Jamie Dimon says “support yourself” for the economic hurricane caused by the Fed-Ukraine war

JPMorgan Chase CEO Jamie Dimon He said he was preparing the largest US bank for an economic hurricane in the near future and advised investors to do the same.

“You know, I said there was a storm cloud, but I’m going to change that … it’s a hurricane,” Dimon said Wednesday at a financial conference in New York. At this point the situation looks “good”, but no one knows if the hurricane is “minor or super storm sandy”.

“You should support yourself,” Dimon told many analysts and investors. “JP Morgan supports ourselves and we intend to make our balance sheet very conservative.”

The stock was struck, starting in the name of a high-flying engineer at the end of last year, as investors are preparing for the end of the Fed’s cheap money era. Decades of high inflation, exacerbated by supply chain turmoil and the coronavirus pandemic, have spread the risk of an inadvertent recession as the Fed fights rising prices.

It bounced off because the stock price plummeted Last few weeks With optimism that inflation may ease, Dimon seemed to shatter hopes of bottoming out.

“It’s sunny so far. Things are going well. Everyone thinks the Fed can handle this,” Dimon said. “The hurricane is right there, on the road, on our way.”

There are two main factors that Dimon is worried about: First, the Federal Reserve signal Reverse the emergency bond purchase program and shrink the balance sheet. The so-called Quantitative Monetary Tightening (QT) is expected to begin this month and will increase to $ 95 billion a month due to lower bond holdings.

“We have never experienced such a QT, so you’re looking at something that can write a history book for 50 years,” Dimon said. Some aspects of the quantitative easing program, including the negative interest rates he called a “big mistake,” “backfired.”

“The system is so liquid that we have no choice,” the central bank said, citing tightening action. “They need to get rid of some of the liquidity to stop speculation, lower house prices and make them like that.”

Another big factor worried about Dimon Ukrainian war Impact on products such as food and fuel. According to Dimon, oil “must rise almost” because of the turmoil caused by the worst European conflict since World War II.

“War gets worse, [they] “We’re going south with unintended consequences,” Dimon said. “We haven’t taken appropriate steps to protect Europe from what happens to oil in the short term.”

“Huge volatility”

Last week, during an investor conference for his bank, Dimon mentioned his financial concerns as follows: “Storm clouds” It can dissipate.Presentations from Dimon and his agent at the all-day meeting Reinforcement JP Morgan shares shares by providing investment details and up-to-date figures on interest income.

But since then, his concerns seem to have deepened.

According to Dimon, the central bank, commercial banks and forex trading companies were the three major buyers of the US Treasury in responding to the 2008 financial crisis. He warned that players would not have the ability or desire to absorb many US Treasuries this time around.

“It’s a big change in the flow of money around the world,” Dimon said. “I don’t know what the impact is, but at least we’re prepared for a lot of volatility.”

One step banks can take to protect themselves in preparation for an upcoming hurricane is to ask clientsNon-operating deposit“Other places, such as money market funds. This can help banks manage their capital requirements under international rules and absorb the surge in non-performing loans.

“With all of this capital uncertainty, we will have to take action,” Dimon said. “I want to re-flow non-operating deposits of the size we can to protect ourselves and serve our customers in bad times. That’s what we’re dealing with. It’s the environment. “

Banks with a “fortress balance sheet” and conservative accounting are the best protection against a recession, Dimon said.

Banks have avoided many federal FHA loan services, he said. Because delinquency can reach 5% or 10% there.

‘Shame on you’

Dimon wept during the one-hour session, slamming topics like his observations and frustrations, “the biggest hits,” and often unleashing them in blasphemous words.

He accused investors of voting with acting advisors like Glass Lewis, who opposed JP Morgan’s board of directors. Recent matters including executive compensation And whether banks should separate the roles of chairman and CEO in the future.

“If that’s your voting method, shame you,” Dimon said. “Seriously, you should be embarrassed. Do your own homework.”

“For litigation, regulation, press, and cookie cutter governance,” he added, companies have been kicked out of the public market.

Meanwhile, other critics often confuse stakeholder capitalism with “awakening,” Dimon said. “I’m a red-blooded free market capitalist and I’m not awake,” he said.

“We’re talking about serving customers, gaining respect, and winning repeat businesses when we wake up in the morning.”

This story is developing. Please check for updates.

Jamie Dimon says “support yourself” for the economic hurricane caused by the Fed-Ukraine war

Source link Jamie Dimon says “support yourself” for the economic hurricane caused by the Fed-Ukraine war

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