WEBVTT - Surveillance: Inflation with Jamie Dimon (Podcast) 0:00:05.120 --> 0:00:09.200 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane, along 0:00:09.200 --> 0:00:12.719 with Jonathan Ferrell and Lisa brown Witz Jay Lee. We 0:00:12.840 --> 0:00:16.760 bring you insight from the best and economics, finance, investment, 0:00:17.079 --> 0:00:22.400 and international relations. Find Bloomberg Surveillance on Apple, podcast, SoundCloud, 0:00:22.800 --> 0:00:26.240 Bloomberg dot Com, and of course on the Bloomberg terminal. 0:00:29.080 --> 0:00:30.800 It's been a tough year so far for the big 0:00:30.800 --> 0:00:33.120 banks on Wall Street, on the stock price. We can 0:00:33.120 --> 0:00:35.760 now catch up with Jamie Diamond of JP Morgan sitting 0:00:35.760 --> 0:00:39.080 down with Bloomberg's France saint. Thank you so much, John. Yes, 0:00:39.120 --> 0:00:41.280 we're in London and we could not be more pleased. 0:00:41.360 --> 0:00:43.519 I say the Royal Weed. We're really delighted. Speak to 0:00:43.560 --> 0:00:45.800 Jamie Diamond, thank you so much for taking the time. 0:00:45.960 --> 0:00:48.360 Walster in London speak to us. So the Fed, the Fed, 0:00:48.400 --> 0:00:51.440 the Fed today we're expecting fifty basis points hikes. What 0:00:51.600 --> 0:00:54.080 happens to inflation? Here? Is this your biggest concern? So 0:00:54.360 --> 0:00:56.840 first all, Francine happy to be here and give it 0:00:56.840 --> 0:00:59.480 a little perspective. We have and this this is contradictory 0:00:59.480 --> 0:01:02.520 about to say both the true very strong US economy. 0:01:02.880 --> 0:01:07.039 They consumers in great shape, lots of money spending the money, jobs, 0:01:07.040 --> 0:01:09.400 of plentiful wages of going up, though everything is distorted 0:01:09.400 --> 0:01:11.440 by inflation and all that, but those are good news. 0:01:11.480 --> 0:01:14.319 And businesses are in very good shape. And the FED 0:01:14.400 --> 0:01:16.080 is going to have to raise rates and reverse Q 0:01:16.200 --> 0:01:18.080 eight and they're gonna, you know, if they can. They're 0:01:18.080 --> 0:01:21.199 gonna try to slow down the economy enough eight percent 0:01:21.240 --> 0:01:23.600 starts to come down over time, and I wish them 0:01:23.600 --> 0:01:26.039 the best. You know, we're a little late, but you 0:01:26.120 --> 0:01:28.640 remember two years ago we have fifteen percent unemployment and 0:01:28.680 --> 0:01:31.040 no vaccine. So I think people should take a deep breath, 0:01:31.360 --> 0:01:33.039 give him a chance. And I think they're gonna move. 0:01:33.120 --> 0:01:35.479 I think the sooner they move, the better. So yeah, 0:01:35.520 --> 0:01:38.280 they're gonna be raising races. Breath, But can they engineer 0:01:38.319 --> 0:01:40.400 a soft planting or is there a worry of recession? 0:01:40.520 --> 0:01:42.400 Of course, but none of us will ever know, right, 0:01:42.440 --> 0:01:44.759 But if I had to, I'm not a betting man. 0:01:44.840 --> 0:01:47.480 I just the odds of the following something like, yes, 0:01:47.520 --> 0:01:49.840 they can engineer soft landing, a third of persent chance, 0:01:50.160 --> 0:01:52.000 probably a third of percent chance. They can engineer a 0:01:52.120 --> 0:01:56.279 mild recession. Think of we've had mild FED induced recessions before, 0:01:56.640 --> 0:01:58.160 you know, where inflation goes up one and a half 0:01:58.200 --> 0:02:01.520 for two percent, everything slows down, phases coming down, and 0:02:01.560 --> 0:02:03.600 it's six or nine months, and then there's a chance 0:02:03.640 --> 0:02:05.240 it's gonna be much harder than that. And then in 0:02:05.280 --> 0:02:07.560 the face of all of that, you have Ukraine, which 0:02:07.600 --> 0:02:10.800 is a huge global issue. And do you fear the 0:02:10.840 --> 0:02:13.359 FED and do you fear a policy mistake from the Fed? 0:02:13.520 --> 0:02:17.600 And what does does to consumers? I'm not I'm not 0:02:17.680 --> 0:02:20.280 afraid of the FED. You know, I'll change this subject 0:02:20.360 --> 0:02:23.800 a little bit. I think America needs very good domestic 0:02:23.880 --> 0:02:27.160 policy to improve the growth the economy, which makes the 0:02:27.200 --> 0:02:30.600 FED job easier. And that is about regulations and rules 0:02:30.639 --> 0:02:34.120 and policies and improving projects and things like that. So 0:02:34.160 --> 0:02:37.280 you have increased the supply side as opposed to, you know, 0:02:37.320 --> 0:02:39.600 do something the demand side. So the FED job would 0:02:39.600 --> 0:02:42.400 be easier if we had very rational, thoughtful economic policy. 