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Jamie Dimon: CEOs Shouldn’t Make Earnings Forecasts

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Jamie Dimon, chairman and CEO at JPMorgan, sat down with host Stephanie Ruhle on Bloomberg TV’s new flagship morning program, Bloomberg <GO>. He discussed the reputation of banks following the financial crisis, his perspective on the Chinese economy, concerns over tech valuations, regulation, and his approach to dealing with the U.S. government to protect the bank and its customers.

Dimon said corporate leaders shouldn’t give earnings guidance because they can’t predict the future: “If I was a CEO don’t make earnings forecast! You don’t know what’s going to happen every quarter and I don’t even care about quarterly earnings. Let me say this just outright, I don’t care about quarterly earnings. I’ve never done anything for quarterly earnings. As a matter of fact our quarterly earnings are based upon decisions that have been made over the last 5 or 10 years. And by my predecessors.”

Dimon: Banks ‘Got Tarnished’ By Financial Crisis

Dimon: Took Steps to Prepare for Commodity Volatility

Dimon: ‘A Long Time’ Before China Overtakes U.S.

Dimon: I Am Not Going to Run for President

Dimon: Tech Valuations Are ‘A Little High’

Dimon: Impossible for Banks to Fight U.S. Government

Dimon to CEOs: ‘Don’t Make Earnings Forecasts’

On why bank CEOs don’t fight back against government fines, Dimon said: “It’s impossible for a bank to fight the United States government. And what you’re trying to do is minimize the damage to your company as best you can. You know the alternative would be to go to court, fight in 5 or 6 different courts, you know be dragged through the mud for years and you’ll still end up paying that kind of money.”

When asked about his future in politics, Dimon said: “I’m not going to run for president…just because you’re a good CEO does not mean that you’re going to necessarily be a good politician.

On China, Dimon said: “They’ve got huge issues. You know it’s going to be long time before they overtake America in any way, shape or form.”

On raising interest rates, Dimon said: “Normalization raising interest rates is a good thing. And it will actually reduce uncertainty.”



  • Dimon: ‘Cery happy’ W/latest Quarterly Result
  • More unified regulatory system needed in US
  • ‘Impossible’ for banks to fight US government
  • No change in us regulatory system next couple of years
  • On Glencore: ‘Very talented and bright company’
  • Tech valuations a little high
  • Everyone seems to look for next black swan
  • Raising interest rates will be a good thing; will eliminate unvertainty
  • ‘A Long Time’ Before China Overtakes U.S.
  • Wouldn’t want to go into government
  • ‘I don’t care about quarterly earnings’
  • CEO’s shouldn’t make earnings forecasts
  • Still sees good opportunities in Africa
  • Still supports Eurozone concept; sees lower growth in Europe
  • Good investment opportunities in Europe
  • Gained market share in some areas in Europe
  • On running for office: ‘Absolutely no chance’

Bloomberg <GO> airs weekdays from 7-10am ET on Bloomberg Television and is also available for free on livestream: http://www.bloomberg.com/live.

STEPHANIE RUHLE: You are watching Bloomberg GO and we want to welcome all Bloomberg Radio listeners. With me now, Chairman and CEO of JPMorgan Chase, Jamie Dimon.

Jamie, welcome. Any day is a great day to talk to you. But today specifically. Last week when we got JPMorgan numbers we were actually saying, disappointing. But put it into context. What we got out of Goldman, the massive loss out of Morgan Stanley, and Credit Suisse and Deutsche restructuring, raising capital. What gives in the banking industry?

JAMIE DIMON: You know I was very happy with our results. We had like a 12% return on tangible common equity which is double what a lot of other people are doing. Market shares are up in almost every business. And you know listen we have vicissitudes. I think people overreact to short-term stuff. I also think when we compare actual results with estimates and the estimates are changing all the time, I don’t really actually care about that. To me it’s the banker’s shares, clients, are we gaining, becoming better every day? And I feel very good about where we are.

RUHLE: Well you’re gaining market share against your competition.

DIMON: Yeah.

RUHLE: What are they doing wrong? When you look at what’s happening, Deutsche Bank over the weekend, a restructuring that massive, it’s like Anshu Jain’s entire power mafia out the door. How does that affect the way you think?

