JPMorgan CEO Jamie Dimon on Markets, Economy, Returning to Office

it's been almost a year since you suffered a pretty major health scare so i just want to begin by asking how are you yeah i'm doing great actually i'm exercising again i've got most my health back and been coming to office since june pretty much so uh happy to be back at work let's talk about competition you recently told your bankers they should be scared expletive uh about the threat posed by financial technology companies and others coming into the industry isn't that a bit defeatist a little bit but i didn't mean it quite that way so many years ago we sent an airplane full of people to china to call the competition so jpmor itself is doing great so all of our people look at we're doing quite fine but you have fintech big tech you saw walmart recently so we just have to be prepared for intensified competition we're ready for it we're very competitive and we expect to win but prepared how what does that mean do you have to go and buy something can you build it organically do you invert the walmart model and just start opening delicatessen's to compete toe to toe no so we already have 5 000 branches we're opening all we're going to open another 400 next couple years in all 48 states and of course those branches do a lot they take deposits they do wealth management they do small business lending they are really important to private banks commercial banking clients et cetera so no we've got the people the capability we can do 100 organic however we're open-minded if people have ideas for us but acquisitions or partnerships we're completely open to have those conversations too but the growth of some of these fintech companies you know if i look at adian or stripe for example it's been so exponential and then i look at what some of your competitors have done morgan stanley notably with the e-trade deal do you not think there would be a case we made that jpmorgan should go out and just buy one of these giant fintech companies plug it in and then you're good to go yeah so you should assume you look at everything and like i said we some of the things we do ourselves we've done quite well in these areas too but you're absolutely correct some of these people have done a great job and sometimes by it's not cheaper it's not even better it's usually just ease of use or something like that but i look i assume they're coming i've dealt with competition my whole life and we're open-minded acquisitions we're open-minded building ourselves but we tell the people here in this very room in fact is you we should do what we need to do to win in technology people systems marketing analytics ai and obviously we're doing an awful lot of ai and cloud work and things like that another thing fintech has done or at least is partly responsible for is this sort of democratization of investing obviously the rise of the retail trader the reddit crowd roaring kitty whatever you want to call it is creating this narrative at the moment of david v goliath now as a very prominent goliath do the davids have a point is the system rigged god stacked again at least in every bull market that has happened in my life so that this is not a new phenomenon and i do believe that people should learn how to invest their money but they should do the homework i mean thinking you go on and just gamble and play that's that doesn't have a long-term success record and so but to the extent that people are learning and they're getting involved that's a good thing so for some it's going to end badly and for some will primed up well but the best investors learn over a long period of time how to be a good investor just like the best tennis players the best boxers the best media folks the notion that you can be great at it because you i remember my daughter made her first investment it went up and i think to myself oh god it was far better had it gone down you learn you learn a little bit more that way sometimes well one bit of the industry that obviously has been savage to some extent recently is it's the short selling hedge funds do you think that industry is in crisis because of this effect we're seeing or this phenomena of the the retail trader absolutely not i the the retail trade in dollars is a teeny well you're talking about the teeny ween a little bit of market the market is global i mean something like 10 trillion dollars is bought and sold every single day and when we say investors you're talking about retail investors pension plans hedge funds money managers individuals i've been buying selling stocks i've been 12 or 13. so i believe in that but my dad taught me how to read a balance sheet when i was 13. it wasn't just you know maybe i was guessing a little bit but uh but i look it opens it up but no there there are legitimate complaints about short selling more around transparency and the duplication of vote of the ability to short sell the stock there are legitimate issues around all these things that you know if the regulator's going to be looking at payment forward to flow high frequency trading disclosure about ownership voting short selling those are good things and you know to me should people be able to pay for the flow i think payment for the flow is a very complex subject i think there should be much maybe but if you much strict rules about what you mean by that it's not clear to me that everyone does the same payment for the flow so if if i if i'm paying a lot more to someone else or keep a lot more for myself you probably have the right to know and there's certain disclosures they're not very good moving on to the i guess the biggest question in finance right now which is is the stimulus enough is it too much even the interventionist can't seem to agree on this point you have larry summers on the one side saying enough already you have janet yellen j powell and others on the other saying more is needed what do you think so getting through covet is absolutely critical and we're still in it though god knows it looks like there's light at the end of the tunnel you know by the beginning of the summer or something like that but and it's not a binary subject i think you know democrats republicans are like ships passing the night there are legitimate complaints about stuff in this bill has nothing to do with covert there are a lot of people suffering you need help both are true so if you want to go through you go through all the detail unemployed they definitely need help small businesses they definitely need help people at the lower end they definitely help women who had to go home who basically stopped working because they had to go take care of something like that they definitely need help you know does every i don't know if you know this but like half the states revenues went up they didn't go down do they need help you know and we're just throwing money at people at one point so and there will be another side to that mountain so they should be cautious about overdoing it get us through the prom get the country going but you know don't try not to overdo it too much but isn't the risk exactly that if you have places and states people that don't need help and getting the help you overflow the system you do create this huge risk of inflation yeah and the system already has a little bit of that so if you look at what's in the system it looks to us like there's a trillion dollars a trillion that's unspent that's before this billion nine trillion nine so there will be money like you know there's a very good chance you're gonna have a gang buster economy for the rest of this year and you know easily into 2022 and the question is does that overheat everything and we just don't know yet but i would put that on the things to worry about you know i wouldn't worry too much about it i would worry more about covet and nuclear war than i'd worry about that but you know i would i would suspect there's a pretty good chance you're gonna see raise going up and you know people starting to worry about that at one point let's talk about covert for a second i've been very clear i would not buy 10-year treasuries just so you know um on on covert we are obviously doing this interview in person which is