0:02:42.760 --> 0:02:44.320 What could go wrong? But I mean, when you talk about, 0:02:44.360 --> 0:02:46.160 you know, a strong US consumer or strong business. You 0:02:46.200 --> 0:02:50.480 talked us about storm clouds, what are those storm crowds? Clouds? 0:02:50.480 --> 0:02:53.400 And what's worst case are your I hate the word unprecedented, 0:02:53.440 --> 0:02:57.480 but there's kind of fiscal and monetary induced unbelievable growth 0:02:57.560 --> 0:02:59.120 in the U S, which was true around the world, 0:02:59.120 --> 0:03:02.600 though it's obviously slow going down in Europe. That's abnormal. 0:03:02.680 --> 0:03:05.280 We've never really quite had that before. We've never had 0:03:05.360 --> 0:03:07.720 q T before. So you know, you look at QUEI, 0:03:07.919 --> 0:03:10.120 that's one of the greatest experiments ever done. They're gonna 0:03:10.120 --> 0:03:12.440 be writing books for fifty years on it, and we're 0:03:12.440 --> 0:03:14.720 gonna have to reverse it, and that's a huge change 0:03:14.720 --> 0:03:16.600 in the flow of funds over time around bonds and 0:03:16.720 --> 0:03:18.639 rates and stuff like that. My own view is that 0:03:18.720 --> 0:03:21.640 Rachel probably will still have to go up from here. Uh. 0:03:21.720 --> 0:03:23.799 And then you've got Ukraine, which you know, I think 0:03:23.919 --> 0:03:26.919 is a potent. When you look at Ukraine, obviously the 0:03:26.960 --> 0:03:28.800 wishful thinking is that we have a FED and dew 0:03:28.880 --> 0:03:32.760 slow down works. The world is fine, Ukraine resolves, but 0:03:32.840 --> 0:03:35.200 there's a chance that this goes on for years and 0:03:35.400 --> 0:03:39.600 you completely rattle global energy markets, wheat markets, commodity markets, 0:03:40.040 --> 0:03:41.880 and you know that we need, as you know, the 0:03:41.960 --> 0:03:44.040 Western world needs to be prepared for that and needs 0:03:44.080 --> 0:03:46.680 to take every action today to be prepared that that 0:03:46.800 --> 0:03:49.240 can get really bad tomorrow. And you know it gets 0:03:49.280 --> 0:03:51.000 really bad tomorrow, you don't have time So how do 0:03:51.040 --> 0:03:53.920 you handle that? How what what's your plan B if 0:03:53.960 --> 0:03:57.320 it does go shape. I like the fact that it 0:03:57.400 --> 0:03:59.160 will deal with it, you know, I mean that's life. 0:03:59.240 --> 0:04:02.520 I mean, I like, in my view the most important 0:04:02.560 --> 0:04:05.920 thing is American growth and that America. You know, I 0:04:06.000 --> 0:04:08.800 called this Marshall Plan for Energy that we do everything 0:04:08.920 --> 0:04:11.880 we can and this doesn't violate climate change, it doesn't 0:04:11.960 --> 0:04:14.960 change anything about long term objectives. But we do everything 0:04:15.000 --> 0:04:17.360 you can to get oil and gas into the hands 0:04:17.400 --> 0:04:19.880 of Europeans so they don't freeze in the winter. You know. 0:04:20.200 --> 0:04:22.000 And again I'm not saying it's going to happen, but 0:04:22.080 --> 0:04:24.200 you know, you have a couple of problems out there 0:04:24.240 --> 0:04:28.160 that the national energy stuff is, the global energy is precarious, 0:04:28.560 --> 0:04:31.839 and if oil goes to that's a huge problem for people. 0:04:31.880 --> 0:04:33.840 And we should do everything we can today. We need 0:04:33.880 --> 0:04:37.400 to pump moral and gas. We do. I feel like 0:04:37.400 --> 0:04:39.520 at the US Frankers they could drill mar We get 0:04:39.680 --> 0:04:42.880 confused about policy and that somehow doing that is bad 0:04:42.920 --> 0:04:45.240 for the climate. It's not. You know, we need you know, 0:04:45.240 --> 0:04:48.280 if you want transitioning gas, replace called and we should 0:04:48.279 --> 0:04:50.640 approve all the gleen stuff too, even the green stuff. 