JPMorgan’s Jamie Dimon and His Brush With Death: ‘You Don’t Have Time for an Ambulance’ – Fear jolted Jamie Dimon awake in the dark morning hours of March 5.
U.S. coronavirus cases numbered only around a hundred, but markets were flashing warning signs. It was 4 a.m., and the JPMorgan JPM -0.70% Chase & Co. chief executive dialed up his top lieutenants to deliver a message that couldn’t wait: The economy is in trouble.
Mr. Dimon hung up the phone and lay down on the couch to read the morning papers. He felt a rip in his chest. He sat up with a gasp and called his doctor. “Jamie, take a cab,” the doctor told him. “You don’t have time for an ambulance.”
Hours later, Mr. Dimon was clinging to life, surgeons perched above his chest repairing a gash in the artery that delivers blood from the heart to the rest of the body.
“I knew I might not make it,” Mr. Dimon told The Wall Street Journal in his first interview about the aortic tear. The CEO’s near-death experience came as the U.S. economy was hurtling toward its own crisis. The twin emergencies would test JPMorgan’s foundations even more severely than the 2008 financial crisis.
The bank serves half of all U.S. households and 400 of the Fortune 500. For more than a decade, a booming economy lifted JPMorgan’s fortunes. The bank, in turn, supported the economy’s growth, lending to millions of businesses and consumers. By March, the coronavirus was threatening to punch a hole in that system.
For Mr. Dimon, it was the ultimate test of a career-spanning obsession with what he calls the fortress balance sheet—a capital position so strong that the bank could withstand any crisis. Had he built a fortress that could withstand this onslaught? And would the fortress hold, even without him?
Mr. Dimon recovered from his near-fatal heart injury. But for a few weeks, as the coronavirus ravaged the economy, the nation’s most famous banker wasn’t at the head of America’s biggest bank.
The economy is getting better, too. Unemployment has improved every month since April, and vaccines have put the pandemic’s end in sight. The stock market has rebounded to set new records.
Mr. Dimon, out of step with some who see those factors fueling a steady recovery, is worried. He thinks the growth is fragile.
A nationwide surge in coronavirus infections and new restrictions could lead to more layoffs, depressed spending and a fresh round of small-business failures. The bank’s customer data, he said, paint a picture of an uneven recovery. The unemployed are running dangerously low on savings and cutting back on the basics; the wealthy are buying second homes and new cars.
This week’s passage by Congress of a new $900 billion stimulus plan, if ultimately signed into law, will help, but it won’t fix the structural defects that allowed the chasm to open up in the first place, Mr. Dimon said. That, he said, requires an aggressive policy response. Absent one, he fears, the economy won’t fully recover. And a tepid economy is bad news for JPMorgan.
“Everything is fubar,” Mr. Dimon was telling some staff earlier this year.
Mr. Dimon’s 15th year as the CEO was supposed to be a good one.
JPMorgan closed out 2019 with $36 billion in profit—eight times its 2004 earnings. Its stock hit an all-time high, pushing the value of the shares Mr. Dimon owns above $1 billion for the first time.
The early part of the year was packed with travel, starting with the opening number on every global CEO’s dance card: the World Economic Forum in Davos, Switzerland. It was late January, and the coronavirus had sickened hundreds of people in China. That did little to damp the mood at the annual gathering of the world’s business and political elite. Standing with former British Prime Minister Tony Blair, a longtime adviser to the bank, Mr. Dimon shook hands in a receiving line at a cocktail reception.
From Davos, Mr. Dimon went to Washington for another annual gathering of the rich and famous, the Alfalfa Club dinner. Then it was a retreat for the bank’s top 200 senior leaders. From there, he went to Miami, where clients of JPMorgan’s private bank for the ultrarich heard from Prince Harry and Meghan Markle. Covid-19 was still a distant worry; the U.S. had only a handful of confirmed cases.
Mr. Dimon was feeling under the weather but chalked it up to all the travel. Still, to be safe, he skipped the handshakes. When he came down with a fever, he stayed in his hotel room.