DIMON: Listen I, we compete with people around the world and I wish them the best. I want to make sure we do well. So we want to stay focused on serving our clients around the world. Consistent, we’ve been very consistent for years about how we go about doing that. We haven’t changed our strategies.

All the banks however are modifying their business for the new rules, which we have to do. And hopefully we’ll be able to do that without too much effect on our client business.

RUHLE: Are we at a risk of getting over-regulated. Hillary Clinton who seems to want to double down on Dodd-Frank, you’ve said hey Dodd-Frank cleaned us up. We’re all better for it. What happens if you get Dodd-Frank squared?

DIMON: Yeah I don’t think it’s just Dodd-Frank. There’s Dodd-Frank, there are FSB rules, there are Basil rules, there are interpretations of rules, there’s if you take all of it, some of the things are quite good. And some, I don’t agree with you know? And I’m not going to sit here and complain about them. They are what they are. I’ve been advised by my regulators, just deal with it.

And we’re just going to deal with it and take the appropriate actions. And I do think there may be some adverse consequences down the road–

RUHLE: Like what?

DIMON: And maybe one day it will be modified a little bit. You know too much capital, too much liquidity, too much rigidity in how a bank can function in bad markets. I think you see a little bit in market liquidity today. And you know JPMorgan’ll be fine. So I’m not complaining about JPMorgan. I just think some of these rules may have unintended consequences that we don’t see yet.

RUHLE: Specifically where? Would you say the high yield market? Because that’s where clients are saying, I’ve got no liquidity, you know, I can’t seem to find anyone to help me. Is that where you’re finding the toughest times?

DIMON: So let me say, the regulators would say as long as the system is safer it’s fine. And if you have a little bit more volatility and a little wider bid ask spreads. And there’s some truth to that. Where you don’t want to happen is that one day it really affects the primary markets and that somehow the financial markets reverberate back to the real economy.

And that’s why if I were a regulator that’s what I’d be focusing on. But absolutely lower bond inventory, certain regulatory requirements, are constricting people’s ability to make markets. And you see a little bit of that in the volatility in the markets.

You see a lot of it in what I call, the bid ask spreads are still kind of narrow sometimes. What you’re seeing is the breadth. Can you move $200 million of Treasuries? Can you move $100 million of Ford Motor Credit? Can you move $100,000 of high yield bonds? And the answer that you really can’t without spreads gapping out.

RUHLE: Well then this takes us to ETFs. We’ve got you know ETFs guys saying this is the best place to be. Retail investors should be there. But maybe that’s the original ETFs that were designed with plain vanilla equities under them.

But now that you’ve got high yield ETFs when the market is stressed and liquidity is at a premium, could ETFs today be the CBOs that plagued us in 2008?

DIMON: I don’t think it will quite be as bad as the whole mortgage issue we had. There’s this issue about having immediate liquidity on something with the underlying assets aren’t immediately liquid. And you know, the regulators will think about rules on how to manage that.

And I think the ETF players also think about how they can manage through that. And some think it’s fine. Some are a little worried about it. But I yeah I don’t think that’s a systemic issue to tell you the truth. It could easily create more volatility and we’ve seen that a couple times in the market.

RUHLE: Do the regulators know what to ask for? Do we need, we talk about smart regulation and the need for it. We haven’t seen any consolidation among the regulators. We haven’t seen budgets increase. So the same regulators who are walking into your office pre-London whale are the same people today. They haven’t gotten any more funding. So is there smart regulation?

DIMON: I don’t know if you’re right about the funding side. Because there are a lot more regulators which somehow we paid for. So I–

RUHLE: OK right there. So who’s paying for it? You in fines?

DIMON: We pay. No we pay $1 billion a year to the FDIC. We pay hundreds of millions of dollars a year in bank taxes in the UK. And we pay, I think we pay for the regulators who we have on site. And there are clearly a lot more of them. And so we’re paying for the overhead of that.

RUHLE: Is that fair?

DIMON: It’s fair as long as, I think hard is fair. I don’t think there should be special taxes aimed at banks, I think that’s unfair. But paying for your own regulations is completely fair. But I agree with you by the way, and I think the regulators would agree too. There are too many.

