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Jamie Dimon’s Wide Ranging Interview With FBN [TRANSCRIPT]

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JPMorgan Chase Chairman & CEO Jamie Dimon spoke with FOX Business Network’s (FBN) Maria Bartiromo about the United States economy, cyber security and his battle with throat cancer. Dimon said, “America looks pretty damn good.”  Jamie Dimon commented on raising rates saying, “rates going up would be OK if the fundamental economy is growing” and “the more that employment is growing and companies are growing, you know, rates going up would be OK.  It’ll be volatile, it’ll be a little scary, but it’ll be OK.” Dimon went on to talk about cyber security for the bank saying, “We spent $250 million a year, that number is going up; could double the next two years easily. It’s a big deal. But we’re safe.” When asked whether cyber security is something he will continue to invest in, Jamie Dimon said, “This is a permanent battle” and “Eventually it will be taken much more seriously by governments.” Jamie Dimon spoke about his throat cancer saying, “I’m actually doing fine” and “I never stopped working, but I’m mostly back to full health, back to working full time.“

Jamie Dimon on how many times a day people try to hack the system:

“Let me first say that our clients are completely safe. We move six to ten trillion dollars a day. Your deposit’s safe, the movement’s safe. We’re actually very good at this. We did announce a breach that we had. We made it voluntarily because all the information was public. Name, address, email. But it was a breach. We thought we should tell our shareholders. We spent $250 million a year, that number is going up; could double the next two years easily. It’s a big deal. But we’re safe. And I think what people have to do is have perimeter controls, internal controls like you know, these change of passcodes. If someone gets your passcode, they get inside your systems, your protection is track that. So you can make sure if that happened, you’re on top of it, too.”

Jamie Dimon on how many cyber-attacks they face each day:

“Oh 300 – would be 300,000 or something. It’s a huge number. And they’re mostly – they mostly don’t get through. If the banks are good at this, the feds can be good at it. In fact, a former director of national security was on TV and said people at JPMorgan are like the best at it. So – I’m not saying we are, but he said something like that. And if you look at the real breaches, where they get your social security, your mother’s maiden name, your security code, your credit card number – those haven’t been the banks. Those have been other people. And so we pay the price for that. And it’s incumbent upon all of us – merchants, banks, retailers, everyone – to come up with a better systems. And we are. We have a whole new generation of security things coming out called tokenization and chip – the chip that make it much harder for criminals. And then there’s other companies set of standards. They’ll protect their own credit card numbers, etc.”

Jamie Dimon on their investment in cyber security:

“This is a permanent battle that will be – people will lose battles, and you’ve also got to be prepared for that. Like what are you going to do if something goes wrong where you can continue to serve your client, continue to do the things, protect yourself from damage. And protect your client from damage. So this is a big deal. It’s not going to go away in our lifetime. And it’s also an example, by the way, where government – I think government and business are collaborating pretty well. We need to do more. You know, a lot of our collaborations is not real time. We need real time. You know, the government or other banks can see – there could be attack right now on these wires with this kind of malware, and we could put immediate protection against that. So we’ve even informed banks of other things we’re having, help them. We tell the government; they can disseminate it. The government knew about it – mostly, we knew about it first. The government may know about it. They see stuff coming. So we need real collaboration. And eventually cyber security is going to be a part of WTO, World Trade, and – and public policy and global relations. This can’t go on. I mean, you can’t have it where people are stealing IPs, stealing money, attacking you, and if it’s state-sanctioned allow it. It won’t. Eventually it will be taken much more seriously by governments.”

Jamie Dimon on his battle with throat cancer:

“I’m actually doing fine.  I’m happy to be — I never stopped working, but I’m mostly back to full health, back to working full time.  I had throat cancer, for those who don’t know.  It’s a tough thing to go through, and I did exactly what my — I have exceptional doctors.  I did exactly what they told me to do.  But on December 4th, I got a — after all this treatment, radiation, chemo, I got that kind of clean bill of health, no evidence of cancer in my body.  It’s a very good sign. Obviously, I’m going to be monitored for the next three years, but it’s not definitive, but it’s as good as can be, so…And my family was enormously supportive of this.  I got hundreds of thousands of emails and calls, and the people at the company were great, the board was great, and I don’t wish it on anybody, but I’m glad it’s over.”

Jamie Dimon on whether the cancer has changed him:

“No, not really.  Because I’ve always — people always ask me what your value system is and I always put “family” first and “country/humanity” second, and kind of JPMorgan kind of down here: not unimportant. You know, I spend a lot of time with my family.  I adore all of them, three children and my wife and you know, I don’t know if I could do more.  They have their jobs, they’ve got their careers, they’re all busy and doing things like that…If I do a good job here, I can help people with their careers.  We help, you know, consumers and big businesses.  We help countries and banks, central banks, governments, sovereign wealth funds, and we’re hugely charitable.  You know, the work we do in Detroit, we’ve hired 8,000 veterans.  So this is my contribution.  It’s the best I can do.  And so it hasn’t really changed that.  And I like working.”