0:04:50.680 --> 0:04:52.200 Takes five years to ten years to approve. In the 0:04:52.279 --> 0:04:54.680 United States, I mean, America's needs to get us act 0:04:54.720 --> 0:04:56.960 together and they should have a war room. They shouldt 0:04:57.000 --> 0:04:59.320 everyone involved, get all the people and say what do 0:04:59.360 --> 0:05:01.720 we need to do in a consistent careering way. We 0:05:01.800 --> 0:05:05.040 need to get more gas to LERG terminals. We can't 0:05:05.040 --> 0:05:07.320 do that without a gas pipeline, you know. And so 0:05:07.440 --> 0:05:10.320 we're just not national anymore. We we we we have 0:05:10.480 --> 0:05:12.760 misconceived notions about how we gonna get things done, and 0:05:13.600 --> 0:05:16.400 so they're trying. But the roll of Europe and this 0:05:16.800 --> 0:05:19.480 could Europe see a recession because of the energy prices. Absolutely, 0:05:19.520 --> 0:05:21.520 you know, our condoms would say that you had slowed 0:05:21.560 --> 0:05:24.760 down to two percent of something. But the problem with 0:05:25.080 --> 0:05:26.960 right now and the economs would agree with me. We're 0:05:27.000 --> 0:05:29.920 looking at a static analysis that if things stay the 0:05:30.000 --> 0:05:32.039 way they are, but you and I know for certain 0:05:32.080 --> 0:05:34.760 things don't stay the way they are. And my view 0:05:34.880 --> 0:05:36.920 is as a very high chance that oil go higher. 0:05:37.160 --> 0:05:39.080 That only takes a million to two million barrels off 0:05:39.120 --> 0:05:41.400 the market a day. That can drive prices up thirty 0:05:41.480 --> 0:05:44.720 or forty dollars, and so we should prepare for that today. 0:05:45.440 --> 0:05:48.680 And uh so but but but I like the fact. 0:05:48.839 --> 0:05:50.840 I think it's great that the Western world has gotten 0:05:50.839 --> 0:05:56.400 together and who would have thought would get Sweden, Finland, Germany, Switzerland, 0:05:56.839 --> 0:05:59.640 all of us. But that working together part we need 0:05:59.680 --> 0:06:03.240 to make permanent for global security. First of all, just 0:06:03.279 --> 0:06:05.120 going back to the European economy, how quickly could we 0:06:05.120 --> 0:06:07.080 see a recession and how deep could it be? I 0:06:07.160 --> 0:06:09.839 don't know. I mean, you know, I hate to guess 0:06:09.920 --> 0:06:11.800 the future. No one really knows the future. I've never 0:06:11.839 --> 0:06:14.320 seen any really guess it. Well, but again, if you have, 0:06:14.720 --> 0:06:16.960 if Ukraine gets worse, I would assume that you're going 0:06:17.000 --> 0:06:18.599 to go to a recession and may take a couple 0:06:18.640 --> 0:06:20.799 of cores, but I would assume that our sanctions working. 0:06:20.880 --> 0:06:23.560 So are the sanctions trying to deter Russia from continuing 0:06:23.600 --> 0:06:25.160 the war and you crying? Or is it just to 0:06:25.520 --> 0:06:28.040 try and put the Russian contom there? Well, sanction is 0:06:28.080 --> 0:06:31.040 not the same of having tanks and airplanes, okay, but 0:06:31.440 --> 0:06:33.240 they are working to the extent that you know, the 0:06:33.360 --> 0:06:36.200 Russian GDP is gonna drop by ten or fift with 0:06:36.360 --> 0:06:39.640 the current sanctions. Remember there are sanctions that also the 0:06:39.760 --> 0:06:42.200 export controls and stuff like that, And you know, the 0:06:42.320 --> 0:06:44.680 next round. If you're really stop stops oil, and you 0:06:44.720 --> 0:06:47.240 can really stop oil being delivered, you know Europe, I 0:06:47.279 --> 0:06:49.480 mean Russia, you can get another teen percent down. So 0:06:49.800 --> 0:06:52.839 it's a tool in the tool kit. It's not definitive, 0:06:53.120 --> 0:06:55.920 which definitive is tanks, So you know we're not don't 0:06:56.120 --> 0:06:58.040 don't confuse the two, but you know one is a 0:06:58.120 --> 