Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: I could not be more happy to be here in
Speaker 2: Paris with Jennie Diamond, of course, at JP Morgan Global
Speaker 2: Markets Conference. Mister Diamond, thank you for having us, Thank
Speaker 2: you for being our host here in Paris. I mean
Speaker 2: there's a lot writing. Look, the markets are optimistic. They're
Speaker 2: optimistic that there's some kind of resolution in the Middle East?
Speaker 2: Are they overlooking the worries about inflation?
Speaker 1: So verd You're welcome, happy to be here.
Speaker 3: I think there's a little bit too much exuberant out there,
Speaker 3: and not just the Middle East. It's you know, it's Ukraine, Russia,
Speaker 3: still there, America, China. There are a lot of these complex
Speaker 3: issues which may make out at the market, but then
Speaker 3: they're issues like inflation.
Speaker 1: You know that today's print wasn't so good.
Speaker 3: So yeah, I think the market's kind of exuberant and
Speaker 3: it may not be completely justified.
Speaker 2: So why are they so exuber did there exuberant? Are
Speaker 2: you expecting a correction? And is it because they're looking
Speaker 2: at AI?
Speaker 1: Well, I don't think to say.
Speaker 3: I think corporate property is doing very well. HEYI will
Speaker 3: be a plus this year is just a lot more spending,
Speaker 3: which maybe a little inflationary too, but in more corpate profits,
Speaker 3: you know, we're doing a little bit more.
Speaker 1: Q E. Governments still spend a lot of money.
Speaker 3: The one big beautiful bills kicking in stimulus are upsetting
Speaker 3: a lot of the gas. I think the gas increase
Speaker 3: a dollar gas is one.
Speaker 1: Hundred million dollars.
Speaker 3: The big, one big bout of bills through one hundred
Speaker 3: billion that consumers pay, the one big group of bills.
Speaker 1: Three hundred billion. Deregulation is real.
Speaker 3: There are these things as you're causing a pretty good
Speaker 3: market right now.
Speaker 2: But when you talk about exuberance, it means that there's
Speaker 2: a market dislocation.
Speaker 3: But where do you see that these dock markets in
Speaker 3: the top ten fifteen percent credits breads are very low.
Speaker 3: The general is sum of things that these things.
Speaker 1: Are older to resolved. And I'm just I'm kind of
Speaker 1: a skeptic. I don't know. I hope they do, but
Speaker 1: I don't know that they will.
Speaker 2: Okay, what do chief executives worry about in private that
Speaker 2: they tell you that they won't tell us.
Speaker 1: Not much? Trade?
Speaker 3: You know, America, NATO, the wars, oil prices, I mean,
Speaker 3: the same stuff you hear about.
Speaker 4: All time capex.
Speaker 2: I know, you know, we had a great earning season.
Speaker 2: Is the next one going to be less good?
Speaker 3: I don't know yet, very hard to tell, you know.
Speaker 3: I think the definicit spending drives a lot of drives
Speaker 3: a lot.
Speaker 1: Of corporate earnings too, So it's and drives a lot
Speaker 1: of capex.
Speaker 3: And you know, well capex great productivity before it creates inflation.
Speaker 1: I don't know that. I think one of the risks
Speaker 1: is inflation. I've always thought that.
Speaker 2: And so but also, how do you think of oil
Speaker 2: and how do you think about what's.
Speaker 4: Happening in the Middle East?
Speaker 2: If this lasts three weeks, four weeks, even like two months,
Speaker 2: are we going to be in trouble.
Speaker 3: It's a big deal, and every day it gets a
Speaker 3: little bit worse.
Speaker 1: I don't know. House me resolved.
Speaker 3: I hope it gets resolved in the interests of the
Speaker 3: United States and against the Iranian regime.
Speaker 1: Not the Iranian people. But I don't know. But I've
Speaker 1: read something day.
Speaker 3: It's very interesting that China reduced their demand by five billion,
Speaker 3: by five.
Speaker 1: Million barrels a day.