And it causes too much confusion and it’s hard to, in certain areas you can’t, like in mortgages, there’s so many people involved in mortgage policy that we still haven’t finished mortgage policy. And it’s actually hurting America.

So I think if you can get them all in a room and say, let’s finish exactly what the mortgage policies will be in terms of underlying servicing standards, qualified mortgages, skin in the game. It would be better if we finished that. But if you have 5 or 6 people with jurisdiction and each one is considered independent, it’s hard to get them to the table.

So I think it will be better down the road, I don’t think it will happen while I’m still at JPMorgan, that we kind of skinny down how many regulators there are.

RUHLE: Is Washington listening to that message coming from you? Or is it still a very adversarial relationship?

DIMON: They’re not listening. They have a lot to do; they’re exhausted too by the way. They’re trying to implement what they’ve been given the job by legislators. And so they’re trying to get that done. Privately a lot of them know that there are too many regulators and too many rules and they want to make it simpler.

Over time that will probably happen. It’s just not going to happen in the next couple of years and so–

RUHLE: OK so privately, schmivately. That means it ain’t happening in our lifetime. And we’re living in a short-term environment.

DIMON: It won’t happen in the next couple years. It’s possible that people will look back and eventually say let’s look at these things and improve them. Simply, strengthen, improve. Change the things that didn’t work. Add things that might be better, that would work.

RUHLE: Those are beautiful words.

DIMON: I know.

RUHLE: Is any of it actually happening?




RUHLE: Then I take you to Donald Trump. Last week when I sat down with him I asked him about bank regulations. He specifically said Jamie Dimon, I really like the guy. But what he didn’t understand is why people like you and other bank CEOs in his words “roll over and settle.” He said, “the fines they’re being hit with are so ridiculous, they’re so much, why doesn’t a guy like Jamie Dimon who’s tough as nails, fight back?”

DIMON: It is very, very, we have a lot of constituency. So I have 250,000 employees. We bank 15 million households in America. We bank in 150 countries around the world. You know and you’ve got to do what’s right for your company, whether or not you agree with it.

It’s impossible for a bank to fight the United States government. And what you’re trying to do is minimize the damage to your company as best you can. You know the alternative would be to go to court, fight in 5 or 6 different courts, you know be dragged through the mud for years and you’ll still end up paying that kind of money.

RUHLE: So Donald Trump just, he’s never been in your seat so–?

DIMON: Look maybe he would have done a better job if he was in my seat. But I don’t know.

RUHLE: But are you in a more–

DIMON: But I’m not going to jeopardize my company. And you know, at the end of the day, banks are, you know, if governments don’t, we have to operate under the laws of the land. Which we’ve always done around the world. And we can’t afford to take an indictment of certain sorts. I mean it could damage the company so much that we go in generally say we want to settle. You know please listen to us.

When I went to see Eric Holder, I didn’t go down painting (PH) the table. I said, Eric I’m here to surrender. You’re my judge and my jury. I have no choice. But before you pass judgment please listen to what I have to say. And I went through Bear Sterns, I went through WaMu I went through all the wonderful things, the cities, states, schools, hospitals. You know TARP was $700 billion. Bear Sterns and WaMu were at $600 billion. We did a lot.

I think we got some credit for that, so they’ve said. I don’t know how they came to the numbers.

RUHLE: You definitely did. I remember watching you that day, walk in. You walked in by yourself.

DIMON: Yeah.

RUHLE: But does it put you in a position where you become a whipping boy? Where you’re just saying “thank you sir may I have another?” and they go what? You took that fine? Oh by the way I’ve got another twice as big. How do you regain a position of power?

DIMON: I’m going to leave that to you guys to look at the proportionality of all those fines and stuff and what was fair or not. I just don’t want to comment. I’m trying to do the right thing for my company. You know I’m trying to get some of this stuff behind us.

RUHLE: Let’s talk about banks who aren’t in the position that you are. You are the biggest. When you look at your performance right now, one could say you are the best. Those who aren’t in your position, do you think they’re going to fade away in the next two years? What is banking going to look like with the increased regulation? With banks unable to be in some of the more sophisticated businesses, what is it going to look like in five years?

DIMON: So first of all–

RUHLE: You’re not going anywhere.

DIMON: I always, I hope not. I always look at it from the standpoint of the client first. Don’t look at it from the standpoint of the bank first. So if you say large corporations, they’re going to need equity, debt, derivatives, M&A, cash management, all those services we provide.

