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Q&A with Jamie Dimon on the Future of Finance

29 points by aburan28 11y ago

paganel 11y ago
And what would a guy like Jamie Dimon know about the future of finance? Honest question. If anyone would have said back in October 2008: "hey, guys, in about 7 or 8 years 20% of the world economy is going to be run on negative interest rates" that guy would have been escorted right out of the building, or worse. Guys like Jamie Dimon were (and still are) completely out of the loop, they are in their current position only because the whole show does not run on economics principles anymore, it's all politics and power games. In retrospect, comparing the "dramatic" times of back then (anyone remembering about Hank Paulson crawling and begging in front of a room full of bankers?) to what's happening now I would say that our situation has gotten a thousand times worst (fortunately for common sense there's no Janet Yellen or the current Treasure Secretary crawling in front of a room full of pension fund managers). I mean, I remember that the financial press was going berserk around October 2008 or so because the money market funds had started "to break the buck", as they say, that was unprecedented. (http://libertystreeteconomics.newyorkfed.org/2013/10/twenty-eight-money-market-funds-that-could-have-broken-the-buck-new-data-on-losses-during-the-2008-c.html#.VtarJYX3xsA http://libertystreeteconomics.newyorkfed.org/2013/10/twenty-...) . But just the other day I was reading an article in a recent issue of The Economist (too lazy to search for the link) where, very non-nonchalantly I would say, the author was informing us that the life insurance industry (and I would add the private pensions industry as well as the mutual funds) is in a sort of an existential crisis, as in it cannot guarantee the returns it promised to its policyholders anymore. Crazy enough, the numbers from the article were in fact making sense, and yes, indeed, it seems like the numbers just don't add up anymore for the the life insurance industry (to which I would add the private pensions industry and the mutual funds industry). Problem is, the entire Western capitalistic system is depending on these industries. If they go the way of the dodo (meaning no more guaranteed 4% annual return, at least) then... I don't know what will happen then, I think no-one knows. But, yeah, maybe Jamie Dimon has indeed the answers to one of the biggest (and I would say the most interesting) crisis in the history of capitalism. Trouble is he's as clueless as we are.
- camperman 11y ago
  Couldn't agree more. Dimon is no fool which means the blatant untruths he spews in this puff piece are willful. He doesn't mention the $55bn of taxpayers' money that was given to JP Morgan to buy the crap Bear Stearns was hiding in its balance sheet, nor his role in the naked shorting that helped Bear go down originally. He doesn't mention that his institution is still insolvent because of all of the CDS instruments carried off balance sheet. Oh, and the Whale incident carries stiff penalties. Well it would if Sarbanes-Oxley was actually enforced or the SEC did anything but look at porn all day. Bloomberg should be ashamed of this piece.
- PantaloonFlames 11y ago
  > And what would a guy like Jamie Dimon know about the future of finance? exactly! This is maybe the worst person in the world to ask.
- snowwrestler 11y ago
  > If anyone would have said back in October 2008: "hey, guys, in about 7 or 8 years 20% of the world economy is going to be run on negative interest rates" that guy would have been escorted right out of the building, or worse. In the fall of 2010 I heard Dimon speak about the financial crisis and its aftermath, and among the many topics he covered, he did discuss negative interest rates. Few big institutions came through the financial crisis better than JP Morgan. Personally I would be reluctant to call Dimon clueless.
crdoconnor 11y ago
More about Jamie Dimon: http://www.nakedcapitalism.com/2013/11/jamie-dimon-the-lance-armstrong-of-finance.html http://www.nakedcapitalism.com/2013/11/jamie-dimon-the-lance...
williesleg 11y ago
Wow! This guy really gets it, unlike the clowns running Bank of America.
kafkaesq 11y ago
In case you're wondering -- deep down inside, here's what Jamie Dimon really thinks about that pesky regulation stuff: In a new afterword for the release of the paperback version of her book A Fighting Chance, Warren recalls that the tenor of the conversation between the two policy adversaries soured when Dimon complained about financial regulations that she has supported: When the conversation turned to financial regulation and Dimon began complaining about all the burdensome rules his bank had to follow, I finally interrupted. I was polite, but definite. No, I didn’t think the biggest banks were overregulated. In fact, I couldn’t believe he was complaining about regulatory constraints less than a year after his bank had lost billions in the infamous London Whale high-risk trading episode. I said I thought the banks were still taking on too much risk and that they seemed to believe the taxpayers would bail them out -- again -- if something went wrong. Our exchange heated up quickly. By the time we got to the Consumer Financial Protection Bureau, we weren’t quite shouting, but we were definitely raising our voices. At this point -- early in 2013 -- Rich Cordray was still serving as director of the consumer agency under a recess appointment; he hadn’t yet been confirmed by the Senate, which meant that the agency was vulnerable to legal challenges over its work. Dimon told me what he thought it would take to get Congress to confirm a director, terms that included gutting the agency’s power to regulate banks like his. By this point I was furious. Dodd-Frank had created default provisions that would automatically go into effect if there was no confirmed director, and his bank was almost certainly not in compliance with the those rules. I told him that if that happened, “I think you guys are breaking the law.” Suddenly Dimon got quiet. He leaned back and slowly smiled. “So hit me with a fine. We can afford it.” "Guess What Happened When JPMorgan's CEO Visited Elizabeth Warren's Office" Huffington Post, 3/31/2015, http://huff.to/1CHlXIy http://huff.to/1CHlXIy
- snowwrestler 11y ago
  According to Elizabeth Warren...
  - kafkaesq 11y ago
    I highly doubt she's lying, if that's what you're saying.

