That's why Jamie Dimon is so dark in the economy
Jamie Dimon, CEO of JPMorgan Chase, attested during the hearing of the Senate banking, housing and urban development committee with the title of the Wall Street companies in the Hart building on December 6, 2023.
Tom Williams | CQ-Roll Call, Inc. | Getty pictures
The more Jamie Dimon worried, the better his bank seems to do.
As JPmorgan Chase If it has become larger, more profitable and increasingly important for the US economy in recent years, his CEO of stars has loudly about what could go wrong – while things go right for his bank again and again.
In the best times and in the worst case, Dimon's public view is dark.
Regardless of whether it is his forecast of 2022 for a “hurricane” that leads to the US economy, his concerns about the world order after the Second World War or his caution to America by a two-to-two stroke of recession and inflation, Dimon seems to put up with every profit report, the TV appearance and the investor event with another warmth.
“His track record of leading the bank is incredible,” said Ben Mackovak, board member of four banks and investors by his strategic bank partner for strategic value. “His success story of making the predictions of economic calamity not so good.”
In his two decades, Dimon, 69, Jpmorgan, Dimon, helped build up a financial institution as the world saw.
Dimons Bank is a spacious giant both in Main Street Banking and in Wall Street High Finance and is a final winner in his own words when it comes to money. It has more branches, deposits and online users than any other peer and is a leading credit card and a franchise for small companies. It has a first -class market share in both commercial and investment banking and more than 10 trillion US dollars about its global payment rails every day.
“Warning shot”
A review of 20 years of Dimon's annual investor letters and his public statements shows its own development. He became CEO in 2006, and his first decade at the head of JPMorgan was consumed by the US living bubble, the financial crisis of 2008 and its long ago, including the acquisition of two failed competitors, Bear Stearns and Washington Mutual.
When he started his second decade with JPmorgan, Dimon began when the legal hangover from the mortgage crisis began to see new storm clouds on the horizon.
“There will be another crisis,” he wrote in his CEO letter in April 2015, who thinks about potential triggers and pointed out that the latest roundabouts in US debts are a “warning shot” for the markets.
This passage marked the beginning of frequent financial warnings of Dimon, including the concerns of a recession that was only triggered when the pandemic of 2020 was triggered to a two-month contraction of the market melt and the US deficit.
But it was also a decade in which JPmorgan performance began to put rivals.
After the extensive machine that Dimon supervised, achieved an annual profit of around 20 billion US dollars for a few years, began to really take its step. From 2015 to 2024, JPmorgan achieved seven annual record profits, over twice as many as in Dimon's first decade as CEO.
During this time, investors started to offer the shares of JPMorgan aggressively and to get into the idea that it was a growth company in an otherwise boring sector. JPMorgan is today the most valuable publicly traded financial company in the world and spends 18 billion US dollars for technology every year, including artificial intelligence, in order to stay that way.
While Dimon always seems to be concerned about the economy and the increasing geopolitical turbulence, the United States continues to chug. This means that unemployment and consumer expenditure were more resistant than expected and that JPmorgan enables record profits to achieve.
In 2022, Dimon told a room for professional investors to prepare for an economic storm: “At the moment it is a kind of sunny, it is fine, everyone believes that the Fed can manage this,” said Dimon, referring to the Federal Reserve that manages the post -pandemic economy.
“This hurricane is outside there, down the street and comes to us,” he said.
“This may be the most dangerous time that the world has been organizing for decades,” said Dimon in the following year in a profit publication.
But investors who listened to dimon and made their portfolios more conservative S&P 500 In decades.
“You look stupid”
“It is undoubtedly an interesting contradiction,” said Mackovak about Dimon's dilapidated remarks and the performance of his bank.
“Part of it could only be Jamie Dimon's brand structure,” said the investor. “Or a win-win narrative in which you can say that you can say it when something gets bad, and if I don't call it, and if this is not the case, your bank still chugs along.”
According to the former president of a top five -us -finance institute, Banker know that it is wiser to transmit caution as optimism. Former Citigroup CEO Chuck Prince, for example, is best known for his unfortunate comment from 2007 to the mortgage business that “while music plays, you have to get up and dance”.
“You learn that your reputation gives much more disadvantages if you are overly optimistic and things go wrong,” said the former president, who asked to stay anonymous to discuss Dimon. “It damages for your bank and you look stupid, while conversely, you only look as if you were a very careful, thoughtful banker.”
Banking is ultimately a business with calculated risks, and its CEOs have to be adjusted to the disadvantage to get the possibility that they are not repaid after their loans, said the banking analyst Mike Mayo of Wells Fargo.
“It is the old cliché that a good banker is wearing an umbrella when the sun is shining. They always see around the corner and always know what could go wrong,” said Mayo.
But other long -time Dimon observers see something different.
According to Charles Peabody, analyst of Portales Partners, Dimon has a “ulterior motive” for his public comments.
“I think this rhetoric is to concentrate your management team on future risks, whether they are going to happen or not,” said Peabody. “With a powerful, high-quality franchise franchise, he tries to prevent them from becoming complacent, and I think he is a constant atmosphere of the Room-Type atmosphere.”
Dimon is not lacking these days to worry, although his bank has achieved a record gain of 58.5 billion US dollars last year. Conflicts in Ukraine and Gaza Strip are growing, the US state debt is growing and President Donald Trump's trading policy continues to decrease opponents and allies.
Bank logos cemetery
“It is fair to observe that he is not omniscient and not everything he says becomes true,” said the truist bank analyst Brian Foran. “He comes more from the perspective that they have to be prepared for X when we are convinced that X will pass.”
JPMorgan was better for higher interest rates than most of his colleagues positioned in 2023 than the interest rates that held long -term bonds with low bonds, stated.
“For many years he said: 'Be prepared for 10 years with 5%, and we all thought he was crazy because it was 1% at the time,” said Foran. “It turned out that it wasn't a bad thing to be prepared.”
Perhaps the best explanation for Dimon's dark prospects is that financial companies can be fragile, regardless of how large and powerful JPmorgan are. The history of the financing is one of the rise and fall of institutions, sometimes when managers become mulpable or greedy.
In fact, the Banklogos cemetery that is no longer used includes three – Bear Stearns, Washington Mutual and First Republic – which were summarized by JPMorgan.
During his bank's investor day this month, Dimon pointed out that JPMorgan has been one of the few companies in the past ten years that achieved an annual return of more than 17%.
“If you return to the 10 years before, ok, many people earn over 17%,” said Dimon. “Almost every single went bankrupt. Listen what I just said?”
“Almost every single financial company in the world almost didn't make it,” he said. “It's a rough world out there.”