fantastic we're doing it in your offices here in new york but still largely empty as of my officers as probably or a lot of people's offices how important is it to a business like jpmorgan to actually have people physically coming back to work it's very important i mean i look i do think to be part of the world where a certain amount of people work from home permanently certain sales certain ops you can track the productivity et cetera i think there'll be a large portion who permanently work in the office think of our branches cash management probably most the trading floors et cetera and there'll be some hybrids where you spend two days two weeks at home and two weeks in the office of three weeks home a week in the office or three days and two days and two days three days but so i think it will reduce the need for commercial real estate but there are huge weaknesses to the zoom world i mean most of us learned by an apprenticeship system by you know seeing mistakes going to trips how do you handle a client how do you handle the problem so it's hard to inculcate culture and character and all those things when you have the zoom world spontaneous combustion it goes away hard to manage you know it's hard to be very critical you've got 15 people on the screen so what before was like a a deep dive question now looks a little bit rude and i took a trip to california and met a hundred people all outside all wonderful breakfast lunch and dinner it's amazing how much you learn about your own business your own bankers your own clients your own products and you know i met with snowflake and marketa what you learned about technology and systems you're not going to do that in the zoom world and you know so bankers you know relationships i think it's very hard to build and develop and deepen a relationship on the zoom world so you still you know there'll be more zooming people like me will travel just as much as i did in the past as and when the vaccine does become available for your workforce will you make it mandatory for people to take it if they do want to return it's hard to make it mandatory and their laws about that but i think what we'd like to do is kind of have carrots and sticks we want people to take it i think it's a far better thing you certainly can't make it mandatory before it's fully accessible so that question can't even be answered until june but but i do think you may see some companies do it i mean i can see an airline doing it or a hotel company doing it i can see some people saying if the folks in our branches aren't vaccinated they're not going in so there will be pressure and i would say carrots and sticks not mandatory another topic very of the now is specs i'm interested why when i look at the league table does jp morgan not seem to be doing especially well in the spec game yeah we were daily in a dollar short probably a little skeptical going in uh obviously are you still skeptical i i think you have to be cautious okay so i think if it's a good sponsor if it's a fair sponsor deal if it's got good pipe investors if you really do due diligence the acquisition you know these things can make sense but clearly there's a lot of hype uh there are a lot of sponsors that you shouldn't be doing business with and so some of them will not end well it doesn't mean you shouldn't do them and it doesn't mean there are some good ones but you know toss we want to hold to jp morgan standards the people we actually do do business with just turning to my home country for a moment look i know you've been hesitant in the past to open on uk sovereign issues but as a bret i can tell you there are scores of us thousands of us who would love to hear your opinion on london particularly what is the future for london as a financial center now that we have gone through brexit and this sort of much harder version of brexit than many people expected on brexit and i always got notes from from brits saying go home yankee keep keep your opinions to yourself brad look i was in not in favor of hard brexit we had a hard brexit it's going to cause difficulty to seeing them it's going to reduce their gdp all things being equal you know look i've always understood why you want to free yourself from you know what people considered a sclerotic europe but it may not play out that way so they you know if i was a brit i'd be really careful how you're going to compete in the new world you have to deal with europe you're going to have to deal with all these other trading parts et cetera in terms of financial services there was no deal done so you you really don't know and that would argue an equivalency or not i think my view is what you're going to see is over time parts we're done in london will be done elsewhere so london will always be a financial center it won't be the financial center of europe you're going to get other financial centers like paris and frankfurt dublin maybe amsterdam and you've seen it already in certain products that doesn't mean it won't extend to other products like you know if equity trading why not affect trading why not bond train why not and i do think there'll be political and regulatory pressure in the next 10 years to move some of those things so it and we want to leave it just the way it is we love london we love britain it's very efficient for us and it's very efficient for our clients it's much cheaper etc to leave it the way it is but that that's got to be settled between europe and britain and so far it doesn't look particularly good much easier question for you we're obviously sat here in new york your home city there's a lot going on in new york right now there has been an exodus in the financial services industry a lot of very smart people big companies moving elsewhere what keeps a business like jp morgan in new york yeah so again i think new york could have a little bit of a difficult time too because you know already real estate needs will come down most of us are going to go to more open seating because you don't need 100 seats for an employee you're going to need like 60 and then of course if you have higher individual taxes and higher corporate taxes that does a pretty good job driving people out as does crime inhospitable business environment so you know what the city has to do is make itself what it has been for just like london a wonderful absolute place to work and or visit so that's the arts it's the sciences it's the parks it's the safety it's the soundness it's the tax system it's the and for you know for london it's the rule of law it's the all the things that surround the defense's system there it's the lawyers and the accountants and the tech people and and they're all they're all kind of important so we need to do that here you're going to have some exitus anyway because you know some of the bad stuff has been happening too much and you've seen a bunch of people already kind of vote with their feet and leave the city so um but new york can fight back it's just got to have a real strategy you know before we go just a quick jamie diamond question you know you're going to be 65 i think next week you've been in a job since 2005. obviously the i think the only banksy over major bank to have gone through the 08 crisis still be navigating through the covert crisis it's not up to you obviously you have a board and shareholders but if it were how much longer would you want to do this job for five years that's what it is oh that was going to be the only answer i've ever given so uh but it will be up to the board we've got great people here and they did a great job running this company i was unable to so which i think proves we've got people in place who can do these things and so how many how many people have your direct report group could actually step up and do the ceo job i think the ones i'm going to mention are you know gordon smith and daniel pinto there are others but those two co-presidents co-chief operating officers they did it when i wasn't here they've done an outstanding job and obviously we have tons of you know exceptional people

Channel: Bloomberg Markets and Finance

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Length: 13min 42sec (822 seconds)

Published: Mon Mar 01 2021