deserves my gratitude for putting the idea for this project in my head.

  A few people outside Simon & Schuster helped on the front line of Last Man Standing. Hugo Lindgren of New York magazine performed his usual magic on my raw copy, and for that I am extremely grateful. My two researchers, Brian Burnsed and Miriam Datskovsky, performed yeoman’s work with no complaint. Chris Wahl, you also take a pretty fine snapshot.

  In recent years, a number of magazine editors have combined to give me work on the journey that ultimately led to this book. When Red Herring went bust in 2003, Graydon Carter generously asked me to write a few pieces for Vanity Fair. A few years later, Joanne Lipman at Conde Nast Portfolio gave me a job. Others warranting mention are Jason Pontin of Red Herring, Tony Keller of Canada’s National Post magazine, and Michael Hogan of Vanity Fair. Former Portfolio deputy editor Blaise Zerega also knows that I will forever owe him one or two.

  But it was New York editor Adam Moss who truly kickstarted this project. In a meeting in his office in January 2008 he asked me which prominent Wall Street people we should write about that year. I had just one idea for him: Jamie Dimon. A March cover story in New York followed, and the rest is history. Thank you, Adam.

  I want to thank all the people who took time out of busy schedules to speak to me during my reporting. To the Dimon family—Judy, Ted, and Themis—thanks for your inti red memories, including Steve Burke, James Long, Laurie and Peter Maglathlin, Jeremy Paul, and Brian Rogers. To Dimon’s high school English teacher, Mike Ingrisani, thanks for having a memory that stretched back that far.

  Also, thanks to much of the senior management of JPMorgan Chase—Frank Bisignano, Steve Black, Bill Campbell, Mike Cavanagh, Jimmy Lee, Kristin Lemkau, Todd Maclin, Jay Mandelbaum, Charlie Scharf, Gordon Smith, Jes Staley, and Bill Winters. Deserving particular gratitude: Joe Evangelisti, head of communications for JPMorgan Chase. I’m sure that you and your assistant, Loretta Russo, are glad you’re done with my phone calls. I will miss harassing you two.

  A number of others offered valuable insight, including Ken Bialkin, Dick Bove, Joe Califano, James Calvano, Rodgin Cohen, Marty Haase, John Hsu, Judah Kraushaar, Marc Lasry, Bob Lessin, Bob Lipp, Marge Magner, Mike Mayo, Mary McDermott, Alison Falls McElvery, Joseph Plumeri, Theresa Sweeney, Bob Volland, Sandy Weill, Meredith Whitney, Bob Willumstad, Joe Wright, and Frank Zarb.

  Thank you, too, Warren Buffett, for finally taking a call from me after nearly fifteen years of trying.

  A number of journalists and authors are owed gratitude for informing parts of this book, starting with Monica Langley, who wrote Tearing Down the Walls, a singular feat of reportage. More than a few conversations in Last Man Standing are drawn from Langley, who had the good sense to ask people to recollect them before they were lost in history’s winds. While there is much discussion of Sandy Weill in this book, it is almost exclusively focused on Weill’s influence on the life and career of Jamie Dimon. If you want to read the Sandy Weill story, go buy Langley’s book.

  To be informed on the subject like this is also to know the work of remarkable writers and reporters like Suzanna Andrews, Bryan Burrough, Richard Bookstaber, John Brooks, William Cohan, Ron Chernow, Suzanne Craig, Eric Dash, Steve Fish-man, Charles Geisst, John Helyar, Kate Kelly, Michael Lewis, Heidi Moore, Charles Morris, Floyd Norris, Andrew Ross Sorkin, James Stewart, Gillian Tett, and Shawn Tully. And thank you both, Ken Auletta and Roger Lowenstein, for taking the time to explain to me just how one writes a book such as this.

