JPMorgan’s Dimon Bullish on the U.S.
Jonathan Golub, UBS, weighs in on JPMorgan chief Jamie Dimon’s upbeat comments on the U.S. economy.
watching that one. the markets may be concerned about the fiscal cliff and a weak economy but during that speech today that we just heard at the council on foreign relations, jpmorgan’s ceo jamie dimon says the u.s. is still the best place to invest. this attitude somehow how woe is me, how terrible, america’s lost — it’s just not true, folks. hopes to who travel around the worle have the best military on the planet, we will foryears. we have the widest, deepest, most transparent capital markets in spite of what happened. they’re still the best — i’mtalking about in all of its glory, asset management, venturecapital,equity, markets. we have the best businesses on the planet, small, medium and large. is he right? joining us, invest strategy specialist at ubs, jonathan golub. i half-share his sentiments. are we the best player on the world stage today to invest? i think probably yes. on the other hand, we do havethese fiscal overhangs and it is not just a political issue. we have substantial government debt and fiscal imbalances thatneed to get addressed and that mean that we’re a slower grower than we’ve been. would i rather be here than anyplace?yes, i would. we have a sell-off on wall street today. you tend to take a longer term some of this is being linked to the doom and gloom about earnings season and — or expectations of doom and gloom of earnings seasons. that’s been out there for awhile. how much of that is factored in to the market and how much of it do you believe? i think some of it has been factored in. the important thing is we actually expect earnings to belower in the third quarter this year than it was in the third quarter of 2011 by about 4%. that’s not a good thing. i think what the market is selling off today on is a couple of specific company reports. cummins provided some negative statements, as did alcoa, basically said things are not only ugly now but are likely to stay ugly for a period of time. i think you’re right, if we lookbeyond this earnings season, i think the real issue issomething like 4%, 5% earnings growth next year. not as good as it’s been in the past but not a disaster. we have the election coming up and everybody’s handicapping what the market will do depending on what the outcome is. do you play in that game? i mean have you thought about it? what are your expectations? obviously we have thought about it. let’s first talk about where the expectations are. the good news is — at leastgood news for tv folks is we now have a real race. i think a few weeks ago the expectation was obama’s in office, there’s no real election. now it is getting very, very close. the key is a surprise will move the markets. romney will be positive for themarket. not only because of less regulation and things like thatbut also the fiscal cliff debate will go better with romneybecause republicans will probably own both houses ofcongress and the presidency if romney wins. to me that’s — over the next three months or so, that’s the most important issue.what if mr. romney does not win? if mr. romney doesn’t win,effectively you have status quo. we think the fiscal cliff debategoes much worse. first you don’t get the romney bounce, you probably get a bit of a sell-off on that. the bigger issue is the end of this year, i think it is going to be the summer of last yeararound the debt ceiling debate. i think it is going to be realreally ugly. what areas of the market do you like with the longer term view past the election? right. if you look out beyond just the election and fiscal cliff issues, i think the key is, if we’re in a slower economic environment, 1.5%, 2%, 2.5%, you need companies that underline earnings growth. you’ll find that in a variety of areas, you’ll find it in good staples company andtechnology companies. but being able to identify that to me is more important than simply buying dividend yields. as far as specific sectors are concerned of the defensive sectors, we would really rather rather be in staples or health care, more than utilities which we aren’t really a fan of. tech has really taken it on the chin lately, but there is the ability to grow in a weakenvironment for technology stocks. jonathan golub, thank you for joining us today.
Jamie Dimon: Not Worried About JPMorgan, Worried About Country
Jamie Dimon, CEO of JPMorgan, discusses current banking regulations, and says “we have to accommodate all of the new rules and regulations, and we are going to do it,” he says, and that “we should do these things right for the future of the United States of America, not for JPMorgan.”
if you talk about — i think to your point, dodd-frank, i think 25%’s been done. it is being fought in the courts now. huge — i think — it is really hard for me to calculate a number but i’m going to tell you it is going to cost us, overhead, well over a billion dollars.we get rules from brussels. a lot of these are contradictory, overlapping. all i want at one point as we sit down and have aconversation, what do we really immediate for safety andsoundness and all that and what’s creating unnecessaryburden. that burden is going to be higher the smaller you are, in my opinion. i’m not in favor of that. i don’t want to hurt community banks. they have a great role in life. i just think you need collaboration to get it done. it is just not going to get doneproperly if we’re just always fighting with each other. the most important — capital and liquidity. and there are 398 other rules.but you should know we’re trying to work with everyone toaccommodate — weave no choice. i mean we have to accommodate all the — we are going to do it and we’ll do it in a way in the spirit and letter of the law. that’s what we’re going to do. that doesn’t mean we won’t comment on it because regulators get very mad at me when i xwhent comment at all.we will comment. but the end of confers should be, forget jpmorgan. we’re going to be fine no matter what. believe me.i’m not worried aboutjpmorgan. i am worried about the country.we should do these things right for the future of the unitedstates of america, not jpmorgan. time for one last one here. let me apologize in advance to the many people with their hands up. it is just demand exceeds supply. well known market problem. mr. dimon, thanks. garrett mitchen and i write themitchell report. i want to ask you arguably a too big to fail question but this is not about jpmorgan chase or barclays. it is about the u.s. and china. china is on the brink of a majorchange in its leadership. it has written its own sort ofprescription for new economic directions which they know theyhave to initiate or they, too, will fall off the cliff. we may or may not be looking at a major change in leadership in this country. but we are looking at the fiscal cliff and i wonder from yourperspective asomebody who does business all around the world and despite your protestations about not really knowing much about politics, how you assess the relative chances of success moreme arica dealing in the short term with its