Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Definitely my highlight of the day, Jamie Diamond, a lot
Speaker 2: to talk about. JP Morgan, Chair and chief Executive, Thank
Speaker 2: you so much for hosting us again again at your
Speaker 2: Global market conference. What's market turbulence looking like right now?
Speaker 2: So we have the CPI print yesterday, markets rally are
Speaker 2: there getting ahead of themselves?
Speaker 1: Yeah, so I wouldn't call it turbulence, and we've got
Speaker 1: We've had good, healthy markets for quite a while. You know,
Speaker 1: they're kind of predicting a soft landing. And you see
Speaker 1: that in both Dock prizes, which are kind of high
Speaker 1: credit breads, which are kind of low markets, which a
Speaker 1: kind of wide open that's all good, doesn't tell what
Speaker 1: the future is going to be. Magott point a lot
Speaker 1: of times in history where that was true and the
Speaker 1: next year wasn't true. And so you know, we'll see.
Speaker 1: I don't pay as much attention to monthly numbers as
Speaker 1: most people.
Speaker 3: Do, I know, So what do you think the future
Speaker 3: is for inflation?
Speaker 1: And I'm a feeling more worried about it. I mean,
Speaker 1: you know, we've had very big fiscal deficits, and you know,
Speaker 1: I think the underlying inflation may not go away the
Speaker 1: way people expected to. And I look at the future
Speaker 1: like a lot of things. We look at a kind
Speaker 1: of inflationary in the green economy, the remilitarization of the world,
Speaker 1: the infrastructure requirements, the restructure of trade, fiscal deficits. So
Speaker 1: I think there are a lot of inflationary forces in
Speaker 1: front of us that you know, may keep it a
Speaker 1: little bit higher than people expect. So the surprise would
Speaker 1: be rates are higher, inflation a little bit higher, and
Speaker 1: maybe that'll slow growth. And obviously geo politics a whole
Speaker 1: different issue that can that could be determinative in what
Speaker 1: our commy does next year, and we just we're just
Speaker 1: not going to know.
Speaker 2: But does that mean you think it's fifty to fifty
Speaker 2: whether the FED cuts or hikes at.
Speaker 3: You next time next one.
Speaker 1: I really don't pay that much tense to that. The
Speaker 1: FED will have to follow the data, and I don't
Speaker 1: know what the data is going to say, but they
Speaker 1: I think, you know, they are doing the right to
Speaker 1: be patient right now, see see what's going to happen.
Speaker 1: They may not know for a couple of months.
Speaker 3: But no big correction. If you don't pay you know
Speaker 3: that much attention to it. It means you're not worried
Speaker 3: about it, not moored.
Speaker 1: I just said, doctor, are very high, either the chances
Speaker 1: of inflation staying higher or race going up, or higher
Speaker 1: than other people things. So I think the chance, my
Speaker 1: view is whatever the world is pricing it for a
Speaker 1: soft landing, I think it's probably half that. I think
Speaker 1: the chance of something going wrong is higher than.
Speaker 3: People think in the US globally, well.
Speaker 1: I say in the US, but also that could affect globally.
Speaker 3: Yeah, and so that what does that mean for market?
Speaker 1: There'd be down and credits president' got gap out?
Speaker 3: So why is the market up pricing.
Speaker 1: That in a lot of happy talk?
Speaker 3: Where does that happy talk come from?
Speaker 1: Low rates, central banks and reduced rates? You know, maybe
Speaker 1: the geopolitical things disseminate, don't cause problems, and so you know,
Speaker 1: the future isn't predictable like that. So you know, I'm
Speaker 1: a student of history. I've watched all the inflection points
Speaker 1: that you go back, and my dad was a stock broker.
Speaker 1: I go back to the booming markets seventy two and
Speaker 1: the collapse of seventy four, the healthy markets of eighty
Speaker 1: the collapse of eighty two. You know the ninth the
Speaker 1: eighty seven crash, the nineteen ninety real estate crash, and
Speaker 1: almost all of them were not predicted the year before.
Speaker 1: So I look at these factors that drive these things
Speaker 1: are not always known. As a company, we prepare for
Speaker 1: all of us. We can serve all our clients regardless.