  I need to thank my sounding boards—Joe Burke, David Foster, Carney Hawks, Mike Humphries, Peter Keating, Chris Kerr, Dick Nearing, Bill Stromsem, and my siblings, Scott and Steve McDonald and Julie Carter. Also providing valuable counsel and support: Will Arnett, Shaun Assael, Ira Boudway, Michael Cader, Malcolm Fitch, Karen Keating, Rob Meder, Oliver Prichard, Liam Scott, and Hilary Stout. To the rest of my family and friends, thanks for the overwhelming support.

  The encouragement of my parents in this somewhat randomly chosen career gave me the courage to continue it even as my decision to leave Wall Street seemed pretty ridiculous around 1995. So thanks for that, Mom. I love you. I know Dad is reading this book while drinking a beer on the dock of the great cottage of heaven.

  Finally, to my wife Caroline: Thank you for your glorious patience during this project, especially as we grappled with the arrival of baby Marguerite. You two are the lights of my life.

  To all who helped, I hope the results prove worth the time spent.

  New York, July 2009

  Index

  Ackermann, Josef, 184

  Adage Capital, 244

  Adams, Austin, 200

  AIG, ix, 58, 138, 211, 273, 284, 287, 288, 309

  Alex Brown, 89

  Allegheny Corp., 175

  Allison, Herb, 112

  A. L. Williams, 48, 54–55, 221

  Amaranth Advisors, 217–18

  Amazon.com, 138

  American Banker, 166, 196

  American Can Co., 47–48

  American Credit Indemnity, 39

  American Express (Amex), 15, 19–26, 27, 29, 31, 35, 37, 66, 71, 98, 106, 134, 137, 138, 186, 208, 278, 323

  Andrews, Suzanna, 95

  Anheuser-Busch, 305

  AT&T, 158

  auction-rate securities, 276–77, 290

  auto leasing, 27, 31–32, 39, 159, 194

  Avis Rent-A-Car, 27

  Baca, Carlos, 222

  Bache Halsey Stuart Shields, 19

  Bachelder, Joseph, 148

  Bair, Sheila, ix–x, 292, 293, 294, 300

  balance sheets, 32, 39, 44–45, 47, 156, 160, 189, 192–93, 196–97, 198, 206, 209, 227, 238, 240, 272, 278, 310, 320, 323

  Ballmer, Steve, 181

  Banc One, 103, 143–45

  Bankers Trust, 89

  bank holding companies, 285, 287–88

  Bank Investment Consultant, 151

  Bank of America, ix, 27–30, 103, 147, 170, 174, 197, 204, 219, 222, 224–25, 229, 232, 238, 251, 274, 282, 286, 289, 295, 299–300, 302, 306, 310, 316, 318, 320

  Bank of Manhattan, 202, 203

  Bank of New York, 103, 202, 216, 238, 261, 283, 296

  Bank One, 143–51, 162, 167, 171–201, 204, 209, 220, 238–39, 261, 273, 291, 293

  Barbarians at the Gate (Burrough and Helyar), 28, 52

  Barclays Bank PLC, 52–53, 138, 282, 283

  Barron’s, 155, 168

  Baruch, Bernard, 45

  Beacon Group, 172, 174

  Bear Stearns, ix, 17, 19, 53, 112, 166, 204–5, 214, 216, 223–28, 230, 232, 240, 241, 243–74, 275, 277, 278, 279, 285, 286, 288, 289, 290, 294, 297, 300, 301, 306–7, 311, 317, 321, 326

  Beeson, Mark, 165

  Bergman, Shelley, 270

  Berkshire Hathaway, 27, 37, 190–91, 227, 231–32

  Berlind, Roger, 17

>   Bernanke, Ben, 89, 205, 230, 244, 247, 273, 285, 288, 300

  Bewkes, Jeff, 243

  Bezos, Jeff, 138

  Bialkin, Kenneth, 46, 184

  Bibliowicz, Jessica Weill, 7, 78–83, 96, 127–28, 186, 194

  Bisignano, Frank, 116, 166, 200, 239, 290, 299

  Black, Debbie, 118–19, 247, 249

  Black, Steve, 51, 59, 61, 66, 68, 77, 96, 118–20, 125–26, 133, 151, 163, 172, 176–77, 188, 189, 191, 199, 200, 217, 218, 225, 234, 235, 239, 242, 247–57, 262, 271, 278–81, 282, 286, 315

