Chasing the Advantage

On July 14, JPMorgan posted quarterly earnings that showed the firm’s core businesses were healthy. Excluding significant items, the bank earned $16.9 billion, or $6.14 per share, and produced a 23% return on tangible common equity. Managed revenue reached $58.0 billion, while equities revenue jumped 86% from a year earlier. CEO Jamie Dimon’s verdict? “It’s getting close to as good as it gets.” Days later, however, he said he would “absolutely not” buy the broad stock market at current prices and would not buy long-dated Treasurys. So why would the person running this machine refuse to bet on the conditions producing its success?

Enter the concept of informational control. Traditional control asks whether the organization hit its targets, which JPMorgan clearly did. Informational control, on the other hand, goes further by asking whether the assumptions beneath the strategy still hold, even when the results look excellent. This helps clarify why Dimon could call things “close to as good as it gets” and days later refuse to buy the market he runs. His warning that geopolitical conflict, sticky inflation, fiscal deficits, and elevated asset prices were moving beneath the surface “like tectonic plates” does not reject the quarter’s performance. It questions whether that performance can safely be projected forward. The financial results are a single-loop signal: the current system is working. Refusing to extrapolate from them is double-loop learning: management is still examining whether the system fits the environment. Compared with GE’s “success theater,” where bad news became difficult to voice, Dimon’s public caution is almost the opposite.

Through the lens of informational control, though, I’d be cautious about assuming JPMorgan has completed the learning loop. While informational control can identify assumptions that deserve scrutiny, it does not determine the response. Dimon named the risks without announcing a visible strategic shift. That may reflect disciplined patience or simply a CEO protecting his credibility in case markets turn. Either way, the real test is not whether JPMorgan can describe the tectonic plates. It is whether the bank changes course before they collide.