Speaker 1: On the economy, on markets, on the states of banking.
Speaker 1: I'm pleased to say that Blomberg's Francine Laqua so the
Speaker 1: JP Morgan Club Markets conference in Paris with a special guest.
Speaker 2: Hey, friend, Yeah, a special guest John. He's called Jamie Diamond.
Speaker 2: He runs JP Morgan and I'm delighted to speak to him.
Speaker 2: Jamie Diamond, thank you for joining us.
Speaker 3: It's happy to be here. Hey.
Speaker 2: There's a lot going on. It's trade wars, markets up
Speaker 2: and down. What did you learn in the last month?
Speaker 3: Not much other than we have all this uncertainty. You know,
Speaker 3: some preceded the new administration, like we had large deficits,
Speaker 3: intr rates going up, inflation going up, and some are
Speaker 3: you know, tariffs and things. And of course the geopolitical
Speaker 3: situation is very tense, very difficult and hard to resolve.
Speaker 2: Okay, So if you forget projections numbers, what's your hunch
Speaker 2: is the UYS going to go into a recession or not?
Speaker 3: Look, I'm going to defer to economists who give it
Speaker 3: about a fifty percent chance. I think all these things
Speaker 3: are probably inflationary a little bit more and slowing down
Speaker 3: the economy. If there's a recession. I don't know how
Speaker 3: big it'll be or how long it'll last. Hopefully we'll
Speaker 3: avoid it, but I wouldn't take it off to the
Speaker 3: table at this point.
Speaker 2: If you look at you know, the trade war and
Speaker 2: then the somewhat reconciliation between the US and China, does
Speaker 2: it hold.
Speaker 3: I think it's the right thing to do is to
Speaker 3: back off of some of that stuff, you know, to
Speaker 3: have an engage in conversation. I'm grateful they did the
Speaker 3: US UK deal. You know, it's an agreement in principle.
Speaker 3: So you know, there's a lot of one sertaty still
Speaker 3: and there's all of one certay still in the China thing.
Speaker 3: But at least we started and obviously calms down the markets.
Speaker 3: That's not the reason to do it, but the markets,
Speaker 3: you know, do voters something like that, and so you'll
Speaker 3: still have uncertainty to resolve the ninety day triggers a
Speaker 3: lot of these things, and hopefully they will be resolved.
Speaker 3: What are you with your complex? I don't expect immediate resolution,
Speaker 3: you know, it's the satisfactory of everybody in ninety days.
Speaker 2: But do you expect markets to settle from here? Because
Speaker 2: we have a little bit more of a blueprint, or
Speaker 2: it could volatility pick back up at any second.
Speaker 3: No, markets are quite unpredict well, I think there's a
Speaker 3: lot of uncertainty out there that you can't discount, you
Speaker 3: know when I you know, war in Ukraine, territory in
Speaker 3: the Middle East, you know, I ran. You know, huge
Speaker 3: deficits are tax bill, which I would like to see
Speaker 3: a good tax bill at pass. You know, the terrorists,
Speaker 3: the reaction of country to tariffs. The EU and the
Speaker 3: UK are about to negotiate. I think they have a chance
Speaker 3: to actually develop a great relationship, you know, partially making
Speaker 3: up for you know, the disaster the Brexit became. And
Speaker 3: uh so, yeah, those those are unsurgerties. You can't eliminate
Speaker 3: them because you want to.
Speaker 2: But what are your biggest clients saying about this market volatility?
Speaker 2: Have they made money on the back of it?
Speaker 3: Yeah? Some, you know, some doing some don't. And you know,
Speaker 3: volatility volatier would be good or bad depending on you know,
Speaker 3: who's who's facing it. So but I but I would
Speaker 3: expect continued volatility. I think it's a mistake to think
Speaker 3: we can go through all the things we're going through,
Speaker 3: and the volatility itself will come down.
Speaker 2: Has it been good for JP margin, you know, trading.
Speaker 3: Volic Yes, because when this volatility is a very simplistic
Speaker 3: way to look at, bread's gap out and traders make
Speaker 3: more money if there's more volume. So we had both
Speaker 3: this time, more volatility, more volume. But it's very often
Speaker 3: you have a lot of volatility and spreads gap out
Speaker 3: there's much less volume. So you've seen examples where there's
Speaker 3: good volatility and there's bad volatile. This one happened to
Speaker 3: be good, the next go around may not be so good, Jamie.
Speaker 2: When it comes to financials, I mean, you know a
Speaker 2: lot of I guess non bank entrants are making quite
Speaker 2: a lot of way Citadel Jane Street, is that a
Speaker 2: you know, a concern for the banks. Shouldn't be a
Speaker 2: problem for the banks.
Speaker 3: I would call it a problem. You know, they're both clients.
