Definitely my highlight of the day. Jamie Diamond, a lot to talk about.
Jp morgan chair and chief executive, thank you so much for hosting us again
at your global market conference. What's market turbulence looking like
right now? So we have the CPI print yesterday
markets rally. Are they're getting ahead of themselves.
Yeah. So
I wouldn't call it turbulence. We've got we've had good healthy markets
for quite a while. You know, they kind of predicting a soft
landing and you see that in both stock prices, which are kind of high credit
spreads, which are kind of low market, is kind of wide open.
That's all good. Doesn't tell you the future is going to
be negative point. A lot of times in history where that was
true and the next year it wasn't true. And so, you know, we'll see.
I don't pay as much attention to monthly numbers as most people do.
I know. So what do you think the future is for
inflation? And I'm a little more worried about it.
I mean, you know, we've had very big fiscal deficits and, you know, I think
the underlying inflation may not go away the way people expect it to.
And I look at the future like a lot of things we look at are kind of
inflationary in the green economy, the re militarization of the world, the
infrastructure requirements, the restructuring of trade, fiscal deficits.
So I think there are a lot of inflationary forces in front of us that,
you know, may keep a little bit higher than people expect.
So the surprise would be rates are higher, inflation is a bit higher, and
maybe that will slow growth. And it obviously it's your policy.
It's a whole different issue that that can that could be determinative in what
our economy does next year. And we just we're just not going to
know. But does that mean you think it's 5050
whether the Fed cuts or hikes and, you know, next time around, next month, I
really don't pay that much attention. The Fed will have to follow the data.
And I don't know what the data is going to say.
But they I think, you know, they are doing the right to be patient right now.
So you see what's going to happen. They may not know for a couple of
months, but no big correction. I mean, if you don't pay that much
attention to it, it means you're not worried about it.
You know, I'm worried. I just said stocks are very high.
Either the chair's inflation is getting higher, rates going up or higher than
people think. So I think the change my view is
whatever the world is pricing in for a soft landing, I think it's probably have
that. I think the chance of going wrong is
higher than people think in the US, but globally
in the US. But also that could affect global.
Yeah. And so that what does that mean for
markets maybe down and credit spreads we've got gap out too.
Why is the market not pricing that in you know.
Not a happy talk. Where does that happy talk come from?
Low rates, central banks and reduced rates.
You know, maybe the geopolitical things disseminated don't cause problems.
And so, you know, the future isn't predictable like that.
So I you know, I'm a student of history. I've watched all the inflection points
go back. And my dad was a stockbroker.
I go back to the booming markets 72 and the collapse of 74, the healthy markets
of 80, the collapse of 82, you know, the 1987 market crash, the 1990 real estate
crash, the and almost all of them were not predicted the year before.
So I look at the factors that drive these things.
You're not always known as a company would prepare for all of this.
We can serve all our clients right regardless.
But what do you see as the main stress right now?
Because if it's geopolitics, we talk about it, it's just not really priced
in. We're just we're does is it distress?
Is it something actually going under that you worry about or just a multiple
factors coming in? Let's say?
I think geopolitics could create the main stress that we're worried about in
terms of oil and gas prices, our trade alliances.
But I think the surprise would be higher rates because inflation didn't go down
than inflation has been stubborn, maybe even bounces up next year.
I think inflation next year may be in the cards, may have nothing to do with
what you're seeing today. So, I mean, that to me is the surprise.
If you're at higher rates and, God forbid, stagflation.
Yeah, you'll see stress in real estate and leveraged companies and some private
credit and things like that. So is unpredictability the new normal?
I think it's been the norm my whole life, has it not?
Worse now know what happens between China and the US and what does that mean
for for your appetite of being China? Yeah.
So the geopolitical situation is very tense to work.
The Ukraine and Russia. I ran the terrorist activities in
Israel, North Korea, nuclear blackmail. We've never had nuclear blackmail
before. And this is, of course, affecting our
relations with China. And, you know, it's pretty hard of a
great relate to China is Ukraine war zone.
We're kind of in different sides of that and put put Taiwan aside.
Having said that, I think it's the right thing for America to fully and deeply
engage with China. You know, competitively, you know, every
nation is going to do it's in their own interest, national security.
So should America. We should define that fairly and
properly. It is unfair trade, you know, negotiate
that or do whatever you need to do. But engagement is the right thing to do.
China is not a natural enemy. The United States, they have a lot of
their own problems. So, you know, to me, we we can work
together as best we can and then we have common interests, climate, antinuclear,
perforation, anti terrorism. What does it mean for a bank working in
China actually, given all of this volatility and cautious?