And if you look at consumers, they’re going to need deposits, investment advice; you know credit cards, debit cards, all those services we provide. More and more on the mobile phones and all that.

If you look at middle market companies we bank 60,000 in America, they’re still going to need what we provide. So of course we’ll be there. And the question is who’s going to be providing these services in the most economic way that clients are happy? I point out our clients are very happy with us. Customer sat scores have never been higher, ever. You know–

RUHLE: Then why does populace opinion still hate on banks every chance they get?

DIMON: You know banks got tarnished you know? TARP became a scarlet letter. And that all the banks were bailed out which fundamentally is not true. But I would urge the people, look at what banks did. So a lot of the big banks, a lot of small banks too, they lent money, and this is a really important fact, throughout the whole crisis, rolled over revolvers for large companies, middle market companies, small businesses, individuals et cetera, at the same price.

You know the market doesn’t care. The market just pulls right out you know? But we kept on rolling over. And I remember getting phone calls from competitors saying why are you rolling over revolvers, 175 over Libor when their bonds are trading at 800 over Libor?

I said because we’ve got to be there in good times and bad times for our clients. So if we just pull out every time there’s something bad. Those companies will go bankrupt. And so we lent trillions in the worst time of all and believe me it was gut wrenching some of the things we had to do. And hoping that it would make sense. And we didn’t do it for profit. We did it to keep these companies alive.

RUHLE: Then Jamie why haven’t you been able to tell that story and have it stick? As we head into the election hating on Wall Street is going to be a general theme.

DIMON: Yeah. There’s nothing I can do about that.

RUHLE: Why? Why is there nothing you can do about that? When I look at tech companies, when I look at what Meg Whitman gets paid $23 million last year at a company that’s stock went one direction, nobody blinks. Yet people are all up in your business if you go to play golf or you buy a new couch.

DIMON: I don’t play golf.

RUHLE: People want to know what Jamie Dimon is doing with that money. Why bank CEOs are getting overpaid. Why does there continue to be focus on you? Why haven’t you been able to change the narrative?

DIMON: Because that’s the narrative you know? When the narrative was that all the banks were bailed out and you know that became the narrative. And you can’t battle that narrative. All I can really do is tell the truth. Work–we’re the good, the bad, the ugly. We tell the truth every year about everything. We admit our mistakes. We try to fix our mistakes and serve the hell out of clients.

And our clients like I said are quite happy with us. Including cities, schools, states, hospitals. I travel around the world. Mayors, governors, prime ministers, presidents, they want more JPMorgan. They say you guys have been great corporate citizens. You’ve been great with our clients. Thank you for the things you do. And that’s the best I can do.

RUHLE: All right let’s talk about–

DIMON: We’re not going to be able to rewrite the narrative, at least not in the short run. And you guys in the press are the ones who actually, if there’s something that’s going to be rewritten it’s going to be written by the press, not by a bank CEO.

RUHLE: Well you’ve got to tell your own story which is why you’re here. Let’s talk about different clients you have. Hedge funds for example. We’re seeing macro funds really get hurt last week. For Fortress to close their macro effort. If we weren’t in a position with all this regulation, would you be in the same place as the buy side is? Hurting?



DIMON: Because we have a different function. Hedge funds are trying to make money for their investors. We actually look at it more like a business. We’re one of the biggest market makers in the world. We’re trying to give you good prices, good execution, good prices, good inventory. Constant service and stuff like that. We call it flow business. And that flow biz goes up and down. But we’re not betting on what people think is going to happen in the macro environment.

RUHLE: But when long-term capital went down those who were their counterparts, they were hurt too.


RUHLE: Could we see JPMorgan how are you positioned right now? Could you hurt like your clients are?


RUHLE: And that’s due to regulation?

DIMON: We don’t have, no it’s got nothing to do with regulation. It’s got to do with how we manage the exposures we have. We don’t take any exposures to anybody that’s bigger than a certain amount. So we always try to limit it think of pockets or risk. And that’s by country, by client, by investor, by business line, by industry. So our risk is always managed that way.

Even in the middle of the crisis our exposure to any major global counterparty was you know, generally a billion or less.