Speaker 3: America increases export quite three million barrels a day. That
Speaker 3: million is meant for a lot of what was lost,
Speaker 3: and which is maybe why it hasn't been as severe
Speaker 3: as people think. On the other hand, inventories are coming down,
Speaker 3: you know, gas wells have to be closed and stuff
Speaker 3: like that. So it gets gets a little more serious
Speaker 3: every day that day that it can becomes. The disaster
Speaker 3: has been pushed out quite further than we thought at
Speaker 3: the beginning.
Speaker 4: Do you worry about the US consumer?
Speaker 2: Are you seeing signs of stress anywhere now?
Speaker 3: I think the upper end, the top fifty percent, lots
Speaker 3: of money, jobs, ways going up. Home price is going up,
Speaker 3: doc pribies going up. There spending like they should, you know,
Speaker 3: like they're buying the traveling. The bottom thirty percent is
Speaker 3: I'm gonna say, its struggling a little bit. It's not
Speaker 3: a massive downturn, and of course we'd like to help them,
Speaker 3: but their wages have not gone up. But more important
Speaker 3: that they still have jobs and they don't have too
Speaker 3: much debt. They still have jobs, and that you know,
Speaker 3: at the end of the day, it's going to drive
Speaker 3: consumer spending, consumer sentiment, that part of corporate profits.
Speaker 1: Will be jobs.
Speaker 2: What do you worry about? I know there's also the
Speaker 2: President's meeting with President tomorrow in Beijing. I mean, does
Speaker 2: that have implications for the trajectory of America.
Speaker 3: Look, I don't know, but I would suspect they'll come
Speaker 3: up with some that'll be a friendly meeting with some
Speaker 3: positives on both sides.
Speaker 1: I don't think China is going to give it any
Speaker 1: major demands. I don't think we're going to make major demands.
Speaker 3: You know, we both have a lot of common interest,
Speaker 3: you know, anti terrorism, anti nuclear pliferation. You know, China
Speaker 3: is feeling its oats and now you have to deal
Speaker 3: with President Trump.
Speaker 1: So we'll see how it turns out.
Speaker 2: You had an amazing trading actually results trading was amazing
Speaker 2: in the last quarter.
Speaker 4: How's it going now?
Speaker 3: Well, I can't comment on that, but I mean from
Speaker 3: the last time Choice spoke publicly, it was fine so far.
Speaker 1: But I can't give you other information on that though.
Speaker 3: Give me a sense when you guys can see every
Speaker 3: day volumes are right, yeah, and MBARI's high.
Speaker 1: All things mean equal.
Speaker 2: It would be good for trading, But you're part I mean,
Speaker 2: it's it's you think it's going okay, because it depends
Speaker 2: on the kind of training that.
Speaker 1: You are right, you will benefit it's gonna be very good.
Speaker 2: Talk to me about AI. So I don't know whether
Speaker 2: you've also played around with mythos.
Speaker 4: What did you see so AI?
Speaker 3: The big picture, AI is going to cure cancers and
Speaker 3: reduce work weeks and kids will live longer, and claims
Speaker 3: to be safer, carsibly safer and lets people die and
Speaker 3: you'll have new drugs.
Speaker 1: It's it's gonna be good. Uh.
Speaker 3: And you know, but there and we've been using now
Speaker 3: for thirteen years. It does an amazing job and a
Speaker 3: various different things. So we're gonna deploy it to help
Speaker 3: our customers. There are two attributes which that people worry about.
Speaker 3: What is my Thoase it's legitimate that this this is
Speaker 3: so powerful and covers a lot of vulnerabilities and we're
Speaker 3: all trying to figure out how to deal with They're
Speaker 3: not just for ourselves but all of our friends, big banks,
Speaker 3: small banks, you know, telecom, the garments on top of it.
Speaker 3: But a lot of the words that I've be done
Speaker 3: by enterprise. They don't have the ability to do a
Speaker 3: lot of that. So I think, you know, Scott message
Speaker 3: running for our banks, and I assume they've done it
Speaker 3: for other people elsewhere.
