Last Man Standing: The Ascent of Jamie Dimon and JPMorgan Chase |  | Author: Duff McDonald
Publisher: Simon & Schuster
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Rating:  14 reviews
Sales Rank: 1557
Media: Hardcover
Pages: 352
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Dimensions (in): 9.4 x 6.3 x 0.9
ISBN: 1416599533
Dewey Decimal Number: 332.122092
EAN: 9781416599531
ASIN: 1416599533
Publication Date: October 6, 2009
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Product Description
In the midst of this disastrous economic climate, one executive has weathered the storm more deftly than any other: Jamie Dimon, chairman and CEO of JPMorgan Chase, considered the dominant fi gure on Wall Street. Dimon's eleventh-hour acquisition, in 2008, of fl ailing archrival Bear Stearns stunned the world. Even more incredible: JPMorgan's continued success in the face of an industry-wide meltdown that has seen its CEO become a paragon of finance.In Last Man Standing, award-winning journalist Duff McDonald chronicles Dimon's tumultuous rise: from his joining the legendary Sandy Weill at American Express fresh out of Harvard Business School to their building of Citigroup (and Dimon's unceremonious ouster) to his rescue of Bank One and, at the unprecedented age of forty-eight, his ascension to the top post at JPMorgan Chase -- a bank he transformed from a broken institution to the sine qua non of global banking in five short years. Upon gaining unfettered access to Dimon, McDonald spent countless hours interviewing him and his full circle of family, friends, and colleagues to provide an unprecedented and deeply personal look at this extraordinary figure. Moving beyond Dimon's "fortress" balance sheets, McDonald reveals a dedicated family man whose uncanny facility with numbers and tireless work ethic are complemented by fierce loyalty and an unrelenting aversion to offi ce politics. Dimon, for the first time, shares detailed insights on the heart of his business and management philosophies, and industry titans such as Weill and Warren Buffett offer their analyses of his career. At a time when Dimon's competitors watch their companies crumble, JPMorgan not only continues to weather the worst period in the history of Wall Street but is growing by leaps and bounds. The defi nitive biography of Jamie Dimon, Last Man Standing is by far the most comprehensive portrait of the only man in finance today who can be called an American hero.
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Showing reviews 1-5 of 14
Worth the Read November 17, 2009
J.S. MEWS (Connecticut, USA)
Although I doubt it will win any awards, the book was an interesting and easy to read synopsis of where Jamie Dimon came from and the major events shaping the 'banking' crisis. Lots of things likely not included but that's to be expected. The whole relationship with Sandy Weill was quite an interesting tale.
Book Review Guy November 10, 2009
Robert F. Mclaughlin (Dallas, Texas)
I enjoy the study of economics, markets and big business. Last Man Standing cleverly covers all of these topics within the outline of a biography, making it a very interesting read. Last Man Standing is a captivating biography of Jamie Dimon, with emphasis on his experiences with Sandy Weill, Bank One and JP Morgan Chase. The Bear Sterns and WaMu takeovers are also covered.
For perspective, I reviewed the Amazon book reviews for this book. Two of the reviewers had actually worked with Dimon and describe him as inspiring with drive, determination and great attention to detail. This is the same Jamie Dimon described in the book!
I appreciate the effort McDonald put into this insightful book. And I thank him for not including minutia detail; his level of detail is enough to tell the story in a fast and captivating pace.
Last Man Standing is a great read and I recommend it to anyone.
Robert F. McLaughlin AIA, NCARB
 Why is Kindle version $15?? October 21, 2009
K. Thurman (Tacoma, WA United States)
0 out of 9 found this review helpful
I will not buy any kindle books over $10. The higher price can not be justified.
 Verbose and Vauge, but Still Useful October 20, 2009
Loyd E. Eskildson (Phoenix, AZ.)
11 out of 15 found this review helpful
Wouldn't it be wonderful to read a book about Jamie Dimon, CEO of J.P. Morgan Chase, and obtain an increased understanding of banking, the 2008 crash, and how Dimon has successfully managed banks? Unfortunately, it won't happen easily via "Last Man Standing." The book fails to take a management emphasis, rarely defines terms and concepts, and is basically a chronology of Dimon's life. Nonetheless, some good can be derived from its reading.