RUHLE: Last week you said you stress tested oil prices down to $30. What does that mean you stress tested?

DIMON: So in oil the big issue is now that reserves are, oil prices are $50, $48 whatever today. Reserve based loans, this is loans where the asset, the well itself, the cash flow that comes out of well is going to pay back your loan. So obviously at $45 or $50 oil you know you go look at it.

We’ve also taken all those loans and said what happens if it’s $30 for 18 months. And what I said publicly is we think if it’s $30 for 18 months, we’ll probably have to put up another $5-600 million in reserves. I mean it could be $750 or something like that. But if you size that it’s not that big a deal is what I’m saying.

So just because you put it up in reserves doesn’t mean you’re going to lose it.

RUHLE: You got out–

DIMON: You’ve seen a lot of these oil companies do a very good job reducing their cost, increasing their cash flows. You know sometimes putting more equity into their wells, their businesses so they can survive.

RUHLE: Understanding they’re a client of yours; do you have a view on what’s happened to Glencore? Many have said they lost the plot. They jumped the shark.

DIMON: I’m not going to speak about Glencore particularly. I think they’ve been a very talented bright company for a long period of time. And no company doesn’t, you know, hit a bump. Every company I know ever has had that problem. The strength of a company is usually how it gets through that kind of stuff. Not whether they don’t have it or not.

RUHLE: So you view it simply as a bump not as, if the smartest guys in the room are getting hurt watch out because we could really see bad times ahead for the commodities space, specifically oil.

DIMON: Well look, I don’t know why everyone is always so surprised. OK? Commodity prices have moved 15% consistently over my whole lifetime. It only takes, you know, oil, supply and demand, 90 million barrels a day. I mean supply went up to 92 and demand was 90, prices fell 50%. Those kind of moves happen in cotton, corn, soy beans, wheat, you know, sugar, cocoa, you name it.

Interest rates, stocks. No one should be completely shocked when supply and demand gets imbalanced that prices move dramatically. So the goal of a JPMorgan is to be prepared. I’m not predicting it. I’m just saying we’re prepared for it. Those things happen. And I think a lot of players are they know those things can happen.

And the best players, when they come out of it, will probably do quite well actually.

RUHLE: And are you writing a handwritten thank you note to the regulators who made you get out of the physical commodities business? Because had you been in it today, you might be facing a rough bump like Glencore is.

DIMON: No. We never, again we’re not directional. So we had never had huge positions in physical or something like that. You know that we would have lost that kind of money.

RUHLE: Let’s talk about shadow banking for a moment. You had publically said “regulators need to pay attention to shadow banking, that could be a big risk.” Hillary Clinton has said the same thing. What would you, I’m assuming you still have the same position. But what would you say to Hillary Clinton she’s noted it as this is a risk. What should she do if she’s next president?

DIMON: First of all, I’m in favor of competition. So I’m not against shadow banks, non-banks competing banks or any of that stuff. But I do think if you’re a regulator you should be looking outside just the banking system. Particularly since more and more things are going there. A lot of the mortgage business has gone outside of banking. The FHA business has gone outside of banking.

You see a lot of competitors out in Silicon Valley which I think is a good thing. And they just should be paying attention to it. And they are by the way. You see the CFPB and a bunch of other people looking at peer-to-peer lending and all that. So it’s just to monitor.

I don’t think any of that stuff is systemic risk.

RUHLE: You don’t?

DIMON: At this point no.

RUHLE: The size of private equity firms getting as massive as they have been, really taking businesses that you’re no longer in, that doesn’t to you seem like it could pose a systemic risk?

DIMON: No because they are long-term investors in equity. And if things go down they’re not going to have a run in the bank or something like that. But it’s possible somewhere in all these things that are being developed; something will create a systemic risk. I just don’t think they’re big enough yet to do that.

RUHLE: You mentioned companies out in Silicon Valley as we look for other potential bubbles in the market do you look at tech valuations and get concerned when suddenly real money investors are racing to get into private funding rounds. Is this a warning sign for you?

DIMON: It’s a little high but let me just give you some big numbers because I’ve asked this question.

RUHLE: I love big numbers.

DIMON: So the unicorns, I think if you go back a year or two years, there were 17 of them. These companies valued over $1 billion. And now there’s like 117. The values were $100 billion and now if you take it in total they’re almost $600 billion. Now that’s a big number.