Speaker 1: So we're all gonna hands around.
Speaker 3: It is risky everyone, and we actually published and people
Speaker 3: should look at this like, oh, listen, what you can
Speaker 3: do now? Don't wait to get mite those because everyone's
Speaker 3: going to get it at one point.
Speaker 1: But you can't give to everyone. They can't handle it.
Speaker 3: Where it gets leaked out, it can be used by
Speaker 3: bad guys. Before we protected open source code and all
Speaker 3: our code and so we need a little work to
Speaker 3: do to get it done right. And the other one
Speaker 3: is his job disruption, where I just that may be true.
Speaker 3: We should get prepared for it. We should be breathless,
Speaker 3: you know. And that to me is how do you
Speaker 3: create skills and reskilling. There will be a lot of
Speaker 3: jobs and AI cyber advanced manufacturing the trades, you know.
Speaker 3: And then we should make sure locally and it's I
Speaker 3: mean between government and business kind of collaboration that we
Speaker 3: are prepared if it have it too much, stop talking
Speaker 3: about it, have a plan.
Speaker 2: But my thoughts wood, does it change the way that
Speaker 2: banks have to defend themselves? Are you thinking about cybersecurity.
Speaker 3: Differently cyb No, Banks's always been on top of the
Speaker 3: top of the heat during cybersecurity.
Speaker 1: I wrote about my Chaman's letter, cyber.
Speaker 3: Is our biggest risk, made worse by AI, and that
Speaker 3: was before Mythos. So this, yeah, this does make it
Speaker 3: more dangerous. That's why banks are really working this thing
Speaker 3: right now. And all right, all of us together, we're collaborating.
Speaker 3: We're not like arguing with each other.
Speaker 4: What does that mean? What does that actually look like? Concretely?
Speaker 4: Five six months, all going.
Speaker 3: Through all applications with Mythos patching them up, all going
Speaker 3: through open source code, a lot of flaws and open
Speaker 3: source code. We don't need to all fix the same
Speaker 3: open source code. If you fix one, I can fix
Speaker 3: the other. Cut with collaborations, trying to think out how
Speaker 3: to form utilities to help third parties, going to our
Speaker 3: critical vendors, you know, including hooked into exchanging around the world,
Speaker 3: making sure they're doing it properly. And there are other
Speaker 3: things like how do you know a patch used to
Speaker 3: be posted publicly into a patch? Fix that patch now
Speaker 3: you have to be able to fix the patch of
Speaker 3: hours and some you can't make public. But you make
Speaker 3: it public, the bad guys will get it reverse engineered
Speaker 3: and get grow. So if we're doing all that stuff,
Speaker 3: it's serious work. I think hundreds of people doing it
Speaker 3: full time.
Speaker 2: Now, look hyper scalers and also funding of hyper scalers
Speaker 2: is really propping up the economy.
Speaker 4: Do you have any worries about getting that.
Speaker 2: Money back or you know, some of the funding of
Speaker 2: what's being constructed.
Speaker 3: The way I look at it is that AI is real,
Speaker 3: A lot of money's going to go into it.
Speaker 1: That doesn't mean everyone who does it is gonna be
Speaker 1: a winner.
Speaker 3: Like go back to the Internet, a lot of people lost,
Speaker 3: a lot of people won, and so you know, and
Speaker 3: the hyper skals, were those data centers not find use?
Speaker 3: They probably will, But is it possible that some do
Speaker 3: it badly, design it badly, didn't get the right Yeah,
Speaker 3: of course it's possible.
Speaker 1: Yeah.
Speaker 2: Does AI change the way you recruit, the way you hire,
Speaker 2: and the.
Speaker 4: Way you work.
Speaker 3: I think it's gonna change almost everything. And I've done
Speaker 3: my own stuff and getting.
Speaker 1: Reports in the morning.