  Blackstone Group, 138

  Blank, Arthur, 139

  Blankfein, Lloyd, 221, 244, 275, 282, 300

  Blockbuster Entertainment, 69–70

  Blodget, Henry, 164

  Bloomberg, Michael, 251–52

  Bludhorn, Charlie, 17

  BNP Paribas, 226, 283

  Boesky, Ivan, 27

  Boisi, Geoffrey, 172

  bonds, 10, 20, 21, 32, 33, 34, 52, 53, 57, 73, 84, 90, 91, 109, 114, 182, 196, 200–206, 238, 254–55, 277, 297, 308

  Bonfire of the Vanities, The (Wolfe), 92

  bonuses, 39, 69, 156, 165, 195, 214, 216

  Bookstaber, Richard, 107–8, 109, 113, 130, 199

  Booz Allen Hamilton, 12

  Boshart, Jim, 68, 77, 149–50, 166, 176–77

  Boston Consulting Group, 8

  Bove, Dick, 131, 195, 196, 277

  Braunstein, Doug, 176, 253–54, 255, 258, 281

  Brenneman, Greg, 137, 168

  British Telecommunications, 96

  broad index secured trust offering (BISTRO), 210–11

  Brookfield Asset Management, 219

  Brooks, John, 231

  Brown & Co., 216

  Browning School, 3–5, 6, 10, 62

  Brysam Global Partners, 207

  Budd, Ed, 58, 70

  Buffett, Warren, xi, 25–26, 27, 37, 91–94, 135, 136, 160, 190–91, 201, 227, 231–32, 258–59, 323, 327

  Burke, Stephen, 9–11, 15, 25, 81, 139, 149

  Burner, Paul, 31

  Burnett, Erin, 316

  Burr, Aaron, 202

  Burrough, Bryan, 28, 52, 226

  Bush, George W., 205, 278, 301, 317

  Bushnell, Dave, 111

  Business Week, 53, 71, 72, 75, 84, 85, 89–90, 95, 124, 131, 134, 151, 194, 197–98, 224, 324

  Buyers-Russo, Jane, 281–82

  Califano, Joseph, 49, 75–76, 135

  Calvano, James, 27, 34, 37, 59, 150

  Campbell, William, 104, 107, 111–12, 139, 142, 150, 186, 215

  Capitalism and Freedom (Friedman), 6

  capital markets, 20, 51, 53, 61, 68, 83, 107–14, 277, 294

  capital reserves, 44–45, 46, 48, 131

  Capp, Al, 67

  Carpenter, Mike, 98, 100–101, 120, 122, 125–26, 163

  “Cars for Cons” program, 31–32

  Carter, Arthur, 17

  Carter, Berlind, Potoma & Weill (CBPW), 17

  Carter, Jimmy, 49

  Carter, Linda, 17

  Cassano, Joseph, 211

  Cavanagh, Emily, 151–52

  Cavanagh, Michael, 62, 84, 149, 150, 151–52, 180, 186, 208, 239, 240, 242, 246, 247, 248, 252, 253, 254, 256, 259, 260, 265, 290, 292, 293, 294–95, 298, 319, 326

  Cayne, James, 112, 166, 221, 226, 228, 241, 258, 265, 268, 269, 304, 323, 325

  CBS Marketwatch, 151

  CBWL-Hayden Stone, 17–18

  Chase, Salmon P., 202–3

  Chase Home Finance, 235, 291

  Chase Manhattan, 89, 135, 162, 171–73, 194, 199–204

  Chase National Bank, 202–3

  Chemical Bank, 36, 41, 57, 59, 89, 145, 171, 203

  Chenault, Ken, 244

  Cherasia, Peter, 270

  Chernow, Ron, 52, 87, 202, 203, 260

  Chicago Sun-Times, 153

  Chief Executive, 163

  Cioffi, Ralph, 223–26, 231

  Citadel Investment Group, 217–18, 268, 285–86

  CITIC, 228

  Citicorp, 54–55, 98–101

  Citigroup, 83, 98–150, 155, 160–68, 177, 178, 183–84, 185, 195, 196, 200–209, 214, 219, 220, 221, 228–30, 232, 238, 240, 251, 269, 276, 280, 289, 295–303, 310, 316, 321, 323, 324, 325