Speaker 3: But what do you see as the main stress right now?
Speaker 2: Because if it's geopolitics, we talk about it, it's just
Speaker 2: not really priced it.
Speaker 3: Where does is it distress? Is it something actually going.
Speaker 2: Under that you worry about, or just a multiple factors
Speaker 2: coming out at the same time.
Speaker 1: I think, well, geopolitics could create the main stress that
Speaker 1: we're worried about in terms of oil and gas prices
Speaker 1: or trade alliances. But I think the surprise would be
Speaker 1: higher rates because inflation didn't go down, that inflation has
Speaker 1: been stubborn and maybe bounces up next year. I think
Speaker 1: inflation next year may be in the cards, may have
Speaker 1: nothing to do with what you're seeing today. So that
Speaker 1: to me is the surprise. If you at higher rates
Speaker 1: and God forbid stagflation, Yeah, you'll see stress in real
Speaker 1: estate and leverage companies and some private credit and things
Speaker 1: like that. So it's unpredictability is in your normal I
Speaker 1: think it's been the enormous since my whole life have it.
Speaker 3: It's not worse now.
Speaker 2: No what happens between China and the US, and what
Speaker 2: does that mean for your appetite of being China.
Speaker 1: Yeah, so the geopolitical situation is very tense, for the
Speaker 1: more the Ukraine and Russia, Iran, the terroors, activities in Israel,
Speaker 1: North Korea, nuclear black mail. We've never had nuclear black
Speaker 1: mail before. And this is of course affecting our relationship
Speaker 1: with China, and you know, it's gonna be hard to
Speaker 1: have a great relations with China. The Ukraine war zone,
Speaker 1: we're kind of in different sides of that, and put
Speaker 1: Taiwan aside. Having said that, I think it's the right
Speaker 1: thing for America to fully and deeply engage with China,
Speaker 1: you know, competitively. You know, every nation is going to
Speaker 1: do it's in their own interest in national security, social America.
Speaker 1: We should define that fairly improperly. If it's unfair trade,
Speaker 1: you know, negotiate that or do whatever you need to do.
Speaker 1: But the engagement is the right thing to do. China
Speaker 1: is not the natural end of the United States. They
Speaker 1: have a lot of their own problems. So you know,
Speaker 1: to me, we could work together as best we can
Speaker 1: and then we have common interest climate, anti nuclear referation,
Speaker 1: anti terrorism.
Speaker 2: What does it mean for a bank working in China? Actually,
Speaker 2: given all of this volatility, they're cautious.
Speaker 1: I mean, you know China, if you look at China
Speaker 1: from a risk of war basis, it used to be
Speaker 1: very good. It's not so good anymore because all these
Speaker 1: things can go wrong. And remember we bank I mean,
Speaker 1: I've got the number, but fifteen hundred multinationals in China.
Speaker 1: They're not leaving China, so who are going to serve
Speaker 1: our clients there? We're just much more cognizant that the
Speaker 1: risk is higher. I might put Hong Kong in that
Speaker 1: bucket two. You know, we kind of look at China
Speaker 1: Hong Kong as one at this point from a risk standpoint.
Speaker 2: What does a Trump administration mean for the US economy?
Speaker 1: I don't know, you know, they're.
Speaker 2: Why because it's unfreakictable, or because we're too soon to
Speaker 2: actually try trying to figure out the policies that he
Speaker 2: leaves put in place.
Speaker 1: So if you look at history, who was elected president
Speaker 1: may not necessarily effect the next year. That's kind of
Speaker 1: like we're a big tanker and that's going to happen.
Speaker 1: I think the much more important thing is what we
Speaker 1: do in the geopolitical situation. You know. I've always been
Speaker 1: quite clear that American leadership is provided to keep the
Speaker 1: world free and safe for democracy, and that means economic alliances,
Speaker 1: which includes trade. By the way, I think we should
Speaker 1: spend more time in trade. It means NATO. It means
Speaker 1: that Russia should not win in Ukraine, because if they do,
Speaker 1: I think it can tear us under this Western world.