Speaker 3: I'm very capable, you know, but I've always had the
Speaker 3: view there are a lot of competitors out there, and
Speaker 3: you know, all the major banks are back. I think
Speaker 3: that's a good thing for the world, you know, maybe
Speaker 3: not so much for Jamie Morgan. There's you mentioned those two,
Speaker 3: there's Apollo. There's a lot of FinTechs, some very good ones.
Speaker 3: There's Stripe, there's PayPal. Yeah, my view has always been
Speaker 3: the same. I tell the magic Assume competition. Assume they're
Speaker 3: coming at you in every angle. Assume they often have
Speaker 3: their own strengths. Sometimes their own weness is they won't
Speaker 3: all do great, But yeah, I think they're you know,
Speaker 3: some of these people gaining quite a bit of shared
Speaker 3: in parts of the business. We still are too, by
Speaker 3: the way, so you know we're in the fight. We're
Speaker 3: not losing out very much. But that doesn't mean you
Speaker 3: won't lose out tomorrow because you're winning today.
Speaker 2: So what do you have to do today? How do
Speaker 2: you see the people that are doing you know well
Speaker 2: today doing even better tomorrow.
Speaker 3: It's about us are other people both? It's quality to
Speaker 3: people you interviewed Prinav, I mean we have exceptional people
Speaker 3: and investment, banking and sales and training, and say I
Speaker 3: put right next to that technology. But it's related because
Speaker 3: those people deploying technology. So there are thousands of technology
Speaker 3: projects and then there are hundreds of AI projects, all
Speaker 3: of which are meant to do a better job for customers,
Speaker 3: consumer research, how we deliver things to people, and if
Speaker 3: you don't move. You know you're going to be left behind.
Speaker 3: I mean, I remind you could be a country or
Speaker 3: a company. You do not have a divine right to success.
Speaker 3: You know, we mentioned as management learnings as I did.
Speaker 3: You can see it on YouTube and all that. But
Speaker 3: I put out to people, look at the bank, look
Speaker 3: at no Key, BlackBerry, Sears, Kmart Bearster Lehman, I can
Speaker 3: chapter of diverse a failed companies usually because they're complacent, arrogant.
Speaker 3: They think they're on the top of the top of
Speaker 3: the world and they're not. They're competitors coming everywhere, and
Speaker 3: you should assume that's gonna be true.
Speaker 2: Do you see competitors coming for the US?
Speaker 3: Yeah?
Speaker 2: Where are Europe?
Speaker 3: Are about the countries?
Speaker 2: The countries?
Speaker 3: Yeah, yeah, I think Europe. Let me just ask. I
Speaker 3: think Kere Starmer, Mers and Macrone. I think Macrone is
Speaker 3: one of the best political leaders in the planet today. Okay,
Speaker 3: I think Kre Starmer is smart, devoted. They're saying the
Speaker 3: right things public and privately, all of them talking about
Speaker 3: growing the economies, thank god, pro business, pro capital, and
Speaker 3: they're doing all of that to improve the lot of
Speaker 3: their citizens. It's not about what they're doing for JP Morgan,
Speaker 3: And if I was europe absolutely I'd want to great
Speaker 3: live in the UK military econom and I would reform
Speaker 3: as best I can in all of European things. What
Speaker 3: they're all talking about now, deregulation, simplification, and yeah, they
Speaker 3: try to compu to America, and that would be good
Speaker 3: for America. That doesn't make me sad. It makes me
Speaker 3: happy that they're strong. And then you know their allies.
Speaker 3: I want our allies to be strong and powerful militarily
Speaker 3: and economically.
Speaker 2: Do you worry about US supremacy actually exceptionalism, Yeah, I.
Speaker 3: Look, I never believe her quite that exception. I mean, remember,
Speaker 3: America is an unbelievable country with freedoms and the gifts
Speaker 3: of God and you know, water, food, energy, and then
Speaker 3: the gifts of founding falls called freedom of religion, freedom
Speaker 3: of speech, from enterprise. That was dwarf everything. And so
Speaker 3: we still have the most prosperous economy the world's ever seen.
Speaker 3: But the Americans shouldn't take it as a divine rights
Speaker 3: sace either. We slowed ourselves down with regulation, stupid bureaucracy.
Speaker 3: You know, we don't we're not getting we haven't done
Speaker 3: budgets in years. You know. So now we shouldn't assume
Speaker 3: it's forever. I don't think are will still be pre eminent,
Speaker 3: you know, militarily and economically for a long time, you know.