Dimon, without question, is highly talented. However, his career received two initial major boosts. The first was working for several Harvard Business School professors in finance prior to beginning his Harvard Business School (HBS) experience. This provided him with early high-level exposure to the area and undoubtedly enriched his education experience as well. The second was joining forces with Sandy Weill in 1982 upon graduating from Harvard (Baker Scholar - top 5%), and having the opportunity to participate in top-level analyses and decision-making with many a 'mover and shaker.' (Dimon's alternative was more remunerative, but much lower level positions in investment banking.)
Weill had recently been pushed out of American Express, so Dimon was taking a bit of a gamble joining up with Weill. Fortunately, it wasn't too long before Control Data asked for help with its newly acquired Commercial Credit unit - lender to those with relatively low household incomes. Weill was appointed CEO in 1986, a leveraged buy-out soon followed, assuring a rich options opportunity for both himself and Dimon. Other steps included a 10% staff cut, selling off the car leasing and accounts-receivable insurance businesses (too much risk), and cutting executive perks (magazine subscriptions, country club memberships, flowers). Return on equity jumped from 4% to 18%. McDonald also lets readers know that Dimon was seen as abrasive and arrogant, as well as an incredible fact-digger and student of corporate financials. (If your child's report card says "Doesn't work well with others," don't worry.)
The business model Weill and Dimon adopted was that of running the business conservatively, building fortress balance sheets (high-quality capital - common and preferred stock, conservative accounting and loss reserves) to make acquisitions during downturns when assets were cheap. Aim to make the firm either more distinctive (eg. provide customers with a more comprehensive accounting statement), or the low-cost producer - aka Porter's HBS strategic advice. They went on to buy Primerica (Gerry Tsai's over-leveraged American Can, plus acquisitions), then Drexel Burnham, Barclay's American/Financial, and ultimately Traveler's Insurance. (The latter was caught between real estate defaults in its investments and annuity investors wanting their returns.)
Weill eventually became jealous over the publicity and attention afforded Dimon (New Yorkers had seen this movie before when Mayor Giuliani pushed the highly successful Police Chief Bratton out for the same reason), was outraged that Dimon denied Weill's daughter a promotion (McDonald says Dimon was correct in doing so; regardless, probably not a good career move by Dimon), and shortly after Weill acquired Citibank, Dimon is pushed out in 2000. (How Weill got the laws changed and the Federal Reserve to go along is a whole other, 'dark,' topic.)
After about a year, Banc One, 4th-largest bank in the U.S. was having problems with its most recent merger involving a Chicago-based bank. Banc One had been built up by buying competitors with the promise they'd be allowed to keep on doing what they had been doing. The result was more willing sellers, and a failure to take advantage of scale or synergies. Another problem was top-level political infighting between the two banks over who would remain. A third problem was First USA - a credit card unit bought for $8 billion in 1997 that was losing 16% of customers/year due to rate hikes and poor service.
Dimon resolved the infighting problem within a year - all but one of the thirteen executive committee members were replaced (seven came from Citibank), he reduced the combined board from 22 to 13 and put his own allies on it. New hires from Citibank were given a one-year contract at 2/3 their prior salary, for a smaller job at a worse-off company. (Weill complained, Dimon told him to look at his own operation to see why they were leaving.)
Another early focus was on standardizing computer systems (seven deposit systems, five loan systems- these were combined), improved financial controls (Dimon believed the bank had taken on excessive risk, and also wrote-off $15 billion in bad assets from 2000-2003), and revised reporting structures. Neither grand strategy nor acquisitions were on the agenda - Dimon wanted to first get a solidly executing base. Cash was conserved by cutting the dividend in half, freeing up $1 billion/year, despite objections from some shareholders. Twelve thousand were laid off, and accountability improved by establishing P&L reports for each branch. Management motivation was intensified by switching from the historic 5-12% raises for all, to 100% for the top 10%, 50% for the next 10%, 30% for the following 50%, and nothing for the lagging 30%. Hours were extended to match competitors. Consultants, especially those working on implementation, were cut to a minimum (anything over $100,000 required Dimon's approval - he believed managers should do their own work), executive coaches and perks were eliminated, and options were restructured to expire in six years rather than ten.
Another major initiative was Dimon's canceling the bank's large IT outsourcing deal - he saw this area as a core competency. Finally, some lines of business were exited - eg. auto leasing (Dimon disliked involvement with rapidly depreciating investments, especially mobile homes).
