Recently an acquaintance posted out of frustration something that went like this: “How do you get people to understand that they don’t know what they don’t know…” It comes back to me now as I heard this AM that Jamie Dimon, the banker that saved Wall Street (http://www.thedailybeast.com/newsweek/2009/09/10/the-banker-who-saved-wall-street.html), announced that his firm suffered a $2 Billion dollar loss on synthetic derivatives, and could suffer an additional $1 Billion loss in the next quarter or two (http://www.bloomberg.com/news/2012-05-11/jpmorgan-loses-2-billion-as-mistakes-trounce-hedges.html).
Personally, I don’t see this as an opportunity to vilify Mr. Dimon or the “too big to fail” banks. I see this more as a cautionary tale about the misadventures that ensue when very smart people (perhaps the smartest on the planet), start to believe the stories other people write about them. It’s about what happens when leaders substitute healthy skepticism and good judgement for overconfidence and fail to realize that self-serving bias is pouring sweet honey into thier ears(http://www.psychwiki.com/wiki/Self-serving_bias). Or, maybe it is a tragic story about how unmanageable leviathans, like JP Morgan Chase, are? Can any one man oversee and be held accountable for all the activity that takes place at a complex corporate giant? Either way, I suppose the the moral is the same.