At JPMorgan’s annual investor day on Feb. 25, Mr. Dimon hinted he was hunting for acquisitions, sending Wall Street into a tizzy. As a young, brash deal maker in the 1990s, Mr. Dimon helped assemble a global banking behemoth— Citigroup Inc. But JPMorgan hadn’t done a big deal since the financial crisis, when it scooped up failing Bear Stearns and Washington Mutual.
Mr. Dimon demurred when an analyst asked if the coronavirus would hit the bank’s results.
“I have this nightmare somehow in Davos all of us who went there got it. And then we all left and spread it,” he said. “The only good news from that is it might have just killed the elites. So I just don’t know, we’ll just have to wait and see. I’m not sure it helps to guess.”
The audience laughed.
A few days later, the pandemic officially arrived in New York with the city’s first confirmed infection. On March 3, the Federal Reserve moved to blunt the economic effects of the rapidly spreading virus with a half-point rate cut.
Wall Street wasn’t laughing anymore. Investors piled into ultrasafe government bonds, sending the yield on the 10-year Treasury below 1% for the first time.
The mood had shifted at JPMorgan, too. Top executives formed a SWAT team to handle the growing crisis. They met several times a day in a conference room belonging to Mary Erdoes, the bank’s asset- and wealth-management chief, that was retrofitted with dozens of screens to monitor coronavirus cases, staff and activity around the globe.
Mr. Dimon started drafting a letter to Treasury Secretary Steven Mnuchin and others, laying out his predictions for the virus’s economic impact. The bank canceled its annual summit of CEOs.
On March 5, Mr. Dimon was supposed to be at St. Patrick’s Cathedral on Fifth Avenue for the funeral of Jack Welch, the longtime General Electric Co. CEO.
Instead, he was 18 blocks uptown at NewYork-Presbyterian Hospital. The details of that morning are crystal clear in Mr. Dimon’s memory. Clutching his chest, he replayed the moment the lining of his aorta burst.
“I felt it,” Mr. Dimon said. “I thought I heard it.”
His wife, Judy, ushered him downstairs and hailed a cab outside their Upper East Side apartment for a short ride to the hospital. He sent his secretary an email saying he didn’t feel well and was getting checked out. His right arm ached and the vision in his right eye was sinking into a yellowy darkness.
At the hospital, a surgeon ran a quick test. The blood pressure in Mr. Dimon’s left arm was high, with the top number reading 140. But his right arm showed 60, dangerously low.
Half his body wasn’t getting enough blood.
A heart surgeon who had once operated on Mr. Dimon’s late father explained that he was suffering from an aortic dissection, a tear in the inner wall of the essential artery that delivers blood throughout the body. Mr. Dimon’s injury was to the part of the aorta closest to the heart, the ascending section just before the arch that plunges the artery downward.
Left untreated, aortic dissections are typically fatal. Because they are thought to be rare—in 2018, dissections killed 9,923 in the U.S., according to the Centers for Disease Control and Prevention—doctors often miss them. Actor John Ritter died after an aortic dissection in 2003. His doctors thought it was a heart attack.
In surgery, the doctor said, they would have a brief window to implant a tube and rebuild his aorta. At any moment, the whole thing could rupture. If that happened, there would be no way to save him.
Mr. Dimon told his wife to call Stacey Friedman, the bank’s general counsel.
Ms. Friedman called the bank’s lead director. Then she called Daniel Pinto, who runs JPMorgan’s corporate and investment bank, and Gordon Smith, the head of its sprawling consumer operations. Together they had risen to become co-presidents and co-chief operating officers, overseeing the bulk of the bank’s day-to-day operations.
Mr. Dimon was in surgery, she told them. They were both on deck.
As doctors patched up Mr. Dimon during seven hours of surgery, the board of directors held a vote to implement what they called the “Jamie got hit by a bus” plan—the bank’s emergency succession protocol.
JPMorgan’s operating committee, Mr. Dimon’s inner circle, gathered that afternoon. They shared word from the doctors and Mr. Dimon’s family: The surgery went well but he wasn’t out of the woods. Ms. Friedman dialed up officials at the Fed and the Office of the Comptroller of the Currency to tell them what was happening. The bank sent a memo to staff and released it to the press at the same time.