Speaker 3: I have a Jamie Strategic Intelligence reports getting better, so
Speaker 3: I could say what did Francine say yesterday? And every
Speaker 3: morning at five, AMI tell me what you had on
Speaker 3: your people that might be significant to me, and then
Speaker 3: you can keep it educating it. That's not important. This
Speaker 3: is important. What's significant. So yeah, we're all going to
Speaker 3: use it in different ways, but we will use it.
Speaker 3: It won't change my day to day. It will inside
Speaker 3: the company because we deploying it, you know, in a
Speaker 3: thousand different use cases.
Speaker 1: Today it's much better off.
Speaker 2: Just watching Bloomberg talk to me about the UK. So
Speaker 2: there's a lot of you know, the markets are on
Speaker 2: tenter hooks to know whether the Prime minister survives. We
Speaker 2: don't exactly know what comes next. The markets are nervous.
Speaker 2: What does it mean for JP Morgan in London?
Speaker 3: Well, look, we've had ups and downs in markets and
Speaker 3: ups and down politicians, so it's not going to change
Speaker 3: our fundamental strategy. I would say that Europe, including the UK,
Speaker 3: know what to do and it's the Droggy requirement. There
Speaker 3: are three hundred items in there, common capital markets, common
Speaker 3: regulations allowing cross border in this In the inn EU,
Speaker 3: competition is huge, regulatory not terif but regulatory burdens.
Speaker 1: They need to do the same in the UK. I
Speaker 1: think Keres Stormer is a very smart guy. Politics is
Speaker 1: really tough.
Speaker 3: They're in a bind because of debts and deficits, and
Speaker 3: you know they inherited a lot of that.
Speaker 1: I think the world of racial reeves and they got
Speaker 1: to be tough. They got to say we're going to
Speaker 1: do these things.
Speaker 3: And the short term may not be great, but governments
Speaker 3: have to get this stuff done right. They growth the
Speaker 3: economy and militarily, and I think they need to work
Speaker 3: close with Europe. And you know, if you remember Kirstormer
Speaker 3: and President McCrone, they were going to work closure, not reversion,
Speaker 3: bregsit but you know, military alliances, intelligence alliances, making sure
Speaker 3: the economies, you know, have economic lasership good for both
Speaker 3: the continent and good for Europe.
Speaker 2: With the UK, you're building a big mega project Canary
Speaker 2: Wharf that everyone is quite excited about. Does this potential
Speaker 2: politically instability actually change your view on everything or you know,
Speaker 2: do you see costs going up?
Speaker 4: Or are you worried about taxation?
Speaker 1: Political instability?
Speaker 3: But if they become hostile to banks again, yes, I
Speaker 3: mean I've always objected to fact. You know, we didn't
Speaker 3: damage the ukn anyway, and we paid probably ten billion
Speaker 3: dollars vex to taxes by now. I don't think that's
Speaker 3: right or fair. If that happens too much, we will reconsider.
Speaker 2: Look, I know you've also looked a lot at Europe
Speaker 2: and funding and you know, especially when it comes to security.
Speaker 2: I mean, how much time are you spending making sure
Speaker 2: that defense companies, that companies in Europe have enough funding
Speaker 2: from Jaking Morgan to make sure that they can I
Speaker 2: guess defend.
Speaker 3: So we have this huge effort, you know, we deploy
Speaker 3: over the years one point five trillion dollars to help,
Speaker 3: not just as a resiliency, so there's even medicines and
Speaker 3: rare which should be defense, semiconductory defense, but it's anything
Speaker 3: that you need. Europe needs LNG. So we look at
Speaker 3: that as resiliency for Europe, not elerg in America. But
Speaker 3: shipping here is resiliency. So we we have professionals doing it.
Speaker 3: We've got Unbelieva advisory Group. We've dedicated you know, thirty
Speaker 3: forty people. We're doing research now which you might be
Speaker 3: just in of course, the shipbuilding ecosystem, of course, the
Speaker 3: active pharmaceutical system, the rare earth system. And then having
Speaker 3: public policy which puts us in a better position. We
Speaker 3: the democratic world should never have gotten here. We're so
Speaker 3: reliant on other people, potential adversaries for rare earths, and
Speaker 3: we did so. It don't quiet us build milk. But
Speaker 3: let's fix it.