I mean, you know, China you look at China from a risk of war, bases used to
be very good. It's not so good anymore because all
these things can go wrong. And remember, we bank I mean, I've got
the number, but 1500 multinationals in China, they're not leaving China to
ensure our clients there. We're just much more cognizant the risk
is higher. And I put Hong Kong in that bucket, too.
You know, we will look at China. Hong Kong is one at this point.
From a risk standpoint, what does the Trump administration mean for the US
economy? I don't know.
You know they're big. Why?
Because it's unpredictable or because we're too soon to actually try and
trying to figure out the policies that we put in place.
So if you look at history, who was elected president may not necessarily
affect the next year. That's kind of like we're a big tanker
and that's going to happen. I think the much more important thing is
what we do in the geopolitical situation.
You know, I've always been quite clear that American leadership is provided to
keep the world free and safe for democracy.
And that means economic alliances, which include trade, by the way.
I think we should spend more time in trade.
It means NAITO. It means that Russia should not win in
Ukraine because if they do, I think it could tear asunder this Western world.
I know you've ruled out being Treasury secretary.
Why? What would it take to get you into
politics? I don't think I'm suited for politics.
I love my job, you know, And so I'm not sure I want to do something like that.
And I can hope even if you got the call, you would it be hard to say no?
I don't know. I probably yes, I love my job and I have
no interest in leaving or doing anything else.
So we're in France at a global markets conference.
What are you expecting from Basel three? What would Jay Powell put in place?
New rule book, I should mention, by the way, because President Macron has done
an outstanding job here. Pro-business.
Got it. To move our trading floors here.
You know, he wants to grow his economy. There's much more innovation.
We had a thing last by innovation. So, look, Basel three, we've been quite
clear. We thought it was excessive, not well
thought through. I would love to know what the endgame
is. What are they trying to accomplish with
private credit? What are they trying to accomplish with
a given? The other day, 80% or more has left the
system and now the government is talking about having a bailout system for
mortgage companies because they're no longer the bank that has the ability to
provide liquidity in tough markets. Now, that would be the same thing in
market making. So they're looking at it.
You know, I trust Jay Powell to look at and analyze what they need to do.
How do you do the other thing, which I'm not sure, what do you think is the job?
I have no idea. And it may end up in a lawsuit or
something like that. But but the amazing thing to me is that
America ended up the end game, 30% more capital in the European bank in America.
And I just why we argue about international standards and then we
simply don't do them. And also, I think the regulation is the
question what do you want? How do you want the system to work?
Do you want it to be private credit and public credit?
Do you want mortgage out of the banks? Just dictate it.
That's the goal. Just dictated.
If you don't want leverage in the bank, just dictate it.
You know, I think, you know, we are guardians of the financial system.
You know, we bank we bank 100 countries. And, you know, we're on the ground in 60
countries, know we do great work for cities, schools, states, hospitals,
solar, wind, climate. Middle market companies.
Is that what they don't want? They do want you know, they want to make
it more X, but they know. Are they still trying to figure it out?
I think they've got to figure it out. I don't think it's quite clear from any
what they did. You guys should read it and write about
it. There was no detailed analysis about
cost benefit, what they're trying to accomplish, what the outcome would be.
And that's why we're asking you, right, Jamie?
Talking about France. So you're positive on the president?
Emmanuel Macron. I also know that you are the Choose
France event on Monday. If he relax labor laws, would you hire
more in this country? He did relax labor laws, but if he
relaxed more the possible you know, we have a thousand people here.
We have large trading floor is here with trade.
I've got number five or five or six or seven $8 million a day.
When you have a thousand people, you tend to hire more and more technology
more. And that's been true for us.
I've been to Jp morgan, which have a are very competent, good people and you have
hiring and capability and friends. You tend to do more things there.
So my view is we will be doing more things here.
And it was the tax law they put in place, the regulations they put in
place, the labor flexibility they put in place.
Those things do make a difference. And very importantly, they don't just
lift up JPMorgan here. We pay a lot of taxes here which help
lift up all citizens. I don't think President Macron did that
for JPMorgan. He did this.
He knows this country needs to grow, bring it innovation.
And that's how you that's how you build a better country.
So the chief executive of the largest wealth fund in the world says that
actually America is doing much better because Americans are less lazy or work
harder than the Europeans. I mean, is that fair?
Is that regulation? I hate total blanket statements like
that. I know a lot of Europeans who work hard,
but I think when you see the things that work hours, I think it is somewhat true
Americans are hard working Anywhere you go around America is hard working.
But I see that here, too, I don't think. And the innovation people meet the
challenges or the innovation people in the United States.