  City National Bank, 143

  Clinton, Bill, 87, 103, 140, 221

  Clinton, Hillary, 241, 316

  CNBC, 84, 227, 245, 249, 302

  CNN, 196

  Cogan, Marshall, 19

  Cohan, William, 224, 244, 258, 262

  Cohen, H. Rodgin, 245, 264, 293

  Cohen, Peter, 19, 21, 22, 46, 60, 77, 97, 101

  Cole, Robert, 51

  Coleman, Lewis, 147

  collateralized debt obligations (CDOs), 210–14, 230, 235–37, 276, 309

  Collins, Paul, 100, 102, 104, 105

  Comcast, 9, 149

  Commercial Credit, 30–50, 53, 59, 62, 85, 143, 150, 156, 159, 171, 192, 195, 203

  Commodities and Futures Trading Commission, 87–88

  Comptroller of the Currency, 87

  “conduit” arrangement, 248–49, 267–68, 270

  Continental Airlines, 168

  Continental Illinois, 295

  Control Data, 31–33

  Cook, Charles, 323

  Corrigan, E. Gerald, 53, 88

  Corzine, Jon, 73, 84–85, 115, 138, 182, 232, 322

  Coulter, David, 174, 176, 180

  Countrywide Financial, 251, 292

  Cox, Christopher, 311

  Crain’s Chicago Business, 170

  Cramer, Jim, 227, 230

  credit cards, 98, 144–45, 154–55, 167–68, 177, 193, 199–200, 208, 214, 233–34, 278, 296, 297, 301, 305, 312

  credit crisis (2008), 52, 162, 183, 232–38, 241, 272–76, 302–3, 313, 319

  credit default swaps (CDS), 210, 309–10

  Credit Suisse, 245

  Credit Suisse First Boston, 164

  Crown, James, 145, 146, 158, 176

  currency markets, 96, 108, 207, 241, 304–5

  Cutler, Stephen, 219, 239, 249, 254, 255

  Daley, Bill, 239

  Daley, Richard M., 148

  Davis, Evelyn, 269

  Dawkins, Pete, 148

  Dean Witter, 287

  Dean Witter Discover & Co., 89

  debt financing, 52, 53, 209–10

  debt ratings, 39, 49, 56, 156, 224

  Demon of Our Own Design, A (Bookstaber), 107–8, 113, 130, 199

  Deng, Luol, 152

  derivatives, 87–88, 89, 107–14, 188–91, 238, 309

  D. E. Shaw & Co., 245

  Deutsche Bank, 138, 184, 222, 241, 245, 252, 275

  DiFazio, Bob, 109

  Dimon, James “Jamie”:

  ambition of, 2, 9, 15, 20, 35, 75–77, 94–96, 117–30, 134, 145–48

  annual reports issued by, 160, 169, 182, 191, 195–96, 201, 230, 233, 234, 237–38, 322–23

  in Baltimore, 34, 35–40, 59

  as banker, 185–201, 219, 239, 240–43, 259–60, 273–79, 295–98, 300, 301–2, 305–7, 311–18

  business acumen of, 6–10, 12, 22, 35–42, 48–49, 62, 75–77, 81, 83–85, 92–93, 118, 125–30, 133, 154–55, 197–98, 206–8, 215–17, 231, 240–43, 252, 256–61, 272–76, 303–4, 311–12, 319–28