Now to justify that by the way, if you take the whole portfolio of 117, if you’ve got some big winners and a couple winners, it may justify the price. So it’s hard to tell. But at 600 and 100 companies there’s going to be some risk there.

Again I wouldn’t put it in systemic. The value of all securities in America is like $100 trillion. So $600 billion if it goes in half isn’t going to destroy anything. And these are also equity investors. The other thing I want to point out which I didn’t completely realize, a lot these things have resets that go lower. So they’re not really valued, something’s not really valued at $1 billion if the person who buys at $1 billion gets a reset if the next round is a lower price.

So that’s a slightly different thing. I’m not quite sure how that works; it may be different in different cases.

RUHLE: You seem to be cool, calm, and collected. Then what are you worried about most? In terms of when I listen to Carl Icahn and his webcast say, doom ahead! The end is near!

DIMON: OK I think everyone’s become a risk expert now. And everyone’s looking for black swans behind every rock and every seed. And they’re constant–

RUHLE: Isn’t that a good thing?

DIMON: No. They’re constant warnings out there. But what do I say? Wherever I travel around the world, companies still want to expand. The global economy is still growing at 3%. The United States is growing at somewhere between 2 and 2-1/2. We’ve added 10 million jobs in the last 6 or 7 years. And I can, I always can make a list of things that might catch you off guard or surprise you.

You know one of our great economists Mike Sen (PH) did a piece that said geopolitics, of course it’s scary. But it really has affected the global economy OK? So he went through literally 30 or 40 of them in the last, since World War II. You know America has a very strong hand. You know the best military, best universities, best businesses, large, medium and small. Widest and deepest financial markets, not just banks but you know non-banks, shadow banks, private equity, hedge funds. The world is envious of. Great work ethic, very low corruption.

You know and you look at the hand we’ve been dealt, it’s pretty good. And so yes I can come up with a million reasons why interest rates going up might derail that or but again they may not. And I actually don’t think they will.

RUHLE: You don’t think rates are going to go up?

DIMON: No, no–

RUHLE: Or you don’t think they’re going to (INAUDIBLE)–?

DIMON: I think they’re going to go up but as I travel around the country, I haven’t met one person and I mean not one who said, hey if rates go up 25 or 50 basis points I’m in trouble. And by the way, if they said I’m in trouble, I would have told them to grow up. You should have financed yourself better.

And so it’s more of a psychological thing. So the Fed when they raise it, in my opinion, normalization raising interest rates is a good thing. And it will actually reduce uncertainty. So you know I’ll let them pick the time when they do it. But the fact is I think it will be a good thing, not a bad thing.

RUHLE: Should they have done it already though?

DIMON: Look they’re the experts. I’ll leave it to them OK?

RUHLE: All right well then take us around the world. Take us to China. Give us from your perspective as you said, travel around the world see all different companies and governments, what does it really look like there?

DIMON: You know again I feel like I’m selling (INAUDIBLE), like I should be more pessimistic. And I was pretty pessimistic in ’07. China has had 20 years of 10% growth uninterrupted. Never before seen on this planet.

As they go to market reform which they’re going to have to do. And market reform is the state-owned enterprises have to have more transparency, merge, become public. They need real bond markets, real collateral markets. They’ve got to reduce corruption. These are all kind of related.

They’re going to have bumps in the road. And what happened in the summer is that they showed that they’re going to have bumps in the road. And their growth isn’t going to be 10% it might be 6-7%. Remember 6% growth on a $10 trillion plus economy is $600 billion of growth. That’s probably a lot more than it was 15 years ago when it was 10% growth. $600 billion is more than most countries on this planet.

So they have the wherewithal. There’s an article in the paper today. They have $3.5 trillion in foreign exchange reserves. Mostly what I’d say, unencumbered. They’re quite bright, they move rapidly. They have huge issues you know? But they’re dealing with their issues. And we should work with them to help them get through this. But they have huge issues.

