Like most soft-spined Americans, you probably have painful memories of the financial crisis and consequent recession. Perhaps you even think of those things as "bad." Fortunately, Jamie Dimon is not like the rest of you losers.
That is because, unlike you, Jamie Dimon is CEO of JPMorgan Friggin' Chase, America's greatest bank, which just so happens to snack on financial crises and recessions like so much KIND bar.
"This bank is anti-fragile, we actually benefit from downturns," Dimon bragged to his bank's investors at a conference on Tuesday.
And it is true! The bank definitely benefited from the last downturn. It got to buy Bear Stearns in a government-backed fire sale, getting itself a brokerage business on the cheap in exchange for shouldering only a few tiresome legal burdens. It also got billions of dollars in government handouts, from $25 billion in TARP funds to billions in savings from low-interest-rate borrowing programs to a permanent subsidy arising from the idea that the government will bail out the bank if it ever gets in trouble.
That permanent subsidy amounts to about $17 billion per year, according to a recent Bloomberg View study, representing nearly all of the bank's profits. No other bank gets such a large subsidy, according to Bloomberg's study (although, to be fair, some find Bloomberg's methods unsound, to quote from Jamie Dimon's favorite movie).
Of course, this may not have been the sort of benefit Dimon was talking about. Instead, he has repeatedly opined that his bank thrived -- was in fact a "port in the storm" -- during the downturn simply because it was so gigantic.
Funny enough, JPMorgan is sometimes not at its tip-top best when things are actually looking up. For example, it managed to lose $6 billion on credit default swaps last year, at a time when markets were doing just fine. So maybe "anti-fragile" is not the best term for JPMorgan?
Dimon's use of that term did not go unnoticed by another Jedi master of self-regard, Nassim Taleb, whose latest book is called, wait for it, "Antifragile." According to Taleb, being "antifragile" means, if I'm summing this up correctly, being able to not only withstand but thrive in adversity, particularly of the unexpected, "black swan" variety. Taleb thinks our institutions and people are not antifragile. And he apparently does not agree that Dimon's bank fits the definition of antifragile, either. Taleb tweeted:
MY NIGHTMARE ! RT @erikschatzker Dimon channels Taleb: "This bank is anti-fragile. We actually have benefited from downturns."— Nassim N. Taleb (@nntaleb) February 26, 2013
And then followed up:
What Kills the system makes Dimon stronger.— Nassim N. Taleb (@nntaleb) February 26, 2013
Update: Apparently, Dimon had only just begun to namecheck Taleb's books. According to CNBC's Kayla Tausche, Dimon later cited Taleb's most famous book, "Black Swan:"
Dimon calls #Europe a black swan and a rollercoaster. On the latter, "sometimes you feel good, sometimes you feel sick to your stomach."— Kayla Tausche (@kaylatausche) February 26, 2013
Business Insider's Joe Weisenthal retweeted Tausche, to which Taleb replied:
Taleb accused Dimon of:
@thestalwart misuse of "black swan" (not Europe) and antifragile (he is taking it from taxpayer)— Nassim N. Taleb (@nntaleb) February 26, 2013
In other words, Taleb is telling Dimon, you can't call yourself "anti-fragile" if you thrive in crises mainly because of the good graces of the taxpayer.
1. Comparison shop
Make a list of the fees and rates at your current bank, then look at what others have. Start with our rates page, where you can compare <a href="http://www.moneytalksnews.com/rates/" target="_hplink">interest rates</a> on checking accounts, money market funds, savings accounts, mortgages, and other loans. But don't forget to factor in other conveniences, like hours and the proximity of branches. Don't overlook <a href="http://www.moneytalksnews.com/2010/09/30/7-reasons-you-should-join-a-credit-union-this-week/" target="_hplink">credit unions</a>, either. They often offer higher savings rates and lower loan rates than the megabanks. Search for them at the <a href="http://www.creditunion.coop/" target="_hplink">Credit Union Association</a> site.
2. Negotiate with your current bank
If you have a mostly happy history with your current bank, take the best offer from your comparison shopping and throw it back at them to see if they'll cut you a break on fees or hike your savings rates. As a longtime customer, you have a little leverage.
3. Get a "switch kit"
If you do decide to leave, ask your new bank or credit union for a "switch kit." These often come with step-by-step instructions, contact info, and forms to transfer services like direct deposits and automatic payments. But even so, <a href="http://defendyourdollars.org/press_release/cu-report-switching-banks-hard-for-consumers" target="_hplink">Consumers Union says</a>, "Re-routing automatic payments and deposits into a new account can take four to six weeks."
4. Don't close the old account yet
You may be in a rush to conclude business with your old bank, but it's important to make sure your transition is seamless - missing payments, misplaced deposits, or delays can end up costing you. Leave a cash cushion to cover payments you may have forgotten. Wait three months to close the account completely, or at least until you're absolutely sure all's well. If there are fees associated with transferring your balance - Consumers Union says to expect "$7 to $10 for certified checks and from $24 to $30 for a wire transfer" - you might skirt them by moving money gradually, withdrawing up to allowed limits and depositing the cash to the new account. Using cash more frequently than plastic can also help.
5. Watch the new account
Keep a keen eye on your new account, checking it daily for the first few weeks. Be sure all your regular deposits are coming in and all your bills are being paid from the proper account. You also want to get familiar with your new bank's quirks, like how long deposits take to clear and how it lists your balances and transactions, to avoid trouble.
Make sure you go over all the paperwork relevant to your new account, so you don't get tripped up by processes that differ from your old bank, hidden fees, or upcoming changes. And keep a list of these, since you may want to re-evaluate your new bank sooner rather than later - especially if the government actually does make it easier to switch. Beware of switching again too soon: Consumer Reports says several banks charge $25 fees for closing within the first six months.