Speaker 1: And we got to fix it right away.
Speaker 2: And this is good for the US. Does the US
Speaker 2: make stronger allies?
Speaker 3: This is good for the US. And I think having
Speaker 3: strong allergies good for US. So my view is we
Speaker 3: need a stronger NATO. They're doing that, by the way,
Speaker 3: so you know our president push them alive. Well, they're
Speaker 3: all doing it, which is a good thing, but we
Speaker 3: want to keep it together.
Speaker 1: The goal of it.
Speaker 3: Should be to have a stronger NATO, not a week
Speaker 3: in NATO.
Speaker 1: The goal and my view, if you.
Speaker 3: Asked me what the goal should be of our economical
Speaker 3: lady with Europe, should be having a stronger Europe. To
Speaker 3: get you to help you do the drog report, and
Speaker 3: I wrote my chairs like maybe a pipe dream that
Speaker 3: if you did the Drag Report, I would give you
Speaker 3: one big, beautiful free trade bill, That's what I would do,
Speaker 3: you know, and then fix them. There are some stupid
Speaker 3: trade issues, and fix them. But with both your calls
Speaker 3: go better. If they grew better, it be good for
Speaker 3: all the citizens, not just good for the big companies
Speaker 3: and so and I think those two things are pillars
Speaker 3: of keeping the world safe, free for democracy.
Speaker 1: So They're not a minor thing. They're a major thing
Speaker 1: you look at over twenty or thirty years.
Speaker 4: So today, how would you fix the Middle East?
Speaker 1: That I do not know?
Speaker 3: You know, I when I hear a lot of politicians
Speaker 3: and say there was no imminent threat from Iran, I
Speaker 3: might that immediately gets my backup, because a threat is
Speaker 3: when I'm threading.
Speaker 1: To do some of you.
Speaker 3: They've been raping, killing and murraying for forty seven years.
Speaker 3: Why the Western world allowed proxy wars? I mean, we've
Speaker 3: learned a lesson that we should have gone years ago
Speaker 3: at the head of the stake.
Speaker 1: We should have killed the head of the snake, you know.
Speaker 1: And so now you.
Speaker 3: Have more risk, but maybe more opportunity because people want
Speaker 3: these to the Middle East.
Speaker 1: You know, we have this.
Speaker 3: It's a terrible situation. I don't know the outcome. I
Speaker 3: hope there's a Plan C or a Plan B. I
Speaker 3: want us to prevail in the way that makes sense.
Speaker 3: I don't know what the right thing to do was,
Speaker 3: but I'm not going to share and say they weren't
Speaker 3: as ready, we.
Speaker 1: Should have done nothing.
Speaker 2: But today does the strain of horror movesment to reopen
Speaker 2: almost at any costs.
Speaker 1: It will eventually be open. I don't know. I don't know.
Speaker 3: You know, you're talking about the military has been playing
Speaker 3: for things like this for forty years. They have plans.
Speaker 3: I don't know what those plans are, and you know,
Speaker 3: I hope it works.
Speaker 1: I just don't know.
Speaker 4: I mean, what is the one thing you wishing you
Speaker 4: now given?
Speaker 2: I mean there's a lot of uncertainty in the world right, geopolitics, markets.
Speaker 4: If you can know one thing for certain from the president,
Speaker 4: what would it be.
Speaker 1: Well, I don't know about that.
Speaker 3: I just want to look. I just roll up my
Speaker 3: sleeves and try to make it better. Bet it was,
Speaker 3: so I don't guess for about one good thing or
Speaker 3: something like that.
Speaker 4: It's a complex. This is so noisy. It's like speaking
Speaker 4: to you to Mexican or It's like it's quite fun.
Speaker 1: You're doing a good job, though.
Speaker 3: You too.
Speaker 4: Thank you so much for joining us today. That was,
Speaker 4: of course, a chief executive officer of JP Morgan