[ by Howard Haykin ] Jamie Dimon, immediately upon graduating from Harvard B-School, he was hired by Sandy Weill - who, at the time, was with American Express - and immediately became Mr. Weill's protege - learning as few, if any, others could ever experience.  Dimon remained at Mr. Weill's side until he was dismissed from Citigroup - the result of a personal and political battle between Mr. Weill and Citigroup Chairman John Reed. In 2000, Dimon became CEO of Bank One, the nation's 5th largest bank.  When JPMorgan Chase purchased Bank One in July 2004, Mr. Dimon became president and COO of the combined company.  On 12/31/05, Mr. Dimon was named CEO of JPMorgan Chase;  one year later he became the bank's Chairman - positions he continues to hold. Ability to Reverse Trading Losses. If there's one thing Jamie Dimon's learned, it's that most trading losses, while serious, do not leave a permanent scar on a firm.  Successful traders don't dwell on losses, because they cannot be reversed.  Instead, they look to the next trade.  Eventually, good traders, and successful financial institutions generate more winning trades than losing trades.  So, in the case of a large loss of $2 billion, or even $5 billion, the firm will make up those losses and are not weighed down with lingering negative stigmas.  It's all just a matter of time. Ability to Reverse Reputational Losses. If there's one thing Jamie Dimon's learned, its that what can be said for trading losses cannot necessarily be said for lost or sullied reputations.  After suffering a blow to one's reputation - partial or complete - a person or firm can become an object of scorn, resulting in widespread respect among peers.  The person or firm no longer no longer is afforded the benefit of the doubt and, depending on the severity of the "crime," it's not uncommon for one to be ostracized from the community.  As time passes, such negative perceptions feed upon themselves, deepening and extending the negative views and behaviors that follow. Most significant, is that it's very difficult to deal with an intangible asset that has been damaged. Look Who Benefited From a Strong Reputation. Bernie Madoff is a perfect example of what one can do when his strongly positive reputation is 'set in stone'.  Bernie was viewed as a leader in the broker-dealer trading community, someone who achieved high levels of success and profits that enabled him to grow the size of his firm and to spend more freely than most on the latest technologies. Examiners who could not see or understand the logic of Madoff's transactions, or who suspected that Madoff had committed errors or violations, oftentimes were afraid to challenge Madoff - i.e., bring them to his attention, or ask him for explanations - because they anticipated that he would belittle them for lacking basic securities knowledge.  Even peers, who served on NASD boards with Madoff, gave him the benefit of the doubt and would not want to make him look silly or stupid, if such was the case - but accepted him for what he portrayed himself to be. Jamie Dimon Puts Lessons to Practical Use. From the get-go, when it came to light that a major trading loss was incurred by a JPMorgan Chase unit in London, Jamie Dimon has worked diligently to ensure that reputation was keep out of the conversation.

• No, the firm did not know these risky 'whale-sized' trades were being executed.
• Yes, management and supervisors failed in their responsibilities.
• Yes, I, Jamie Dimon, made the monumental mistake of having too much faith in the CIO unit and failed to monitor its activities and trade levels;  in turn, I, Jamie Dimon, was wrong to have intimated these feelings to my lieutenants, which apparently led them to follow my lead.
• Yes, those who clearly erred and/or breached their responsibilities, are no longer with the firm.
• Yes, JPMorgan has begun to institute remediation, addressing deficiencies in our internal and supervisory controls.
• No, JPMorgan would never authorize or sign off on such a risky trading strategy - heaven for bid.

Jamie knows it would be hard, if not impossible, to fully recover if his reputation or the reputation of the bank was damaged because regulators and/or the public viewed JPMorgan as a bank that sought to maximize profits - regardless of risk - and then tried to cover up. It will be interesting to see how all this plays out.