Meanwhile, back in New York City, the head of J.P. Morgan Chase was concerned about succession, and decided to solve that problem (and a few others) by acquiring Banc One and Jamie Dimon. A 14% stock premium was paid, Dimon pocketed $44 million on the shares he bought when moving to Banc One, and a new #2 bank ($1.1 trillion in assets, vs. Citigroup's $1.3 trillion) came into being.
Dimon then basically repeats the actions he had learned and taken previously. Perks went out - including the 15 corporate gyms, golden parachutes, deferred compensation, first-class air travel, chiefs of staff at any level, and 401(k) matching. Executive health insurance premiums were increased. Twelve thousand lost their jobs, and 80% of unallocated corporate expenses were pushed down to lower levels of responsibility. The bank's $5 billion IT outsourcing contract with IBM was canceled, and staff were given six weeks to decide on what the new single computer system would consist of. (Dimon promised to do it for them if the decisions weren't made by then.) The bank exited the business of providing loans for mobile homes, reduced exposure to sub-prime loans, SIVs, and derivatives because the risk premiums were not great enough. Dimon reasserted that borrowing short-term to finance long-term assets is a fundamental commandment that cannot be violated. And Dimon also found time to review the compensation of each of the top 500 managers, along with a committee.
The year 2007 ended with J.P. Morgan Chase leveraged at 12.7X, vs. 19.2 at Citigroup, and 33.5 for Bear, Stearns. 2008, however, would not be a good year for Bear, Stearns. It began the year paying 2.3% for credit insurance (2X that of Morgan, and 4X Deutsche Bank). This rose to 6.26% by March 10. Bear eventually asked for help - telling Morgan it needed between $4 - 20 billion. (This spread made it obvious to Morgan personnel that Bear leaders didn't know what they were talking about.) Eventually, J.P. Morgan Chase acquired Bear for $10/share (the price would have been $2 except for a major error by the outside attorney's used by Chase), and 10,000 of Bear's 14,000 employees left or were laid off. Market share was not emphasized by Dimon; building reserves and reducing risk (eg. returning to 80% loan-to-value standards, exiting business originated by loan brokers - formerly 30% of their home loans originated this way, and continuing to stay away from ARMs) was. (Unfortunately, this section of "Last Man Standing" was especially verbose and vague. The good news is that Dimon's "Letter to Stockholders" helps, and is included herein.)
The year 2008 brought the largest S&L failure in history - Washington Mutual. J.P. Morgan acquired its banking subsidiaries (including 2,200 branches) for $1.9 billion from the FDIC. (The FDIC and J.P. Morgan were subsequently sued for $13 billion by those believing the sale was a 'fire-sale' price. Chase is now the largest credit-card issuer in the nation, but only earns 5% on equity - hardly rapacious as many would claim. (Was 21% in 2007.) It now is raising credit-card lending standards and increasing loan reserves - anticipating greater losses due to unemployment, and no profits at all in the coming year. In each of its businesses, Chase ranks in the top three of that industry (aka Welch's mandate to G.E. - insure scale economies and focus on growth); however, Dimon insists market share is not the goal. Thirteen million square feet of excess real estate has been shed 2003 - 2007.
TARP money was accepted - not because Chase needed it, but to preserve unanimity and avoid other banks trying to avoid accepting it because it would signal weakness to the financial markets. Chase has reduced it dividend. Dimon also points out that 'this is not your grandfather's economy' - traditional banks now provide only 20% of lending in the economy; right after WWII it was 60%. Substitutes include money-market and bond funds, etc.
Bottom Line: "Last Man Standing" has too much fluff and unexplained material. However, careful reading, combined with reference to Dimon's 'Management Letters' make this a valuable endeavor.
 Mastermind or Criminal?? October 17, 2009
Marc L. Ward (Wichita, Kansas USA)
3 out of 4 found this review helpful
I came up with this title because as you read the book, you will know whether you are a free capitalist or a liberal statist. My point is that Jamie Dimon was and is a masterful leader, whom listens and puts his team and company into positions to capitalize on other peoples failures. His risk abilities are incredible. He was there when Citi was put together, took Bank One from a helpless group of community banks to high profitability, merged Bank One and took over J.P. Morgan to do the same. Three for three sounds like a winner. As a free capitalist you have to admire. As a liberal statist, you hate this, as he is pouncing on the weak.
If you are wanting to learn about leadership, company focus and execution, you need to purchase this book. FIVE STAR! If you have the mentality that banking executives are greedy robber barons, then brouse on over into another section of Amazon, as you will rate this a one.
Showing reviews 1-5 of 14
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