Mr. Pinto caught a plane from London, where he lives, due to arrive in New York at 2 a.m.
That evening, Mr. Dimon surprised his doctors by waking up. He was supposed to be knocked out for a day or two. He wanted his ventilator removed. His wife, his three daughters and two sons-in-law, and his twin brother were all waiting at his bedside.
Over the weekend, Saudi Arabia kicked off an oil price war that sent markets spiraling. On Monday morning, stocks fell so far so fast that they triggered, for the first time in 22 years, a market circuit breaker that halted trading for 15 minutes.
On March 11, Mr. Smith went to Washington, taking Mr. Dimon’s place at a White House summit of America’s top bankers. The televised meeting was meant to calm jittery markets and reassure the public that the nation’s banking system was on solid footing. President Trump asked Mr. Smith how Mr. Dimon was doing.
At that moment, Mr. Dimon lay in a bed at a hospital named for financier Sandy Weill. Mr. Weill, his onetime mentor, had abruptly fired him from Citigroup two decades earlier in a power struggle.
He ached all over. His heart, getting used to its new parts, thumped so strongly his daughters felt it when they hugged him. His scar looked like a zipper that would open a jacket right down the middle of his chest. There were tubes and probes in his lungs, arteries and jugular vein.
After a few days, the medical staff started pulling the tubes and electrodes out of his body. On March 12, a week after surgery, Mr. Dimon was released from the hospital.
Friday, March 13, was Mr. Dimon’s 64th birthday. He joined a call with his top executives, and they sang “Happy Birthday” to him.
That weekend, the coronavirus shut down America.
Schools and nonessential businesses closed. People were told to stay home and avoid socializing outside their households. On Sunday, March 15, the Fed slashed interest rates to near zero, its second emergency cut in as many weeks.
On a conference call with the leaders of America’s biggest banks that evening, Morgan Stanley Chief Executive James Gorman suggested they all suspend share repurchases to free up funds to lend to consumers and businesses. Mr. Smith agreed.
By Monday morning, the financial world looked to many to be headed for a crisis. Stocks again tripped their circuit breakers. Investors dumped shares and other securities—anything that looked even remotely risky—and stockpiled cash.
Mr. Dimon dialed into the bank’s executive meeting. His voice was still hoarse, but he wasn’t acting too sick.
Among the options on the table: borrowing from the Fed’s emergency-lending program. The discount window, as it is known, is meant to help banks weather short-term funding crunches, typically with an overnight loan. There was a big stigma attached to borrowing directly from the Fed—banks more or less abandoned it after the financial crisis. Do it, Mr. Dimon said.
Later that day, eight of the biggest U.S. banks announced they would all borrow from the window. None of them needed the Fed to backstop them that night, but the future was deeply uncertain. If they acted as a group now, they would signal that borrowing in the future wasn’t cause for alarm.
On March 23, the Federal Reserve rolled out an aggressive plan to flood the markets with money. It would lend to businesses and investors and purchase unlimited amounts of government debt—whatever was necessary to boost the ailing economy.
Four days later, Mr. Trump signed a $2 trillion stimulus bill that included direct payments to most Americans, an extra $600 a week in unemployment benefits, loans and grants for struggling industries and a small-business bailout. Much of the money would flow through America’s banks, including JPMorgan.
The fiscal and monetary stimulus revived battered markets. Companies that had hoarded cash by maxing out their credit lines raced to sell new debt to eager investors.
Still, by the end of March, confirmed U.S. cases of Covid-19 had crossed 180,000, and the U.S. Navy hospital ship Comfort was heading into New York harbor.
Some 10 million people had lost their jobs. Bank stocks were plummeting, as investors worried they would face surges in losses. Consumer spending had cratered, and a recession that suddenly looked like the worst since the Great Depression was looming.