0:07:00.360 pretty powerful The sanctions are pretty powerful to all. But 0:07:00.440 --> 0:07:02.360 if you expect this to last for I think you 0:07:02.400 --> 0:07:04.479 said years. I don't expect it. I said we should 0:07:04.480 --> 0:07:06.760 be prepared for it too. I don't know what's going 0:07:06.800 --> 0:07:09.679 to happen. But how do you see this ending? And actually, 0:07:09.680 --> 0:07:11.720 if you're if you're a president of the US, if 0:07:11.760 --> 0:07:14.000 you're a president of the Commission, if you're the FED, 0:07:14.160 --> 0:07:16.520 right now, you need to game theory and it could 0:07:16.560 --> 0:07:19.680 go either way. It's like a three way system. So 0:07:19.840 --> 0:07:23.160 what do you do is listen. I think it's a 0:07:23.240 --> 0:07:25.160 mistake to guess at which one will be. It should 0:07:25.200 --> 0:07:26.840 be all three of them. And I think, you know, 0:07:26.920 --> 0:07:29.320 I think basically the Cold War is back. I think 0:07:29.360 --> 0:07:31.200 the whole world learned something that we always knew that 0:07:31.320 --> 0:07:34.480 national security is always the most important thing, but it 0:07:34.560 --> 0:07:36.640 kind of recedes in the background. We're all doing well, 0:07:37.040 --> 0:07:39.040 but now it's the most important thing. It should be 0:07:39.120 --> 0:07:41.040 the most important thing for the rest of our lives. 0:07:41.080 --> 0:07:43.840 So maybe we all learned that that is a permanent 0:07:43.960 --> 0:07:46.360 date of affairs. The Cold War is back. Uh. The 0:07:46.600 --> 0:07:49.400 Allies have to call ESCE and not just for military purposes, 0:07:49.480 --> 0:07:53.920 but for global economic strategic investment purposes, so that we've 0:07:53.960 --> 0:07:57.040 got a safe world if and if we don't do that, 0:07:57.440 --> 0:07:59.880 you know, you would you see Ukraine, you can see 0:07:59.880 --> 0:08:02.200 all around the world. You will see forms of chaos. 0:08:02.480 --> 0:08:04.080 So the impact on the economy, I mean, would you 0:08:04.080 --> 0:08:06.800 go around a trading floor until the young kids that 0:08:06.840 --> 0:08:09.240 I've never dealt with inflation that actually interest rates could 0:08:09.240 --> 0:08:13.200 be about five shortly, of course, of course that's you know, 0:08:13.640 --> 0:08:15.640 things change, and you know, I mean, I think you 0:08:15.680 --> 0:08:18.760 can easily see five percent bonds. The bonds have already 0:08:19.120 --> 0:08:21.960 ten year bonds. Were reacted dramatically and hopefully it won't 0:08:21.960 --> 0:08:23.880 go a lot. But I don't think it's a disaster. 0:08:24.000 --> 0:08:25.760 I don't think a slowdown as a disaster. I don't 0:08:25.760 --> 0:08:28.000 think a many Look when you say a many recessions, 0:08:28.240 --> 0:08:30.280 I feel for the people get hurt in that but 0:08:30.400 --> 0:08:32.560 it's not a disaster for the world economy. I think 0:08:32.640 --> 0:08:35.679 the potential outcomes Ukraine are And you've got to just 0:08:35.760 --> 0:08:38.040 separate the two and just remember when you talk about war, 0:08:38.480 --> 0:08:40.280 we didn't know how bad Vietnam is going to get. 0:08:40.520 --> 0:08:43.120 We don't know how long Gfghaistan was gonna last. The Russians, 0:08:43.160 --> 0:08:45.160 you know how long ifgast was gonna last. You can 0:08:45.200 --> 0:08:47.880 go war after war after war. They were not predictable. 0:08:48.120 --> 0:08:49.719 You didn't know the World War War was gonna be 0:08:49.760 --> 0:08:51.199 like that. You didn't know the World War two is 0:08:51.200 --> 0:08:55.199 going to start in September of nine. So I think 0:08:55.280 --> 0:08:57.720 predicting the outcomes war, you've got to be very curious. 