Speaker 2: I know you've ruled out being Treasury secretary. What would
Speaker 2: it take to get you into politics?
Speaker 1: I don't think I've suited for politics. I love my job,
Speaker 1: you know, and I'm not sure I want to do
Speaker 1: something like that. And I can hope.
Speaker 3: Even if you got the call, would it be hard
Speaker 3: to say no?
Speaker 1: I don't know. Probably yes, I love my job, and
Speaker 1: I have noticed in even of doing ZIDL.
Speaker 2: So what we're in France at a global markets conference.
Speaker 2: What are you expecting from Bazel three? What will Ja
Speaker 2: Powell put in place?
Speaker 3: And you rule book?
Speaker 1: I should mention, by the way, because President McCrone has
Speaker 1: done an outstanding job here. Pro Business got us to
Speaker 1: move our trading floors here. You know, he wants to
Speaker 1: grow his economy. There's much more innovation. We had a
Speaker 1: thing lasts by a lot of innovation. So look Basil three.
Speaker 1: We've been quite clear. We thought it was excessive, not
Speaker 1: well thought through. I would love to know what the
Speaker 1: endgame is. What are they trying to accomplish with private
Speaker 1: credit or are they trying to accomplish with like even
Speaker 1: the other day, eighty percent of more has left the system,
Speaker 1: and now the government's talking about having a bailout system
Speaker 1: for mortgage companies because they're no longer in a bank
Speaker 1: that has the ability to provide liquidity in tough markets.
Speaker 1: That would be the same thing in market making. So
Speaker 1: they're looking at it. You know, I trust Jay Powell
Speaker 1: to look at and analyze what they need to do,
Speaker 1: how they need to do it. The other thing, which
Speaker 1: I'm not sure the Europeans no, I have no idea,
Speaker 1: and it may end up in a lawsuit or something
Speaker 1: like that. But the amazing thing to me is that
Speaker 1: America ended up through the endgame thirty percent more capital
Speaker 1: than the European bank in America, And I just why
Speaker 1: we argue about international standards and then we simply don't
Speaker 1: do them. And also I think the regulation answer the
Speaker 1: question what do you want how do you want the
Speaker 1: system to work? Is do you want it to put
Speaker 1: private credit a public credit? Do you want mores out
Speaker 1: of the banks? Just dictated? If that's the goal, just dictated.
Speaker 1: If you don't want leverage landing the bank just dictated.
Speaker 1: You know, and I think you know we are guardian
Speaker 1: into the financial system. You know, we bank, you know,
Speaker 1: we bank one hundred countries and you know we're on
Speaker 1: the ground of sixty countries. You know, we do great
Speaker 1: work for cities, schools, states, hospitals, soul or when climate
Speaker 1: middle market companies, is that what they don't want or
Speaker 1: they do want, you know, they want to make it.
Speaker 3: More experienced, they know? Are they still trying to figure
Speaker 3: it out?
Speaker 1: I think they've got to figure it out. I don't
Speaker 1: think it's quite clear from any now. So they did.
Speaker 1: You guys should read it and write about it. There
Speaker 1: was no detailed analysis about cost benefit, what they're trying
Speaker 1: to accomplish, what the outcome would be.
Speaker 2: That's why that's why we're asking you, right, Jamie, talk
Speaker 2: to me about front. So you're you're positive on the president.
Speaker 2: I also know that you were the chiefs Frants event
Speaker 2: on Monday. If he relacs labor laws, would you hire
Speaker 2: more in this country?
Speaker 1: He did relax labor laws, but if he relack some
Speaker 1: more possibly, you know, we now have a thousand people here,
Speaker 1: we have large trading or here was straight. I've got
Speaker 1: the number five or eight, five or six or seven
Speaker 1: eight hundred million dollars a day. When you have a
Speaker 1: thousand people, you tend to hire more and more technology more,
Speaker 1: and that's been true for us since I've been at
Speaker 1: JP Morgan. Once you have a very competent group of
Speaker 1: people and you have hiring and capability and friends, you
Speaker 1: tend to do more things there. So my view is
Speaker 1: we will be doing more things here. And it was
Speaker 1: the tax leader they put in place, the regulations they
Speaker 1: put in place, the labor flexibility they put in place.