Mr. Dimon, secluded at his Manhattan apartment, was under the care of his wife. He joined virtual operating committee gatherings, but left decisions to them. In recent years, Mr. Dimon had delegated more authority, but he remained deeply embedded in every business line and thrives in a crisis.
Doctors cleared him to return to work full-time remotely the first week of April. He was warned to heed dizziness and pain. By then, he had decamped to his house in Bedford, a Westchester suburb. Still building strength, he took walks of several miles around the neighborhood. More extended family arrived to be with him.
Mr. Dimon got to work preparing JPMorgan for a painful recession. Each morning, he was given reports on the bank’s exposure to companies in the news. Executives spent hours debating an ever-shifting set of five economic scenarios, from best-case to worst-case. To figure out how much the bank needed to set aside if people and businesses stopped paying them back for loans, they had to assign probabilities to all five. But they couldn’t agree on where the economy was headed.
The bank’s researchers and economists needed data that was being revised in real time. They tracked future Broadway ticket sales and Google search trends for “unemployment benefits.” Some studied what happened when hurricanes wiped out cities.
Mr. Dimon wanted to prepare for the worst-case scenario. But the most-likely picture, executives decided, was a grim second quarter during which unemployment would rise above 10% and gross domestic product would plunge at a breathtaking annualized rate of 25%.
To estimate how many loans would default, they paired the broad economic forecasts with reams of data on customers. The roughly 150 variables included where they lived and worked and what kind of house they owned.
They were surprised at how customers were behaving.
Unemployment had soared, but customers were paying down credit-card debt instead of racking up balances. Customers flooded the bank with relief requests but kept paying on their loans. Spending on Chase credit cards plunged. Savings swelled. The usual correlation between rising unemployment and deteriorating consumer finances had broken down.
Mr. Dimon was convinced that the flood of government money was easing the symptoms of the recession while masking the economy’s underlying illness.
“Every piece of data seems distorted,” Mr. Dimon told executives. “A recession is happening. We just can’t see all of it.”
On April 14, the bank set aside $8.3 billion to cover potential losses on loans, far more than analysts had predicted. The bank’s quarterly profit fell by nearly 70%.
Already, the bank’s dire forecasts for the economy had worsened. It now expected 20% unemployment and a 40% annualized drop in GDP in the second quarter.
The spring and early summer brought better news. Infections fell sharply in New York and the hard-hit northeast. The unemployment rate peaked at 14.7% in April, below the bank’s expectations. Cities and states marched toward reopening.
Mr. Dimon again went against the optimistic thinking and believed that many of the layoffs workers assumed were temporary would eventually become permanent. When that happened, spending would drop again, forcing businesses to cut more jobs.
On June 9, Mr. Dimon returned to JPMorgan’s nearly empty Madison Avenue headquarters and started working there most days. His doctors had him monitor his blood pressure at his desk as a precaution, and he was watching his heart rate on his smartwatch.
In late June, he went to Washington to meet with Mr. Mnuchin and lawmakers to urge more action.
For years, Mr. Dimon has used JPMorgan as a platform to weigh in on the nation’s problems and offer solutions, from taxes to infrastructure to education. He has been building an internal think tank and a policy group that study the unrivaled data that comes from handling the daily checking accounts of millions of Americans and small businesses.
Mr. Dimon believed the data could help officials understand the severity of what the economy was facing. The shutdowns had hurt many, but the pain wasn’t equally spread. Heading into the crisis, half of all small businesses held less than 15 days of cash on hand. They were now hoarding cash, but partly because they had stopped paying suppliers and workers. Minority businesses, in particular, were in trouble.
Meanwhile, JPMorgan customers continued to behave in unexpected ways. They were still holding on to 30% of their stimulus checks, a savings rate that stunned executives.
In July, the bank put aside another $10.5 billion for potential losses on loans, much of it to cover corporate loans that could go bad. Still, JPMorgan posted more revenue than it ever had in a quarter.
By the middle of August, the S&P 500 was setting new records, but bank stocks were down, as investors worried about their profitability. The only thing that seemed to lift them was talk of stimulus.