0:08:57.760 --> 0:09:01.160 So why our markets so relaxed? That's markets, you know. 0:09:01.240 --> 0:09:04.760 I'm that can change just like that. Do you think 0:09:04.800 --> 0:09:06.719 it will? Are we expecting a big comm guessing? I 0:09:06.760 --> 0:09:08.880 don't know. I mean, again, fancying my job in life, 0:09:09.400 --> 0:09:11.480 I will serve our clients with thicker thin and our 0:09:11.520 --> 0:09:14.160 country and stuff like that. And of course we're always 0:09:14.280 --> 0:09:16.439 I mean, as a rule of thumb, we're always prepared 0:09:16.720 --> 0:09:18.920 for bid outcomes, not because we're predicting them. Because I 0:09:19.000 --> 0:09:21.040 need to say to the shareholder of the American public, 0:09:21.160 --> 0:09:25.400 my regulators, you know, the UK that JP Morgan will 0:09:25.440 --> 0:09:27.920 be safe and sound and help your country and your 0:09:27.960 --> 0:09:31.000 people if things get bad, and that is our job. 0:09:31.080 --> 0:09:32.840 Now we're dealing with a whole bunch of different things, 0:09:32.920 --> 0:09:35.880 and we're prepared. You know, we have extraordinary capability and capital, 0:09:35.960 --> 0:09:41.000 but earnest power. And where's China and this right now? Look, 0:09:41.040 --> 0:09:43.480 I my view is that China can't possibly like this, 0:09:44.040 --> 0:09:45.880 and they're playing if you look at them, they're playing 0:09:45.880 --> 0:09:48.000 a very neutral role. They're not trying to anger the 0:09:48.080 --> 0:09:50.760 United States. They know that the American Congress may very well, 0:09:51.240 --> 0:09:53.079 the Congress, not just the President, can come in and 0:09:53.200 --> 0:09:56.440 put you know, the secondary sanctions. They do three point 0:09:56.559 --> 0:09:59.760 five trillion dollars of trade with the West, imports and exports. 0:09:59.800 --> 0:10:03.839 They a hundred and fifty billion with Russia. Okay, one 0:10:03.960 --> 0:10:07.439 number is critically important. Sanctions against them maybe bad for 0:10:07.480 --> 0:10:09.360 the Western world, it will be even worse for them, 0:10:09.800 --> 0:10:11.640 and so they don't need that. They want to grow 0:10:11.679 --> 0:10:14.440 their country, they want to expand you know, maybe they 0:10:14.480 --> 0:10:16.520 don't like the West so much. They like this. I 0:10:16.559 --> 0:10:18.760 don't I just don't believe that's true. I think that 0:10:18.760 --> 0:10:20.440 they're caught between a rock and heart place that had 0:10:20.480 --> 0:10:23.760 the so called ally who's putting them in a difficult place? 0:10:23.960 --> 0:10:26.240 Can we still rely on China given the COVID zero 0:10:26.320 --> 0:10:28.839 policy and actually the shocks that's coming just from from 0:10:28.920 --> 0:10:32.480 that policy continuing. I think China has done. You gotta 0:10:32.480 --> 0:10:35.480 put China perspective. It's done a very good job developing 0:10:35.520 --> 0:10:38.440 itself over thirty or forty years. It doesn't have all 0:10:38.520 --> 0:10:40.719 the strains to the Western world. Okay, it doesn't. It 0:10:40.800 --> 0:10:44.040 doesn't have our food or water, or energy, or innovation 0:10:44.480 --> 0:10:46.920 or rule of law. You know that the the the 0:10:47.679 --> 0:10:51.480 competition of ideas. You know, autocracy has huge negatives. They 0:10:51.520 --> 0:10:54.000 don't have enough food, war and energy. Their their neighbors 0:10:54.000 --> 0:10:58.280 are very complex Russia, Indian Pact and Afghanistan, Philippino and Japan, Korea. 0:10:58.520 --> 0:11:00.920 It's hard for them to be expansion there. Uh, they 0:11:00.960 --> 0:11:04.080 don't have are a lot of things you have. So yes, 0:11:04.240 --> 0:11:06.040 I think we should be worried about them, and I 0:11:06.080 --> 0:11:09.800 think the West should negotiate, you know, how we're going 0:11:09.840 --> 0:11:13.559 to deal with trade, unfair competition, I p if, but 0:11:13.679 --> 0:11:16.120 sit down with them, you know, work work it through 0:11:16.160 --> 0:11:17.720 with them. We should don't need to be afraid of them. 0:11:17.920 --> 0:11:20.360 We should be afraid of is our own incompetence, not 0:11:20.760 --> 0:11:22.800 dealing with the Chinese as long as we stay together. 