29 points by aburan28 11y ago

And what would a guy like Jamie Dimon know about the future of finance? Honest question. If anyone would have said back in October 2008: "hey, guys, in about 7 or 8 years 20% of the world economy is going to be run on negative interest rates" that guy would have been escorted right out of the building, or worse. Guys like Jamie Dimon were (and still are) completely out of the loop, they are in their current position only because the whole show does not run on economics principles anymore, it's all politics and power games. In retrospect, comparing the "dramatic" times of back then (anyone remembering about Hank Paulson crawling and begging in front of a room full of bankers?) to what's happening now I would say that our situation has gotten a thousand times worst (fortunately for common sense there's no Janet Yellen or the current Treasure Secretary crawling in front of a room full of pension fund managers). I mean, I remember that the financial press was going berserk around October 2008 or so because the money market funds had started "to break the buck", as they say, that was unprecedented. (http://libertystreeteconomics.newyorkfed.org/2013/10/twenty-eight-money-market-funds-that-could-have-broken-the-buck-new-data-on-losses-during-the-2008-c.html#.VtarJYX3xsA http://libertystreeteconomics.newyorkfed.org/2013/10/twenty-...) . But just the other day I was reading an article in a recent issue of The Economist (too lazy to search for the link) where, very non-nonchalantly I would say, the author was informing us that the life insurance industry (and I would add the private pensions industry as well as the mutual funds) is in a sort of an existential crisis, as in it cannot guarantee the returns it promised to its policyholders anymore. Crazy enough, the numbers from the article were in fact making sense, and yes, indeed, it seems like the numbers just don't add up anymore for the the life insurance industry (to which I would add the private pensions industry and the mutual funds industry). Problem is, the entire Western capitalistic system is depending on these industries. If they go the way of the dodo (meaning no more guaranteed 4% annual return, at least) then... I don't know what will happen then, I think no-one knows. But, yeah, maybe Jamie Dimon has indeed the answers to one of the biggest (and I would say the most interesting) crisis in the history of capitalism. Trouble is he's as clueless as we are.

camperman 11y ago
Couldn't agree more. Dimon is no fool which means the blatant untruths he spews in this puff piece are willful. He doesn't mention the $55bn of taxpayers' money that was given to JP Morgan to buy the crap Bear Stearns was hiding in its balance sheet, nor his role in the naked shorting that helped Bear go down originally. He doesn't mention that his institution is still insolvent because of all of the CDS instruments carried off balance sheet. Oh, and the Whale incident carries stiff penalties. Well it would if Sarbanes-Oxley was actually enforced or the SEC did anything but look at porn all day. Bloomberg should be ashamed of this piece.
PantaloonFlames 11y ago
> And what would a guy like Jamie Dimon know about the future of finance? exactly! This is maybe the worst person in the world to ask.
snowwrestler 11y ago
> If anyone would have said back in October 2008: "hey, guys, in about 7 or 8 years 20% of the world economy is going to be run on negative interest rates" that guy would have been escorted right out of the building, or worse. In the fall of 2010 I heard Dimon speak about the financial crisis and its aftermath, and among the many topics he covered, he did discuss negative interest rates. Few big institutions came through the financial crisis better than JP Morgan. Personally I would be reluctant to call Dimon clueless.

crdoconnor 11y ago

More about Jamie Dimon: http://www.nakedcapitalism.com/2013/11/jamie-dimon-the-lance-armstrong-of-finance.html http://www.nakedcapitalism.com/2013/11/jamie-dimon-the-lance...

williesleg 11y ago

Wow! This guy really gets it, unlike the clowns running Bank of America.

kafkaesq 11y ago

In case you're wondering -- deep down inside, here's what Jamie Dimon really thinks about that pesky regulation stuff: In a new afterword for the release of the paperback version of her book A Fighting Chance, Warren recalls that the tenor of the conversation between the two policy adversaries soured when Dimon complained about financial regulations that she has supported: When the conversation turned to financial regulation and Dimon began complaining about all the burdensome rules his bank had to follow, I finally interrupted. I was polite, but definite. No, I didn’t think the biggest banks were overregulated. In fact, I couldn’t believe he was complaining about regulatory constraints less than a year after his bank had lost billions in the infamous London Whale high-risk trading episode. I said I thought the banks were still taking on too much risk and that they seemed to believe the taxpayers would bail them out -- again -- if something went wrong. Our exchange heated up quickly. By the time we got to the Consumer Financial Protection Bureau, we weren’t quite shouting, but we were definitely raising our voices. At this point -- early in 2013 -- Rich Cordray was still serving as director of the consumer agency under a recess appointment; he hadn’t yet been confirmed by the Senate, which meant that the agency was vulnerable to legal challenges over its work. Dimon told me what he thought it would take to get Congress to confirm a director, terms that included gutting the agency’s power to regulate banks like his. By this point I was furious. Dodd-Frank had created default provisions that would automatically go into effect if there was no confirmed director, and his bank was almost certainly not in compliance with the those rules. I told him that if that happened, “I think you guys are breaking the law.” Suddenly Dimon got quiet. He leaned back and slowly smiled. “So hit me with a fine. We can afford it.” "Guess What Happened When JPMorgan's CEO Visited Elizabeth Warren's Office" Huffington Post, 3/31/2015, http://huff.to/1CHlXIy http://huff.to/1CHlXIy

snowwrestler 11y ago
According to Elizabeth Warren...
- kafkaesq 11y ago
  I highly doubt she's lying, if that's what you're saying.