Speaker 3: But if we don't do everything right, we can lose
Speaker 3: that too. You have twenty thirty forty years from now,
Speaker 3: and I think very important that is America. The goal
Speaker 3: of America should be to help the military alliances of
Speaker 3: the Western world and to help the economic alliance of
Speaker 3: the Western world to walk side by side like you
Speaker 3: did in victory in Europe day the other day here
Speaker 3: to strengthen the Western world and hold it together, you know,
Speaker 3: not the cause of the fragments, and so I think
Speaker 3: we have to work hard to make sure that's the case.
Speaker 2: Do you worry about the deficits and do you worry
Speaker 2: actually in the US And do you worry USO about
Speaker 2: the US dollar remaining as a reserve currency. Do you
Speaker 2: think Europe has what it takes to try and put
Speaker 2: the euro in there?
Speaker 3: Yeah, So I think I should have mentioned deficits up
Speaker 3: front as being one of the issues you have to
Speaker 3: deal And I think acid prices quite high too, and
Speaker 3: those create various risks for America. Our deficit is almost
Speaker 3: two trillion dollars six or seven percent of GDP, the
Speaker 3: largest peacetime deficit ever. And we have one hundred percent
Speaker 3: debt to GDP. That one hundred percent debt to GDP
Speaker 3: is kind of universal almost around Europe on average, but
Speaker 3: your deficits is are much smaller. Does that create a risk? Absolutely,
Speaker 3: it creates a risk of inflation. To me, it creates
Speaker 3: a risk of higher long term rates. Well, you know,
Speaker 3: but America will the dollar that week? I don't know that.
Speaker 3: That's a slightly different. I think you could see rates
Speaker 3: go up, the long bond rates go up, and you
Speaker 3: know that might slow down to growth, and that's how
Speaker 3: we you know, kind of a stagflation kind of scenario.
Speaker 2: Would you, I mean you must see President Trump regularly.
Speaker 2: What do you what do you tell? What would you tell?
Speaker 3: I talked to all of us. I talked to all
Speaker 3: of the folks there. I wrote about my Chairman's letter.
Speaker 3: I mean we have first of all, America should worry
Speaker 3: about things we can do better. You know, I call
Speaker 3: it blue tape. I mean our regular we are out
Speaker 3: of control. We're doing the same stuff that they did
Speaker 3: here that you know virtually you know, the American publican
Speaker 3: don't know. The GDP per person in Europe has gone
Speaker 3: from something like ninety percent of Americas to sixty five percent.
Speaker 3: And they did it to themselves. Rules, regulations, over complication.
Speaker 3: They started the European Union, which I think is a
Speaker 3: huge accomplishment of mankind. They got to finish it. And
Speaker 3: here they they called the Capital Markets Union, the Banking Union.
Speaker 3: You know, they have to create a big common market
Speaker 3: of four and fifty million people. And so in America
Speaker 3: it's the same thing. It's regulations, it's permitting. You know,
Speaker 3: we've overdone. We've wasted a lot of money in the
Speaker 3: green economy. It's getting jobs back, it's training in schools,
Speaker 3: it's fixing immigration. So we've stopped at the border. But
Speaker 3: now we have to have a more merit based immigration,
Speaker 3: more seasonal immigration, you know, things that can help the
Speaker 3: country grow. And then we have to work in our
Speaker 3: military alliances and economic alliances. And that's for the sake
Speaker 3: of the future free and democratic world.
Speaker 2: So on the economic alliance, is there a concern that
Speaker 2: actually certain countries in Europe or elsewhere will choose non
Speaker 2: US bank from bondishferences, will choose non US asset managers
Speaker 2: to manage their pensions.
Speaker 3: Yeah, there'll be a little of that, you know. I mean,
Speaker 3: we irritate a lot of people, so I rout into them.
Speaker 3: They say, you know, like they're not buying our you know,
Speaker 3: Kentucky bourbon or stuff like that. There'll be some of that,
Speaker 3: And I think it's perfectly reasonable for you know, I
Speaker 3: spoke a lot of investors here. They're thinking about the
Speaker 3: ass allocation of the United States, Well, they diminished it.
Speaker 3: Possibly is America a bad investment destination out If you
Speaker 3: could take all of your money and put it in
Speaker 3: one country, it would still be America. I mean, it's
Speaker 3: still the most prosperous nation of the planet. It's got
Speaker 3: the best military in the planet. It's got huge amounts
Speaker 3: of immigrant innovation. People are catching up. That's a good thing.
Speaker 3: You know, China's doing some very good innovation and medical
Speaker 3: and AI, and we should assume they're continue to do that.
Speaker 3: But America still got the best. Our GDP versus eighty
Speaker 3: five thousand dollars, you know, China's fifteen thousand dollars. But
Speaker 3: other than they're ashamed about we should fix our problems
Speaker 3: because we could grow a lot faster, which help all
Speaker 3: of our citizens.