0:11:22.840 --> 0:11:25.240 If the Western world doesn't stay together, no little cherry 0:11:25.280 --> 0:11:28.040 pick every nation and and then you'll you'll end up 0:11:28.120 --> 0:11:31.000 what we had with Germany and North Dream too, which 0:11:31.040 --> 0:11:33.040 will be that would be a problem. Are you committed 0:11:33.080 --> 0:11:35.079 to China? So if we're seeing a splits and we're 0:11:35.080 --> 0:11:38.440 seeing the HSBC and an investor activism, could you see 0:11:38.440 --> 0:11:41.280 big banks actually being split into because of this East 0:11:41.360 --> 0:11:45.640 West tension? I think again, you gotta look business. You 0:11:45.760 --> 0:11:47.920 run for thirty or forty years. So we've made a 0:11:47.960 --> 0:11:50.839 big investment in China. The Greater China, including Hong Kong, 0:11:50.920 --> 0:11:53.280 etor you know, will be thirty or four percent in 0:11:53.320 --> 0:11:56.319 the global market one day. There there they will be 0:11:56.440 --> 0:11:58.880 a fully developed nation in twenty or thirty years, their 0:11:58.920 --> 0:12:02.080 politics will change. Is there a chance of a very 0:12:02.160 --> 0:12:05.400 bad outcome that you know, the world completely separates. There's 0:12:05.400 --> 0:12:07.400 a chance, you know that that will be bad for 0:12:07.480 --> 0:12:09.800 JP Morgan, but will survive. But I think there's a 0:12:09.880 --> 0:12:14.000 much bigger chance that that the blocks will negotiate strategic 0:12:14.160 --> 0:12:17.319 economic a bunch of other arrangements. Like I said three 0:12:17.360 --> 0:12:21.880 point five trade, where will change, what will change, it'll 0:12:22.000 --> 0:12:24.000 it'll take time. What will change is anything to do 0:12:24.120 --> 0:12:29.600 with national security anything. So think of AI five G, penicillin, 0:12:30.000 --> 0:12:34.000 rare earth, semiconductors, those supply chains will be brought back. 0:12:34.080 --> 0:12:36.520 As Janet Young said, the day will be friendly sourced 0:12:36.640 --> 0:12:38.360 doesn't be in the States. It's got to be in 0:12:38.360 --> 0:12:40.200 an ally, and so I think old nations are going 0:12:40.240 --> 0:12:42.679 to do that. China already does that. So this is 0:12:42.720 --> 0:12:44.760 a unilateral thing. And I think the rest of the 0:12:44.800 --> 0:12:47.880 trade will be fine or fundamentally fine. And they may 0:12:48.080 --> 0:12:50.400 that may take time, but you know, but that will 0:12:50.480 --> 0:12:52.760 happen over time. And it's kind of a little surprising 0:12:52.800 --> 0:12:55.160 to me how much the Western world relied on China, 0:12:55.240 --> 0:12:57.800 not not for trade and for sneakers and for shirts 0:12:57.840 --> 0:13:00.960 and stuff, but for rare earth. But they have them. 0:13:01.040 --> 0:13:03.400 We don't know we do. That's that's that's the whole thing. 0:13:03.760 --> 0:13:06.200 America's got tons of rare earths. It's just quote will 0:13:06.240 --> 0:13:07.480 cost a lot more money to take it out and 0:13:07.559 --> 0:13:10.439 smelt it, and therefore and their environmentalists and all that. 0:13:10.760 --> 0:13:13.520 That's why I'm saying national security. If I was in 0:13:13.679 --> 0:13:15.400 Why it's the only thing I'd be doing now is 0:13:15.480 --> 0:13:18.440 national security, and I'd be making decisions every day about 0:13:18.480 --> 0:13:23.079 how we create more secure energy, rare earth commodities, wet, 0:13:23.240 --> 0:13:26.040 all the things that the world's gonna need, not against 0:13:26.160 --> 0:13:30.280 China but to protect the Western world and um so 0:13:30.440 --> 0:13:32.520 all these things could be done. America is not used 0:13:32.520 --> 0:13:35.360 to have an industrial policy. To do that successfully, you're 0:13:35.360 --> 0:13:37.760 gonna have to have some form of industrial policy where 0:13:37.760 --> 0:13:40.719 you're doing some kind of subsidies. It should but but 0:13:41.040 --> 0:13:43.599 be clear, I don't want to subsidize a company. I 0:13:43.720 --> 0:13:45.120 just think some of these things need to be brought 0:13:45.160 --> 0:13:47.719 back to the United States. Probably be inflationary, right, does 0:13:47.760 --> 0:13:51.360 it is crypto? I think head against inflation, right. No, 0:13:52.160 --> 0:13:55.280 I think the higher rates go, the more cost to 0:13:55.320 --> 0:13:58.120 hold an asset. Doesn't produce at of things. So, but 0:13:58.440 --> 0:14:01.800 I think national secure already is number one. I would 0:14:01.880 --> 0:14:04.960 not do something because of inflation because of national security. 