MARIA: WELCOME BACK, REVAMPING
THE RULES, THE TRUMP
ADMINISTRATION REPORTEDLY
WORKING ON A MAJOR OVERHAUL FOR
HOW BANKS LEND TO THE POOR,
ACCORDING TO JOURNAL THIS
CHANGES TO DECADES OLD LENDING
MANDATE FOR BORROWERS, JOINING
TO TALK MORE ABOUT DICK MULVAY.
GOOD TO SEE YOU.
>> THANK YOU, MARIA.
MARIA: I WANT TO GET YOUR TAKE
ON THIS AND WHAT IT'S GOING FOR
ENVIRONMENT OUT THERE FOR SURE,
AND YET LONG GROWTH IS NOT
GREAT, TRADING IS STILL NOT
GREAT, WHAT'S YOUR TAKE?
>> WELL, I MEAN, THIS IS THE
MOST FORGETTABLE QUARTER IN
BANKING INDUSTRY AS FAR AS I'M
CONCERNED BECAUSE NO ONE CARES
WHAT'S GOING TO HAPPEN THIS
QUARTER.
BASICALLY NOTHING GOOD IS GOING
TO HAPPEN IN THE QUARTER, YOU
ARE GOING TO GET A WHOLE SERIES
OF CHARGES RELATED TO THE NEW
TAX LAW, CITIGROUP IS GOING TO
HAVE TO TAKE A HIT OF 5 BILLION,
GOLDMAN SACHS 3 BILLION,
JPMORGAN CHASE TO GET THEM
SQUARED AWAY FOR THE NEW TAX
LAW, BUT BENEATH THE ONE-TIME
HITS, YOU'VE GOT VERY WEAK LOAN
GROWTH ACCEPTING CREDIT CARDS
WHICH IS SOARING BUT EVERYWHERE
ELSE IT'S VERY, VERY WEAK, YOU
KNOW, MARGINS HAVE NOT IMPROVED
IN LINE WITH THE INCREASE IN
INTEREST RATES SO THE ONLY THING
DRIVING BANK EARNINGS FROM AN
OPERATING STANDPOINT IS THE
COSTS ARE GOING DOWN.
THE NET OF IS NO ONE AIRS --
CARES ABOUT THE QUARTER, WHAT'S
GOING TO HAPPEN TO GROWTH IN
ECONOMY BECAUSE OF TAX CUT AND
WHAT'S GOING TO HAPPEN TO GROWTH
IN LENDING IF, IN FACT, THE
ECONOMY DOES MOVE A LOT MORE
RAPIDLY.
MARIA: HERE IS WHAT JAMIE DIMON
SAID ABOUT LOAN GROWTH.
>> THAT'S A HARD ONE TO FIGURE
OUT.
PART OF IT, WHEN IT COMES TO
LARGE CORPORATIONS, THEY ALWAYS
HAVE A CHOICE, THEY CAN GET IT
FROM OVERSEAS, VARIOUS THINGS
BUT YOU ARE ABSOLUTELY RIGHT IN
MIDDLE MARKET WHERE YOU WOULD
AGAIN, MAY BE DELAYED, MAYBE
TIMING ISSUE IN LOOKING AT SHORT
RUN.
WHAT YOU'RE GOING TO SEE IS A
BUILD-UP OF INVENTORIES
RECEIVABLES, CAPITAL PROJECTS
AND THEY WILL BE DONE BY
COMPANIES IN THE MIDDLE MARKET
AND NOT JUST LARGE CORPORATIONS
AS A RESULT OF TAX CUTS SO I DO
THINK THAT LOAN GROWTH IS GOING
TO PICK UP.
BUT I THINK THE REAL OPPORTUNITY
I THINK THAT'S GOING TO BE
EXPLOSIVE IN 2018.
I MEAN, IF YOU THINK ABOUT THE
STOCK MARKET, OKAY, AS PRODUCER
NEW SHARES SO THE SUPPLY OF
SHARES ON THE MARKET IS LIMITED.
ON THE OTHER SIDE, THE DEMAND
FOR SHARES IS GOING CRAZY, IN
OTHER WORDS, WE'VE GOT THIS
FEELING ABOUT WHERE PRICES ARE
GOING TO GO OF JUST ABOUT ANY
TYPE OF FINANCIAL ASSET, SO THE
DEMAND FOR SHARES HAVE GONE UP,
THE SUPPLY OF SHARES ARE NOT
GONE UP, SO THE PRICE OF SHARES
HAS INCREASED.
WHEN THAT HAPPENS, THE NEXT STEP
IS TO INCREASE THE NUMBER OF
SHARES AND THAT HAPPENS BEFORE
OF IPO'S, IT HAPPENS BECAUSE OF
EXISTING COMPANIES DO WHAT ARE
INCREASE IN THE NUMBER OF
COMPANIES COMING TO MARKET,
MAYBE SOME OF THE UNICORNS AND I
THINK IT'S GOING TO BE BONANZA
FOR COMPANIES LIKE GOLDMAN SACHS
AND MORGAN STANLEY.
EARNINGS.
DO YOU THINK IT'LL IMPACT THE
BANKS IN '18?
>> WELL, I THINK, THE FOURTH
QUARTER EARNINGS HAS ERASED IN
HISTORY EVEN BEFORE THEY COME
OUT.
IN 2018 YOU SHOULD START TO SEE
COMPANIES LIKE BANK OF AMERICA
AND JPMORGAN THAT HAVE BIG PLAYS
IN THE INVESTMENT BANKING AREA
BENEFITING MEANINGFULLY, YOU
HAVE TO FOCUS ON GOLDMAN SACHS
BECAUSE IT'S THE BANKING TEAM OF
THE UNITED STATES AND ITS
BUSINESS IS GOING TO SOUR AFTER
TEN -- SOAR AFTER TEN YEARS OF
NOTHING.
>> YOU SAID EQUITY MARKETS IN
RUSSIA ARE GOING TO GET HOT
AGAIN, IS THAT DUE TO OIL PRICES
OR WHAT'S DRIVING THAT?
>> IT'S PERPLEXING TO ME.
IT WAS HAPPENING, IT WAS A SURGE
IN EQUITY OFFERINGS EARLIER THIS
BEEN MUCH, MUCH STRONGER THAN
INSIDE.
THE GLOBAL EQUITY OFFERINGS IN
2017 WERE UP 34%, EQUITY
OFFERINGS IN THE UNITED STATES
WERE UP 14%, YOU KNOW, LATIN
AMERICA EXPLODED AND THE NET
EFFECT IT'S GOING TO HAPPEN IN
UP AND WE ARE GOING TO BENEFIT A
IT THERE.
GREAT TO SEE YOU.
THANKS SO MUCH.
WE SHOULD FORGET ABOUT FOURTH
QUARTER BUT IN '18, WE WILL