I remind the American public, America has the greatest military defense, not just the best military, ever designed called the Atlantic and the Pacific. And we’ve got friendly neighbors in Canada and Mexico OK? And we have all the food, water and energy we’ll ever need. China is surrounded by some historical enemies. I mean Americans may not know it but China had a war you know with Russia, skirmishes with Russia, you know they got Japan, Philippines, North Korea, Pakistan, India and they don’t have enough food, water and energy. They’ve got huge issues. You know it’s going to be long time before they overtake America in any way, shape or form.

And so I just want to point out today, when I speak to the American military do you know what they often tell me? The biggest threat to American military dominance is that the economy isn’t strong. At the end of the day the economy is what pays for the technology and the dominance and I think we should focus and make sure our economy is the best in the world.

So one of the things that I do worry about, I would love, this is a hope and a dream. It’s not going to happen. But I would love to see more collaborative politics. There are solutions to every problem. Those solutions not ideology. They are practical things that work.

When I was in Detroit recently the mayor and the governor speak about the roads, the lights, housing, getting business in. Getting younger kids to open their businesses there. Getting schooling right, creating jobs for kids. That’s how we’re going to make it a better country. We’re not going to make it a better country by pointing fingers and yelling and screaming at each other.

RUHLE: Well then could that be in your future? When you talk about what would help this country, smart politics, bright politics, why not, why don’t you raise your hand and do it? Seems like there’s 78 people running for president right now.

DIMON: I’m not going to run for president OK?

RUHLE: Maybe not today.

DIMON: I think, first of all most people running for president, at least most people who’ve ever run for president in the last 30 years, they’ve been running their whole lives. So it isn’t like someone says, oh I’m a good CEO and I’m going to go be president. You’ve got to know what you’re doing. And just because you’re a good CEO does not mean that you’re going to necessarily be a good politician.

I mean I think some of the things that are good for CEOs, that CEOs, if a CEO is good that they’re getting top talent in there, having strategies, knowing how to execute and stuff like that; I’m not sure how much that translates into government. It’s important but it’s not sufficient.

RUHLE: So you wouldn’t want to go into government?


RUHLE: All right well I want to go back into China then. You’ve given us how you see the world. How are you positioned then? What are you doing in China? Are you hiring? Are you firing? What parts of your company are you focused on–?

DIMON: Right and this is an important thing. We look at every country this way, every region this way, every industry this way. The likely outcome in China in 20 years will house 20-25% of the Fortune 500 or the Fortune 1000. That’s our client set. Those clients, so to build for that, think 20 years now, don’t think next quarter. I don’t care about next quarter.

We need bankers, traders, research, technologists. We’ve got to keep up with their rules and regulations. We need legal and risk and HR and real estate. That’s what we’re going to build for. Now if we’re wrong, what I told my board is that we’re not going to jeopardize our company and that. If somehow we’re completely wrong and it doesn’t turn out that way, JPMorgan will still be fine.

And remember we bank in China, we also bank multinationals going to China. And Chinese companies going out. That’s what I’m building for. And we’re not going to stop building for that because they had a little bump in the road in the summer.

RUHLE: Do your shareholders, your board, and your clients allow you to make 20 year decisions?

DIMON: Yeah.

RUHLE: Because we are living in a short-term environment where when you talk about your clients, I wonder who’s your priority. Is it the people who bank with JPMorgan or is it your shareholders banging down your door saying return to me today?

DIMON: I think a lot of shareholders completely appreciate long-term investing. And I think some CEOs get bolloxed up when they start making promises they shouldn’t make. So if I was a CEO don’t make earnings forecast! You don’t know what’s going to happen every quarter and I don’t even care about quarterly earnings. Let me say this just outright, I don’t care about quarterly earnings.

I’ve never done anything for quarterly earnings. As a matter of fact our quarterly earnings are based upon decisions that have been made over the last 5 or 10 years. And by my predecessors. You know when you build systems and peoples and relations and technology and you enter country after country. You’re not doing that for short-term things.

You know when we open up branches, we’re going to hopefully start opening branches again in Africa, I’m not doing that because it’s going to affect our earnings in the next couple years. Even while I’m hearing. I’m doing that because that forms a base for the next generation.

And so you know, do the right thing for the right reason. Explain it to your shareholders. And most shareholders will understand that. And I speak to them all the time and they want us to do that. You know? And they want us to think long-term in how we’re building it for the future and how we’re going to win in the businesses.

RUHLE: You continue to see Africa as a good opportunity set for you going forward?