0:14:05.240 --> 0:14:08.960 They are completely different, and people shouldn't get confused. Two. 0:14:09.000 --> 0:14:11.520 And you know that this is why the America has 0:14:11.520 --> 0:14:13.800 to take leadership and that this is a matter of 0:14:13.920 --> 0:14:17.120 national security. If everything turns out fire in Ukraine, but 0:14:17.240 --> 0:14:20.400 I'll take a deep breath and say we overreacted. I'd 0:14:20.520 --> 0:14:22.880 rather that then we all take a deep breath and say, 0:14:23.120 --> 0:14:26.840 my god, we were not prepared. And when it comes 0:14:26.880 --> 0:14:29.120 to Roe v. Wade, we've been talking about nothing else 0:14:29.160 --> 0:14:30.320 for the lost two days. What does it mean for 0:14:30.400 --> 0:14:32.560 JP Morgan? And I'm not going to get involved in that. 0:14:33.200 --> 0:14:35.080 I think it's a mistake. You know, these things are 0:14:35.200 --> 0:14:38.600 very complicated, and you know people pass laws everywhere. There's 0:14:38.600 --> 0:14:41.440 actually a hundred things in the law. It's not it's 0:14:41.520 --> 0:14:43.720 not there are a hundred things in all these laws, 0:14:44.320 --> 0:14:47.240 a hundred like And so when you people say support this, 0:14:47.280 --> 0:14:49.720 support that, all you're doing is being sucked into support 0:14:49.800 --> 0:14:51.840 something you probably shouldn't. I've looked at all the voting 0:14:51.920 --> 0:14:53.480 laws and looked all these laws, and you look at them. 0:14:53.600 --> 0:14:55.040 I agree with some of the things they say. I 0:14:55.080 --> 0:14:56.440 don't agree with some of the things they say. In 0:14:56.440 --> 0:14:58.440 New York does a better job than Georgia this. So 0:14:58.480 --> 0:15:01.280 I'm not gonna get sucked into saying I support your law. 0:15:01.720 --> 0:15:03.600 But instead of support, I mean, do you see actually 0:15:03.680 --> 0:15:06.400 for for such a big bank in the US having 0:15:06.440 --> 0:15:12.800 to shift because of policies? Will deal with it. I 0:15:12.840 --> 0:15:15.000 don't sit here and fear that whatever it is, we'll 0:15:15.040 --> 0:15:16.680 deal with it and we'll take care of our people 0:15:16.760 --> 0:15:19.080 like we've alway said we would. All right, Jamie Diamond, 0:15:19.080 --> 0:15:20.240 thanks so much. I need to talk to you about 0:15:20.240 --> 0:15:22.280 the UK. We need to have a conversation as about 0:15:22.320 --> 0:15:25.080 the UKNSA city of London, Jamie Diamonds, and we'll have 0:15:25.160 --> 0:15:28.640 plenty more from London throughout the day. Fancying lankwith thank you. 0:15:28.720 --> 0:15:31.760 Sitting down with Jammie down the CEO of JP Morgan Chase, 0:15:38.200 --> 0:15:39.960 do you have a two hard discussion on us today 0:15:39.960 --> 0:15:42.680 with Kenneth Rogoff that we squeezed into a matter of minutes. 0:15:42.720 --> 0:15:46.040 We do that again with the laureate from New York University. 0:15:46.560 --> 0:15:49.200 Paul Romer joins us. He is a different economist and 0:15:49.240 --> 0:15:52.640 that from day one the gentleman of Colorado has done 0:15:52.720 --> 0:15:56.760 academics at Rochester and beyond where he has said, always 0:15:56.840 --> 0:16:01.200 consider technology. Paul Romer joins us at this morning, professor, 0:16:01.280 --> 0:16:03.120 thank you so much for joining. I want to go 0:16:03.280 --> 0:16:07.760 back to the heart of it, indogenous technological change. Do 0:16:07.880 --> 0:16:12.600 we actually understand what technology is doing to the American 0:16:13.120 --> 0:16:18.000 labor economy, to people in our many death stiles yea 0:16:18.200 --> 0:16:20.400 so there's a good way to see if some of 0:16:20.440 --> 0:16:24.320 the problems were experiencing the US are technology based. Look 0:16:24.360 --> 0:16:28.280 at other countries, same technology shocks are hitting all countries. 