Jamie Dimon on how he characterizes the United States economy;

“Yeah.  So, the U.S., if you looked all — most of the forward looking things, household formation, 10 million more people working since the depths of the great recession, businesses are actually doing still low amount of capital expenditures, but it’s growing, consumer confidence is up.  Business confidence is up.  Small business credit is kind of back to where it was.  You haven’t seen small business formation get healthy yet, but I think it actually might.  Housing, you know, turned the corner way back.  Housing is not in short supply, but it’s at least balanced if not a little bit short supply in some markets. Innovation is alive and well.  And you see it at conferences like this. And so I — America looks pretty damn good.  The biggest negative when you talk about America is twofold.  One is overseas, which we’ll talk about.  Second is what are the potential expense of Q.E. three not being — kind of being not unwound but stopped.  And if they start to raise rates. And my view there is that normalization is a good thing.  Rates going up would be OK if the fundamental economy is growing.  Just think of employment.  The more that employment is growing and companies are growing, you know, rates going up would be OK.  It’ll be volatile, it’ll be a little scary, but it’ll be OK.”

Jamie Dimon on why the JPMorgan health care conference is so important:

“You know, the amazing thing about this conference is it started 33 years ago…I think there’s some like 30 companies, the market cap combined was $2 billion. Today the market cap, combined of all the companies here, $4.6 trillion. Unbelievable. And it’s the sector is unbelievable.  But the amazing thing to me is – you know, I’ve been coming here for the better part of 10 years now. But even in ’08, ’09, 2010, the bad years, this thing was growing over time. You had entrepreneurs, venture capitalists, big companies, small companies, global companies. And it always reminded me of the raw, utter strength of American business. And it’s gone global. These are a lot of global companies here.  But the entrepreneurialism, we’re going to grow, we’re going to expand, we’re going to bet you save, we’re going to save lives. And they save lives, including mine, and they grow and they expand. It’s very uplifting. You must feel when you hear this. You’re talking about the specific technologies that may – they have a whole new whole amount of lives and save lives of people in poor countries. It’s just a fascinating thing. This is capitalism at its best, right here.”

Jamie Dimon on M&A market activity:

“So M&A, 2014 was the second-best year ever. I think the best year, you have to go all the way back like ’06 or something like that. And it was the best year ever in health care. So if you ask our bankers and they’re closer to it than me, they would tell you that this year has a good chance of being better than last year in health care. And M&A in general, I don’t know. A lot of things drive that. And I think it would probably  be pretty good. A lot of companies – you don’t normally see companies ever. Like if I – I meet with CEOs around the world. But particular in the United States where people say I’m going to shrink next year. I don’t have any ambition. I’m not going to invest R&D. I’m not going to open a branch. No, they’re looking for ways to grow, expand, do more. They’re going to make mistakes in the process, and M&A is one of those ways. So normally you look at M&A, you can look at all these criteria that drive it. You know, interest rates, stock prices. But it also is business confidence, people looking for synergies, all the things that people look at. So I think M&A can be pretty healthy as America gets healthier.”

Jamie Dimon on whether he thinks the GOP taking control of the Senate will change the tone in Washington:

“I don’t know. I mean, there’s a lot of hostility toward banks still that comes out of the population, not just – and even some Republicans. And I just – what I always hope for is kind of collaboration, think it through, working together to come up with a better outcome. And you know, not all people believe that some people think  the bank system should be beaten up because they caused all these problems. You know, JPMorgan didn’t. And you know, I can’t get that message out there when TARP came out and said that every bank was bailed out, which is just not true. That was like the scarlet letter for every bank and forever. And so we had to just manage through that. We’re not going to let it change that narrative.”

Jamie Dimon on whether he has been talking to lawmakers to explain what he’d like to see in terms of priorities:

“So America is in great shape, and I’ve mentioned before – I’ve mentioned the positives. We always have the best military…capital market, best universities, low corruption, unbelievable innovation, great work ethic. But long-term – OK, the country always has to face issues that may affect that long-term competitiveness. And I’m going to mention five. And by the way, when I go to Washington, all five are mentioned. Yes, I’ve spoken to the White House about it, and everyone will put these five in the category. Corporate taxes. Tax reform in general. Simplify it, broaden out the base, reduce it, become more competitive globally Immigration reform. Most Democrats and Republicans I know support immigration reform. They may differ on pieces of it. Education. So think of it – think of secondary education the most, where we’re filling a lot of kids in inner-city schools. And you know, the president mentioned community education. We think it’s critical that community schools, tie up and local businesses so those degrees mean something that people get jobs. And if you can make it free, the more people you can make it free for, if it’s effective. I think to be effective, I think it might have to be done locally, not just nationally. Infrastructure. I mean, most people agree that we don’t do good infrastructure planning. So for roads, bridges, tunnels, schools, hospitals. We need to do that at the city, state, and federal government level. And one more that’s escaping me – oh, trade. We’ve got to get – and again, most people want thoughtful trade policy, Democrats, Republicans. This transatlantic and transpacific trade agreements would be a great boon to the American economy and the global economy. And yes, some people are scared. On both ends of these political sides it might hurt a constituency or a business. But in total, people think increased growth by 0.4 percent or something. So, if we get those five things done – I’m not hopeful they’ll all get done in the next year or two, but they would be critical for the long term health of America.”