Speaker 1: Those things do make a difference, and very importantly, they
Speaker 1: don't just lift up JP Morgan here. We pay a
Speaker 1: lot of taxes here which help lift up all citizens.
Speaker 1: I don't think President Macrohane did that for JP Morgan.
Speaker 1: He did because he knows his country needs to grow,
Speaker 1: bring it innovation, and that's how you build a better country.
Speaker 2: So the chief executive is the largest wealth fund in
Speaker 2: the world, says that actually America is doing much better
Speaker 2: because Americans are less lazy or work harder than the Europeans.
Speaker 3: I mean, is that fair? Is that regulation?
Speaker 1: I hate total blanking statements like that. I know a
Speaker 1: lot of Europeans who work hard, but I think when
Speaker 1: you see the things about work hours, I think it
Speaker 1: is somewhat true. Americans are hard working. Anywhere you go
Speaker 1: around Americas is hardworking. But I see that here too,
Speaker 1: I don't think. And the innovation people you meet the
Speaker 1: working just as hard as the innovation people in the
Speaker 1: United States.
Speaker 2: So you also in terms of headcount in the UK,
Speaker 2: I think it's at the highest that it's ever been.
Speaker 2: And you're also doing you're giving money to try and retrain,
Speaker 2: and you've recently met with possibly the next Prime minister.
Speaker 3: E see so far advance in the polls. What do
Speaker 3: you think?
Speaker 1: Yeah, Look, I like the fact that both the conservative
Speaker 1: and the labor governments are talking about pro business, simpler regulations,
Speaker 1: getting more innovation in the country, becoming competitive and we
Speaker 1: all need like we all have too much debt. Growth
Speaker 1: is the best anecdote for antidote for everything, and so
Speaker 1: having a growth strategy is good for a country and
Speaker 1: it's good for the lower income people. And this training
Speaker 1: stuff is maybe the most important is get training jobs.
Speaker 1: That first job as a first run in the ladder
Speaker 1: creates dignity, you know, more home household formation, and I
Speaker 1: think countries have to do more of that because if
Speaker 1: they don't, you know, you can have a tough time.
Speaker 3: But do you think the UK Commy will change under Labor?
Speaker 1: I don't know yet, but I was. I was happy
Speaker 1: with what they were talking about. We had Rachel Reeves
Speaker 1: come to our conference too that they're all talking from
Speaker 1: the playbook. We need growth, simpler regulations, more capital formation,
Speaker 1: more capital investment in proper taxation because that's the way
Speaker 1: to help our whole country and all our citizens. So
Speaker 1: that is what we shall all be doing.
Speaker 2: Jimmie Dunman, we talk around, you know, India all the time.
Speaker 2: Is this a decade for India and does it somehow
Speaker 2: counterbalance China for you know, world growth?
Speaker 1: Yeah, Look, I think India has done a very good job.
Speaker 1: And you know, when you look at India, yes, it
Speaker 1: should have a very bright future. I'm not saying as
Speaker 1: account in a China, but a very bright future. And
Speaker 1: I think we shall all be reaching out to India
Speaker 1: that you know, they have to stay not aligned to
Speaker 1: the kind of where they are in the world between
Speaker 1: Russia and China, but you know they're a democracy, they're
Speaker 1: a natural friend of America and the Western world, and
Speaker 1: we shall all be helping them. And they've they've made
Speaker 1: a lot of changes there, infrastructure, transfer payment, seven hundred
Speaker 1: million people bank accounts that are going to be very
Speaker 1: good for that country.
Speaker 3: So what does that mean for JP Morgan?
Speaker 1: Well, we're not we're not in the retail business there,
Speaker 1: but we will be in. We have sixty thousand employees there.
Speaker 1: We got big campuses, high technology, and we're expanding our trading,
Speaker 1: our research, our investment banking. Yeah, we're there at a
Speaker 1: big time.