So you also in in terms of headcount in the UK, I think it's at the highest it's
ever been. And you're also doing you're giving
money to try and retrain. You have recently met with possibly the
next prime minister because he's so far advanced in the polls.
What do you think? Yeah, look, I like the fact that both
the Conservative and the Labor governments are talking about
pro-business, simpler regulations, getting more innovation, the country
becoming competitive. And we all need that.
We all have too much debt. Growth is the best anecdote for Antidote
for Everything. And so having a growth strategy is good
for a country and it's good for the lower income people.
And this training stuff is maybe the most important is good training jobs.
That first job is a first among the ladder creates dignity, you know, more
at home household formation. And I think countries have to do more of
that because if they don't, you know, you can have a tough time.
But do you think the UK economy will change under Labour?
I don't know yet, but I was I was happy with what they were talking about.
When you had Rachel Reeves come to a conference too, that they're all talking
from the playbook. We need growth, simpler regulations,
more capital formation, more capital investment in property taxation because
that's the way to help our whole country and our citizens.
So that is what we should all be doing. Jamie Dimon, we talk around, you know,
India all the time. Is this the decade for India?
And and does it somehow counterbalance China for, you know, world growth?
Yeah, look, I think India has done a very good job.
And, you know, you look at India, yes, it should have a very bright future.
I'm not saying as a counter to China, but a very bright future.
And I think we should all be reaching out to India.
You know, they have to stay non-aligned because the kind of where they are in
the world between Russia and China. But, you know, there are democracy,
there are natural friend of America and the Western world, and we should all be
helping them. And they they've made a lot of changes.
Their infrastructure transfer payments, seven or eight names,
your bank accounts that are going to be very good for their country.
So what does that mean for Jp morgan? Well, we're not we're not in the retail
business there, but we will you be in the we have 60,000 employees there.
We've got big campuses, high technology, and we're spending or trading or
research or investment banking. Yeah, we're there in a big time.
Can you talk to me a little bit about Jp morgan and how you mean you've had a
number of high profile departures. How does that change?
Actually, the way you focus your business and how you run things going
forward? Not at all.
Nothing. Zero.
If you were to buy anything, what would you buy?
Oh, that's different. We we look, we we have we can't buy
banks. You do know that.
So, you know, you could buy a European bank, could you?
I, I wouldn't even try. I think the American we like.
You hate it. I think the regulators.
You would hate it even if they said, go ahead and do it.
I'd probably be in court seeing things for a year and a half.
Here's a distraction. My own company, I'd rather just say we
want to add clients in this country and clients that will add bankers and
technology and branches. It's just a better way for us to grow.
Okay. But if there was if you could buy
anything, I mean, it's not a bank like you.
It. But you're thinking of something.
Yeah. We always look at stuff.
You know what? We're not looking at any major
acquisitions. I like that technology.
I think what we're doing, we're adding literally in Zurich, we have Investor
Day next week, we're adding retail and wholesale branches.
We're adding them in the United States, where almost all the major hundred
cities there are now, we're adding commercial banking all over Europe and
Asia. We're adding technology around payments
and even a blockchain called Onyx to move data and maybe move money one day.
We're constantly investing. We have 200 people, 2000 people, AI and
machine learning for each case is on the way too.
I know. So if I speak to you in five years, how
much bigger and how much do I probably be speaking to a fake diamond who's just
answering a question? Avatar and Avatar.
Yeah. Do you think about technology a lot?
Yes, all the time. Every meeting we have that's been true
my whole life. When we have any magic meeting.
Your technology is on the table. That includes AI cloud, just more
analytics. What do you do to do things better,
faster, quicker for clients? Digital, you know, a huge amount of
digital services, integrating them better, automating them better.
But that much I mean, that will change, I guess, the heart of banking.
Does that mean that you'll see more winners and losers because of the
technological advancements? So technology's always changed the heart
of banking, moving money, holding money, advising, money, raising.
That won't change. And you have to do that according to
rules, laws, regulations by country will change is how you deliver it.
So right now, you go on your phone, you can move money and buy stocks.
That wasn't true 20 years ago. So, yes, everything you do will change
with the technology, but you still have to move money, budget, raise money, make
investments, etc.. So, you know, the core won't change.
But will it change? Regulations may change that too,
obviously. So in the US.
So again, would a Trump presidency be more favorable to banks when it comes to
regulation? You know, I don't I don't know.
I mean, you know, I am unhappy with the amount of rules and regulations coming
out today. I don't know where the second
administration of either one would do. I'm hopeful that they focus on growth,
which good for the citizens, what's good for the country.
And I would help anyone I can to do that for my country.
I'm quite patriotic about that. And I do think you need it in terms of
service. I think you need help in helping as a
bank. It's good to get that clear.
Exactly.