DIMON: Remember what we do OK? So we were going to open in Ghana and Kenya two years ago and then we were not able to because the regulators said we can’t. But what are we going to do there? We’re going to bank multinationals going in. We’re going to bank their biggest institutions. That’s what we do there. We’re not doing retail; we’re not doing stuff like that. So I would say it’s rather low risk.

And we’re often asked by our corporate clients why aren’t you there? If you’re there you could consolidate cash for us. You could do FX for us. You could do a bunch of things. That’s why we’re going. We’re going there to serve the clients who already want us to be there.

And the governments, we’re already, we’re a carpetbagger in Ghana. We financed their power plants and some of their other large scale projects there. And we want to continue to do that. We want to help that country grow.

RUHLE: All right then take us to Europe. How do things really look there? Because in terms of investing, you know, come June people said, oh Greece is going to be OK. We’re fine. Well we’re fine if you’re a bond holder and your bonds aren’t going to zero. But really what does it look like there?

DIMON: You know look, I think Europe, let me just first state, I support the Eurozone concept OK? I think their politicians have done quite a good job over the literally 50 years getting it done. Europe is a great example of, that continent had not just World War I and World War II but the 100 Years War, the War of the Roses, the Napoleonic Wars, the Franco-Prussian Wars.

I think it’s great for people to sit back and say can we live in peace? That’s been a good thing. And also they said can we have a common market. They looked at the United States and said that huge home market is a huge benefit for Americans and American companies et cetera. It creates huge economies of scale which benefit the people in the country.

Those two things still exist. The other, the very difficult stage, the monetary union is very difficult. The politics of getting 17 or 27 nations to agree to something, but they’re going to have to muddle through. I do think that because of the complexity of that and some of the structural rigidities, they’ll have lower growth. And hopefully it’s growth.

RUHLE: Is Europe–

DIMON: Although as an investor that doesn’t mean you won’t have great investment opportunities. I mean I always separate that because sometimes that depresses all the stocks. But a lot of their stocks over there do 60% of their business outside of Europe. Don’t confuse the two.

RUHLE: All right well that’s as an investor. How about a lender? Given the regulatory environment that those European banks face, I mean they’re in an even tougher spot than you. Are you just going to be able to eat their lunch going forward?

I mean if you’re Deutsche, if you’re UBS, if you’re Credit Suisse, they can’t compete with you right now.

DIMON: See you say that but we see them every time we do something. So they’re still competing with us, they’re still winning business from us. We’ve gained a little bit of share particularly in the debt capital markets and equity capital markets and M&A.

Hopefully we’ll gain share because we’re good serving our clients. But I don’t think they’re all going to disappear. I think they’re trying to modify how they run their business for the new rules and regulations. But they’re not surrendering. So I see a lot more statements that they’re getting out of something than we’ve actually seen in the marketplace.

RUHLE: Well another way that you’re actually serving some of those European banks, JPMorgan has become an extraordinary incubator for top talent. Jeff Irwin just left JPMorgan in the last year, moving up. You’ve got Jeff Staley, you’ve got Bill Winters. What does this mean that you’re seeing some of the most senior people in your organization now go and they can share some of that JPMorgan magic at other institutions? Is that a risk?

DIMON: No. I mean a long time ago I was told by a gentleman that ran McKinsey that if you’re a good company you’re going to lose people. And that’s one of the negatives. I wish them all the best. I think we have the best management team I’ve ever seen. And I wish Jess and Bill and Jeff all the best too. But they’re going to have to compete with us. But I do wish them the best.

RUHLE: But if I’m JPMorgan’s board do I say Jamie’s the top dog he’s happy as a clam in his seat. He’s gone through a tough year and still said I’m not going anywhere. How are you going to keep that great bench with you sitting on top with no plans to move?

DIMON: So I think a very important thing, it’s not about me. It’s about the company. So the board thinks about that all the time and stuff like that. I think we have enormous talent. I do worry very much that they will be recruited by everybody else. And my job and the board’s job is to retain them. And I’m very close to a lot of them. They’re great at what they do. They’re great partners. So hopefully I won’t lose any of them. JPMorgan is a very strong company and we have a very strong bench.

RUHLE: Thank you so much. Great conversation.

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