Speaker 2: Can you talk to me a little bit about JP
Speaker 2: Morgan on how I mean you've had a number of
Speaker 2: high profile departures. How does that change actually the way
Speaker 2: you focus your business and.
Speaker 3: How you run things going forwards?
Speaker 1: Not at all?
Speaker 3: Nothing zero. If you were to buy anything, what would
Speaker 3: you buy?
Speaker 1: Oh that's different. Look, we have we can't buy banks.
Speaker 1: You do know that?
Speaker 3: So you know you could buy your European bank, could you?
Speaker 1: I wouldn't even try. I think the American related to hey,
Speaker 1: I think the regulators he would hate it. Even if
Speaker 1: they said go ahead and do it, I'd probably be
Speaker 1: in courts and things for a year and a half.
Speaker 1: Huge distraction in my own company. I'd rather just say
Speaker 1: we want to add clients in this country, and clients
Speaker 1: and that kind of add bankers and technology and branches.
Speaker 1: It's just a better way for us to grow.
Speaker 3: Okay.
Speaker 2: But if there's if you could buy anything, I mean
Speaker 2: not about injury, but you were thinking of something.
Speaker 1: Yeah, we always look at stuff. Yeah, so we're not
Speaker 1: looking at any major acquisition or anything like that.
Speaker 3: Technology, you know feel what we're doing.
Speaker 1: We're adding literally and we have investor Day next week.
Speaker 1: We're adding retail and wholesale branches. We're adding them in
Speaker 1: the United States. We're almost all the major hundred cities
Speaker 1: there now. We're adding commercial banking all over Europe and Asia.
Speaker 1: We're adding technology around payments and even a blockchain called
Speaker 1: Onnex to move data and maybe move money one day.
Speaker 1: We're constantly investing. We have two hundred people, two thousand
Speaker 1: people in AI and machine learning for use cases on
Speaker 1: the way to probably I know if I.
Speaker 3: Speak in five years, how much bigger and how much
Speaker 3: different to.
Speaker 1: Be speaking to a fake diamond who's just answering question
Speaker 1: avatar an avatar?
Speaker 3: Yeah, do you think about technology a lot?
Speaker 1: Yes, all the time, every meeting we have. This has
Speaker 1: been true my whole life. When we have any management meeting,
Speaker 1: your technology jets on the table that includes AI cloud,
Speaker 1: just more analytics. What are you doing to do things better, faster,
Speaker 1: quicker for clients digital huge amount of digital services, integrating
Speaker 1: them better or to mating them better.
Speaker 2: But that would change, I mean that will change, I
Speaker 2: guess see the heart of banking. Does that mean that
Speaker 2: you'll see more winners and losers because of the technological eventments?
Speaker 1: So technology has always changed the heart of banking, moving money,
Speaker 1: holding money, advising money, rating, That won't change, and you
Speaker 1: have to do that of coording to rules, laws, regulations
Speaker 1: by country. But it'll change is how you deliver it.
Speaker 1: So like right now you go on your phone, you
Speaker 1: can move money and buy stocks. That wasn't true twenty
Speaker 1: years ago. So yes, everything you do will change to
Speaker 1: the technology. But you still have to move money, budget,
Speaker 1: raise money, make investments, et cetera. So you know, the
Speaker 1: core won't change, but will change. Regulations may change that too, obviously,
Speaker 1: so in the US.
Speaker 2: So again, would a Trump presidency be more favorable to
Speaker 2: banks when it comes to regulation?
Speaker 1: You know, I don't. I don't know. I mean, you know,
Speaker 1: I am unhappy with the amount of rules and regulations
Speaker 1: coming out today. I don't know what a second administration
Speaker 1: of either one would do. I'm hopeful that they focus
Speaker 1: on growth, wh's good for the citizens, what's good for
Speaker 1: the country, and I would help anyone I can to
Speaker 1: do that for my country. I'm quite patriotic about that,
Speaker 1: and I do think you need to In terms of service,
Speaker 1: I think you needed no helping.
Speaker 2: Helping as the bank. It's good to get that clear exactly. Okay,
Speaker 2: j P, thank you so much for joining us. That was,
Speaker 2: of course the JP Morgan, a chief executive officer,