In September, Mr. Dimon made another trip to Washington, determined to share evidence that the first round of stimulus was wearing off. Customers on unemployment had used their topped-up benefits to pad their savings. In August, after those extra payments ended, they had burned through two-thirds of it.
Still, Mr. Dimon was quietly talking about a deal that indicated his confidence in the bank’s own health. Eaton Vance Corp. , an asset manager with $500 billion in assets, was for sale. It was exactly the kind of acquisition Mr. Dimon had telegraphed at the February investor day: a chance to bring in high-margin assets that aren’t easily grown in-house. In the end, he walked away. Morgan Stanley won the prize with a $7 billion bid.
In October, JPMorgan surprised the market with its third-quarter results: Profit had rebounded to pre-pandemic levels. Markets had staged a remarkable comeback from March and companies rushed to raise debt and equity, boosting the bank’s Wall Street businesses.
The bank released some of the money it had been storing for losses on loans. Mr. Dimon tried again to tamp down any enthusiasm and warned that the recovery could stall without more stimulus, leading to a double-dip recession. If that happened, the bank could be as much as $20 billion short of what it would need to cover soured loans, he said.
The presidential election added more volatility. Stocks moved up and down as investors bet on the outcome and the likelihood for more stimulus.
In recent weeks, positive news on the vaccine front has raised hopes. On Nov. 24, the Dow Jones Industrial Average surged past 30000 for the first time.
At the same time, though, a nationwide spike in virus cases threatens new lockdowns that could send the economy back into a tailspin. Weekly jobless claims recently hit their highest level since September. Household spending fell in November, after six months of increases.
This week, Congress passed another $900 billion in stimulus funds. If signed by the president, it will send more checks to households, boost unemployment payouts and extend a nationwide freeze on evictions. It also creates another round of small-business help.
JPMorgan economists had been predicting a decline in the first-quarter U.S. economy, despite the consensus view for growth. After Congress put forward the stimulus plan, the bank lifted its view.
Mr. Dimon still worries about the future. Short-term government actions can’t fix the lasting pain and widening inequality in the economy, he warned.
Many of those who kept their jobs came out ahead—socking away money they would have spent commuting to work or traveling. Others who struggled to navigate the bureaucracy of unemployment have fallen into poverty. Ultralow interest rates have spurred a homebuying boom, while a growing number of Americans are relying on food banks to feed their families.
In the recovery from the last recession, Mr. Dimon believes America grew more slowly than it should have. The inequality that recovery created has made capitalism itself unstable, he has said.
He fears that without fundamental policy changes, this recovery will stall, too. He has been calling for education reform; tax changes that lift the take-home pay for lower-income workers and for training programs so more people can make a living wage; infrastructure spending and litigation reform that would help businesses compete; and tweaks to banking regulation he believes hampers his operations.
JPMorgan also has its scars. In the first nine months, profits fell about 40% from the year before. Its shares are down 10% this year, while the S&P 500 is up about 14%. That would be its worst annual comparison in 30 years—the bank’s stock actually outperformed the broader index during the financial crisis in 2008 and 2009. The profit margin on its core lending business has plunged.
Still, JPMorgan performed better than its big-bank benchmark this year and investors continue to give it a valuation above rivals. Even while it prepared for losses on loans, it stuck to investment plans in its branches and technology, work Mr. Dimon insists is critical to growth.
Mr. Dimon’s doctors aren’t sure why his aorta burst. Old lab results didn’t reveal missed signs or evidence of an aneurysm that could have caused the rupture. One doctor wondered if they had missed spikes in his blood pressure that had weakened his aorta. His surgeon chalked it up to a freak accident, and regular checkups have shown no lasting damage.
When Mr. Dimon learned that someone he saw in February had contracted Covid-19, his mind returned to all those hands he shook and the fever that confined him to a Miami hotel room. He has been asked so often he is wondering, too: Could it have been Covid?
An antibody test came back negative, but that’s not unusual for tests taken many months after infection.
One thing he says he is sure of: He is too busy to think about retiring.
“We have to be focused on beating this,” Mr. Dimon said. “We have to get out of Covid before anything else.”