  in Chicago, 145–85, 186

  childhood of, 2–5

  competitors of, 36–41, 53, 55, 58, 66–75, 94–96, 103–7, 110–11, 114–15, 121–22

  congressional testimony of, 154, 255, 266, 315–16

  cost-cutting measures of, 35–36, 56–57, 58, 61, 63, 65, 73–75, 109, 146, 154, 158–60, 168, 169, 174, 186, 191–95, 196, 219, 221–22, 238

  as deal maker, 21, 22, 27–29, 54–55, 59–61, 89–90, 100–101, 130–32, 142, 151, 155, 168–70, 204–5, 216–17, 219, 273–74, 289–90, 294, 296–97, 300–301, 306–7, 319–22, 326

  death threat against, 298–99

  education of, 3–14, 15, 16, 22, 30, 37–38, 62, 81, 149, 323

  executive staff of, 35–42, 43, 59, 61–62
, 68, 70, 71, 76–80, 83, 111–12, 125–26, 133–34, 141, 149–51, 156–57, 165–66, 176–77, 186, 197–201, 238–39, 277, 278–79, 315, 326

  as father, 23, 50, 53, 124, 134, 136, 147, 184, 218

  friendships of, 4, 10–11, 12, 62–63, 132, 269–70, 325

  layoffs by, x, 35–36, 56–57, 58, 61, 73–74, 146, 174, 270–71, 304

  leadership of, 5, 125–32, 149–51, 156–60, 165–70, 175–80, 185–201, 215–17, 277, 303, 321–28

  lectures and speeches by, 140, 302–8, 310–11, 318–19, 326

  lifestyle of, 58, 65, 133–42, 143, 184–85, 187–88, 192, 220, 221–22

  “list” kept by, 61–62, 136–37, 139–40, 146, 173, 289–90

  media coverage of, 51–56, 61, 72–85, 95, 124–30, 134, 136, 140, 141–42, 147, 148, 151, 153, 166–70, 178, 179, 184, 193–98, 207–8, 220, 231, 239, 240–41, 259–60, 263, 266, 271, 278–79, 285, 286, 296, 301–2, 308–12, 317–18, 320

  moral values of, 5, 11, 25–26, 40, 81, 82–83, 135–36, 183, 187–88, 201, 257–58, 266, 286

  New York residences of, 3, 16, 40, 50–51, 122, 145–47, 150, 152, 153–54, 177, 184–85, 200

  outspokenness of, 3–5, 6, 9–12, 35–36, 40–43, 47, 56–57, 64, 70, 76–78, 85, 117–24, 127–28, 134, 167, 220, 259, 261–62, 308–11, 312

  personality of, 3–5, 6, 8–9, 11–12, 13, 20, 22–23, 40–43, 70, 75–77, 82–83, 85, 117–24, 127–28, 132, 133, 136–37, 148, 157, 167, 187–88, 192, 218, 219, 259, 261–62, 269–70, 277, 312, 325, 327–28

  photographs of, 2, 8, 75, 76, 278, 279

  political opinions of, 11, 14, 241, 312–19

  reputation of, x–xi, 40–43, 51–57, 61, 72, 75–77, 84–85, 104–42, 146, 150–51, 162, 168–70, 174, 175–79, 187–88, 193–97, 207–8, 219–22, 239, 240–43, 253, 256–63, 269–79, 296–97, 300, 301–4, 308–28

  salary of, 16, 25–26, 53, 97, 122, 126, 133, 148, 150, 165, 196

  stock owned by, 77–78, 97, 147–48, 165, 177–78, 241, 319

  wealth of, 16, 25–26, 53, 54–55, 65, 77, 97, 114, 122, 126, 133, 134, 148, 150, 153–54, 165, 184–85, 196, 241, 319, 322, 323, 326

  work schedule of, 23, 38, 40, 46–47, 61–62, 75, 77, 136–37, 151, 154

  Dimon, Judy Kent, 12–14, 15, 22–23, 40, 50–51, 54, 55, 77, 78, 96, 111, 114, 118–19, 120, 122–23, 124, 134, 136, 137, 139, 147, 152, 179, 184, 246, 302, 316, 317, 318

  Dimon, Julia, 23, 124, 147, 152, 246