0:16:28.920 --> 0:16:32.080 And what's unfortunate is the US really stands out as 0:16:32.120 --> 0:16:37.040 an outlier with this declining fraction of adult males, adult 0:16:37.080 --> 0:16:40.600 females who are working. All of the other countries Britain, Germany, 0:16:40.680 --> 0:16:43.480 you know, they're seeing these steady increases. So it can't 0:16:43.480 --> 0:16:46.840 be technology which is explaining this decline in the US. 0:16:47.480 --> 0:16:50.040 Jeffrey Sachs would agree with you his book over ten 0:16:50.160 --> 0:16:52.040 years ago. Now I really got out front on this 0:16:52.200 --> 0:16:55.600 from a whole different angle, I would say, Professor Roman, 0:16:55.680 --> 0:16:59.040 Professor Sax, two different views on a part of America 0:16:59.200 --> 0:17:02.920 that can't get a job. Why can't they? Yeah, I 0:17:03.240 --> 0:17:05.840 think can't get a job is not quite right because 0:17:05.960 --> 0:17:07.760 we've got all this evidence that there are jobs that 0:17:07.840 --> 0:17:11.399 are available right now. The returns to work, just the 0:17:11.480 --> 0:17:14.760 compensation you get, the quality of what the work is 0:17:14.840 --> 0:17:18.000 like is just not high enough. We've let this deteriorate 0:17:18.160 --> 0:17:20.800 through a couple of decades now, and what we have 0:17:20.920 --> 0:17:24.600 to commit to is that everyone should be working. But 0:17:24.760 --> 0:17:27.480 if you work, you should uh, earn enough to make 0:17:27.520 --> 0:17:30.520 it worth your your trouble. So these increases we were 0:17:30.520 --> 0:17:33.919 seeing for jobs like a gas station at end increase, 0:17:34.320 --> 0:17:37.440 that's catching up for the clients that we tolerated for 0:17:37.680 --> 0:17:40.520 for much too long. And uh, we should we should 0:17:40.560 --> 0:17:45.600 be pushing for more increases in wages, more attractiveness of work, 0:17:45.680 --> 0:17:48.200 because we can't live in a society where people just 0:17:48.359 --> 0:17:52.040 check out, especially adults. Adults checkout and don't work. And Paul, 0:17:52.040 --> 0:17:54.359 you're saying, this is the participation rate still hasn't gotten 0:17:54.400 --> 0:17:57.280 back to where it was pre pandemic. I still below that. 0:17:57.680 --> 0:18:00.160 Still you're talking about the need for even fast stir 0:18:00.240 --> 0:18:02.600 wage increases at a time when people are very concerned 0:18:02.880 --> 0:18:06.040 about the highest levels of consumer price inflation. Going back 0:18:06.440 --> 0:18:09.879 to Night one, how much do you think that the 0:18:09.960 --> 0:18:13.119 flood of money put into the economy during the pandemic, 0:18:13.240 --> 0:18:17.359 the checks sent to individuals, actually undermined the ability to 0:18:17.520 --> 0:18:20.040 engage in fiscal stimulus like what you're talking about to 0:18:20.080 --> 0:18:23.560 get more people into the workforce. Well, you have to 0:18:23.640 --> 0:18:26.440 think about targeting the fiscal stimulus, like what would be 0:18:26.520 --> 0:18:30.880 a targeted measure. We could have a subsidy for wages 0:18:31.119 --> 0:18:33.440 at the bottom end of the wage distribution. The government 0:18:33.520 --> 0:18:35.480 could pick up part of the cost, or we could 0:18:35.480 --> 0:18:37.760 be like other countries, we don't make the worker in 0:18:37.800 --> 0:18:40.520 the firm cover the full cost of the health insurance 0:18:40.600 --> 0:18:43.119 for the worker. There's ways to target spending to make 0:18:43.200 --> 0:18:46.560 work more attractive that that don't involve just like sending 0:18:46.720 --> 0:18:49.600 checks to to everybody in the economy. And if you 0:18:49.640 --> 0:18:52.440 think about inflation, it's a weighted average of a bunch 0:18:52.480 --> 0:18:56.080 of price changes. So the wrong response right now is 0:18:56.160 --> 0:18:58.919 to say we want to make those gas station attendants 0:18:59.680 --> 0:19:03.760 have uh lower wages or stop them from getting wage increases. 0:19:04.040 --> 0:19:07.200 There's a lot of other prices in the economy that 0:19:07.440 --> 0:19:10.560