Jamie Dimon on where his resiliency comes from:

“Let me correct you a little bit. I’m not done with the throat cancer. Regulators – in fact, some people say I didn’t do a pretty good job there. I don’t know. Look, I love my company and I love what I do and I love my family. And I – and I love this country. I mean, look at America. I mean, my grandparents emigrated here –From Greece. You know, and like most, they started with cleaning dishes and doing things like that. And so, I think those things we should recognize over and over and over. Educate our kids about it, and make sure that they understand the strength of this country and do all the things to maintain how strong it is. So, I’m devoted to doing that, whatever it takes.”

Jamie Dimon on whether 2015 will be any different regarding the proposals from the Federal Reserve that puts him at the high end of holding capital:

“Not really, no.  We’re going to do exactly the same thing.  We still can earn good returns and — remember the rules aren’t final.  They’re proposed.  And there are — you know, there are things in there that might make it worse or better, so we — we have to — remains to be seen. Remember also the G-SIFI capital, there are other constraints: liquidity constraints, CCAR constraints, capital constraints.  All banks operate under one constraint or another.  So it isn’t quite clear that some banks aren’t going to have to run with higher capital than their Basel constraints because of stress testing. And I do think stress testing is a absolutely critical and important thing to do.”


On Goldman Sachs saying JPMorgan should be broken up to create better shareholder value:

“No. You know, first of all, he didn’t say that.  What he said is there might be some logic, I don’t know all the facts and stuff like that, and based upon those — some of the parts of analysis using current fees, maybe the value would be five to 20 percent higher.  Well, current fees, you would never make a decision, a major business decision, based upon things that you and I both know are temporary.  You’ve got to actually look forward five to 10 years and say it’s the values in total, both where you can build and the potential fee is something worse, he doesn’t know the synergies.”


On the global economy:

“So China, I would separate in pieces, which is how they’re going to affect the global economy in a couple years.  And I think not much, because I believe they’re going to meet their objectives of seven percent, plus or minus growth, because they have the wherewithal to do it, they can still macro manage the economy.   They’re quite bright, they know what their problems are.  They’re looking to meet that. They have $4 trillion if they want to do infrastructure investing et cetera.  That does not that if people make a list of issues they have, corruption, they need more market reform, environment, those all — and NPLs, you know, maybe the banks aren’t in the best possible shape.  Those are all true.  But I think they can overcome that in a couple years in terms of how it affects the global economy. Those other things, if you’re a long term investor, so if you’re making huge capital investments that are going to be there for 20 years, they’re going to have bumps in the road.  It is not possible in my opinion to grow, you know, it’s 10 percent a year for the next 20 years, and you know, they transit to a broader democracy of some sort, the Chinese sort, market reform, they — they — it’s unavoidable. And you’ve never seen a country going through that transition without having some disruption.”

On the Japanese markets:

“Yes. So Japan – Japan has been an enigma for most of us for the better part of 20 years. They’ve had pretty serious monetary policy, strong and pretty – strong fiscal policy. They spend a lot of money; their debt is the highest of most developed nations. That’s the GDP. But it’s all domestic. So it isn’t like they’re going to default to a foreign country or a foreign creditor. But I – I actually think Prime Minster Abe, he’s being pretty strong. It gives me some optimism. They’ve got monetary policy, fiscal policy. I would keep a close eye on the third one, which they called the third arrow. And think of it as corporate governance. You know, they have some great companies, but they don’t necessarily perform really well. So you need to have the ability to have boards to make more demands on companies to be more ambitious. They’re starting to grow more overseas. They have some unbelievable technology. You know, a labor force – more women in the labor force. They have new policies to maybe make some cultural change. They’re not going to have – they don’t allow immigration. But they do allow – what do they call – migrant workers, temporary workers. You know, policies allow that when they need it. They have – their demographics are terrible. So America – we’re growing. We’re growing in the number of people. That means more babies, more cars, more houses. But they’re shrinking. And you know, we’ve not seen a developed nation go through this. They may be the first to get to watch it. But Abe is trying to deal with it in an aggressive way. You know, far more aggressive than former political parties there in prior years. So while they had no growth and maybe in another recession, it gives me more optimism.”

On the impact of oil prices declining:

“Yeah, so I’m not really worried about JPMorgan, because we’re — you know, maybe the credit will be a worse for oil and some of the real estate, tell people to really — the areas that depend on oil will have real estate issues, too.  But we’re very diversified.   That’s — almost to the normal cycles, I think for the most part, America’s benefit.  And it is very progressive.  So, the average American, I think remembers, you know, we have $800 million more to spend in their pocket.  That helps, you know, lower income folks more than higher income folks.  And they’re going to spend it. And you see retail sales, car sales, you know, home sales, they’re all doing a little better.  Home improvement sales are doing better.  So, I think it’s actually good.  There’ll be negatives for capital expenditures in the oil business and obviously people who supply oil.  But you know, there’ll be positives.  The consumers can do better and the people who serve the consumer are going to have to open more branches and you know, have more inventory and do those kind of things.”

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