Speaker 2: But if you put to too many tariffs and actually
Speaker 2: too much uncertainty, does that not squander actually a lot
Speaker 2: of the assets that they used.
Speaker 3: I think they're doing the right thing now, which is
Speaker 3: the back off of it. Let you know, the Secretary
Speaker 3: of Treasury do the hard work of figuring out what's
Speaker 3: the right thing to do. If they're unfair trade things,
Speaker 3: do something about it, you know. But they have bet
Speaker 3: off of specific things and specific industries, and I think
Speaker 3: that's the right thing to do. I think the first
Speaker 3: thing is very large, that everything in everywhere all at once,
Speaker 3: and now they're kind of backing to where I think
Speaker 3: they should be in terms. But even at this level,
Speaker 3: it caused that kind of uncertainty. Even this level, you
Speaker 3: see people holding back on investment and thinking through what
Speaker 3: they want to do, you know, thinking about, you know,
Speaker 3: how much you're gonna put in the United States, and
Speaker 3: I mean, we're gonna be okay. But it is causing
Speaker 3: that uncertainty.
Speaker 2: We're looking at the president of course, in the Middle East,
Speaker 2: where there were seals that you know, deals that were
Speaker 2: signed and a lot of wall streets. Some of your
Speaker 2: competitors say what's your strategy for the Middle East? How
Speaker 2: much do you want to grow there?
Speaker 3: Well, we grow everywhere. I mean, you know, we go
Speaker 3: country by country and we look at you know, we
Speaker 3: bank country, cities, schools, states, hospitals, big companies everywhere. We
Speaker 3: have a network effect. So when we bank Bloomberg, we're
Speaker 3: banking the United States. We're banking you in London, in Paris,
Speaker 3: we're banking you in Europe, We're banking you in the
Speaker 3: Middle East. That's what we do. So almost every one
Speaker 3: of those countries we're growing. As they grow, we grow,
Speaker 3: we cover more of their institution overseas were institutional in
Speaker 3: the United States. We also have a consumer and so
Speaker 3: you know, as you know, we're testing the consumer and
Speaker 3: chase UK to them.
Speaker 2: Yeah, and you're growing actually that retail business a lot
Speaker 2: in the UK. What's next for that?
Speaker 3: I hope to We hope to grow more in the UK,
Speaker 3: add some products and eventually we've already anounced we're going
Speaker 3: to go to Germany. But I think we have a
Speaker 3: chance to build a great digital bank, and we have
Speaker 3: competitive advantages. We have a brand, we have research, we
Speaker 3: have a balance sheet, we've got capabilities. We're going to
Speaker 3: add you know, we're not gonna announce it today. We'd
Speaker 3: add more capabilities over time, so that and then someone
Speaker 3: like you, if you travel the United States and to
Speaker 3: the UK, you're gonna be able to move your money
Speaker 3: between Chase US and Chase UK on your phone. So
Speaker 3: we're add things that make your life better as a
Speaker 3: consumer of our banking product.
Speaker 2: You certainly caught some waves in uh, you know, talking
Speaker 2: about return to the office. I think there might have
Speaker 2: been a little bit swearing at bit there or not.
Speaker 2: People listened, Yeah.
Speaker 3: Back full time listen. First of all, I tried, I
Speaker 3: did a mote dare I you know, people know me
Speaker 3: and I don't really care about that. I don't worry
Speaker 3: about it, but I answered, I want to answer. The
Speaker 3: guy asked a legitimate question and I gave it a
Speaker 3: very detailed answer about why it doesn't work for young people,
Speaker 3: why it doesn't work for management, why it doesn't work
Speaker 3: for innovation. I completely applaud your right to not to
Speaker 3: want to go to the office every day, but you're
Speaker 3: not going to tell JP Moore what to do. And
Speaker 3: I think we already have ten percent of jobs at home.
Speaker 3: I'm not against work from home. I'm against work from
Speaker 3: it doesn't work. And then of course the press made
Speaker 3: a big deal about the petition and all that. It
Speaker 3: was like not even Mosquito. Most people back some people.
Speaker 3: We've had no additional attrition, you know, we had to
Speaker 3: make some modificate, you know, we didn't have enough seats
Speaker 3: in certain areas. And it will be a better company
Speaker 3: and I think our employees will be happier over time,
Speaker 3: and the younger people learned the right way. You know,
Speaker 3: it's an apprenticeship system and you can't learn working from
Speaker 3: your basement.
Speaker 2: Jamie Diamond, thank you so much for joining us today.
Speaker 2: That was, of course, the chief executive officer of JP Morgan.
Speaker 2: I'm going to send it back to you in New York.
Speaker 1: John front Sine, thank you appreciate the update over in Paris,
Speaker 1: France with Jamie Dimon, the CEO and chair of JP
Speaker 1: Morgan