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- [00:00]
Indiana University Narrator
Indiana University strengthens tomorrow's workforce with practical real world experience. IU grads make a difference in your community, serving as teachers, nurses and engineers who rise to tomorrow's challenges and meet them. Learn more at iu. Edu Impact
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Bloomberg Host
Bloomberg Audio Studios Podcasts Radio News I could not be more happy to be here in Paris with Jamie Dimon, of course at JP Morgan Global Markets Conference. M for diamond thank you for having us. Thank you for being our host here in Paris. I mean there's a lot riding look, the markets are optimistic. They're optimistic that there's some kind of resolution in the Middle East. Are they overlooking the worries about inflation?
- [00:45]
Jamie Dimon
So welcome. Happy to be here. I think there's a little bit too much exuberance out there. It's not just the Middle east, it's you know, Ukraine, Russia, still there, America, China. There are a lot of these complex issues which may or may not affect the market. But then there are issues like inflation. You know that today's print was so good. So yeah, I think the market's kind of exuberant and it may not be completely justified.
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Bloomberg Host
So why are they so exuberant? If they're exuberant, are you expecting a correction and is it because they're looking at. I don't think it's.
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Jamie Dimon
I think corporate profit is doing very well. I will be a plus this year. It's just a lot more spending which may be a little inflationary too but it's more important profits. You know we were doing a bit more QE government still spend a lot of money. The one big beautiful bill is kicking in stimulus offsetting a lot of the. The gas. I think the gas increase a dollar gas is $100 million the big one big bills through billion that consumers pay the one big group build 300 billion deregulation is real. There are these things which are causing a pretty good market right now.
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Bloomberg Host
But when you talk about exuberance it means that there's a market dislocation. Where do you see that the stock
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Jamie Dimon
markets in the top 10, 15% credit spreads are very low. The general assumption that things that these things are all going to resolve and I'm just kind of a skeptic. I don't know. I hope they do, but I don't know that they will get.
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Bloomberg Host
What do chief executives worry about in private that they tell you that they
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Jamie Dimon
won't tell us not much trade, America, NATO, the wars, oil prices. I mean the same stuff you hear about all the time.
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Bloomberg Host
But Capex I know you know we had A great earnings season. Is the next one going to be less good?
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Jamie Dimon
I don't know yet. It's very hard to tell. You know, I think the deficit spending drives a lot of, drives a lot of corporate earnings too, so. And drives a lot of CapEx. And you know, will CapEx create productivity before it creates inflation? I don't know that. I think one of the risks is inflation. I've always thought that. And so.
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Bloomberg Host
But also, how do you think of oil and how do you think about what's happening in the Middle East? If this lasts three weeks, four weeks, even like two months, are we going to be in trouble?
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Jamie Dimon
It's a big deal. And every day it gets a little bit worse. I don't know how it's resolved. I hope it gets resolved in the interest of the United States and against the Iranian regime, not the Iranian people, but I don't know. But I read something, it was very interesting that China reduced their demand by 5 billion, but by 5 million barrels a day. America increases exports by 3 million barrels a day. That 8 million is meant for a lot of what was lost and which is maybe why it hasn't been as severe as people think. On the other hand, inventories are coming down, you know, gas wells may be closed and stuff like that. So it just gets a little more serious every day. That day that becomes a disaster has been pushed out quite further than we thought at the beginning.
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Bloomberg Host
Do you worry about the US Consumer? Are you see, are you seeing signs of stress anywhere?
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Jamie Dimon
I think the upper end, the top 50%, lots of money, jobs, wages going up, home price going up, stock price going up, they're spending like they should, you know, like they're buying, they're traveling. The bottom 30% is, I'm going to say it's struggling a little bit. It's not a massive downturn and of course we like to help them, but their wages have not gone up. But more important that they still have jobs and they don't have too much debt, they still have jobs. And that, you know, at the end of the day, what's going to drive consumer spending, consumer sentiment, that part, corporate profits will be jobs.
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Bloomberg Host
What do you worry about? Know there's also the President's meeting with President Xi tomorrow in Beijing. I mean, does that have implications for the trajectory of America?
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Jamie Dimon
Look, I, I don't know, but I would suspect they'll come up with some. That'll be a friendly meeting with some positives from both sides. I don't think China is going to give in to any Major demands. I don't think we're to make major demands. You know, we both have a lot of common interest, you know, anti terrorism, anti nuclear proliferation. You know, China is feeling its oats, you know, to deal with President Trump. So we'll see how it turns out.
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Bloomberg Host
You had an amazing trading. Actually results. Trading was amazing in the last quarter. How's it going now?
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Jamie Dimon
Well, I can't comment on that but I mean from the last time Troy spoke publicly it was fine so far. But I can't give you other information that.
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Bloomberg Host
So give me a sense.
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Jamie Dimon
When you guys can see every day volumes are high. Yeah. And when volumes are high, all things being equal, it will be good for trading.
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Bloomberg Host
But, but you're part of it. I mean it's, it's you. It's going okay because it depends on the kind of training that you will benefit.
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Jamie Dimon
Very good.
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Bloomberg Host
Talk to me about. I. So I don't know whether you've also played around with my thoughts. What did you see?
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Jamie Dimon
So I. Big picture. AI is going to cure cancers and reduce work weeks and kids live longer and planes will be safer, cars will be safer and less people die and you have new drugs. It's going to be good. And you know, but there. And we've been using now for 13 years. It does an amazing job in various different things. So we're going to deploy it to help our customers. There are two attributes that people worry about. What is my thoughts? It's legitimate that this, this is so powerful and covers a lot of vulnerabilities and we're all trying to figure out how to deal with it, not just for ourselves but all of our friends, big banks, small banks, you know, telecom, the government's on top of it. A lot of the work done by enterprise, they don't have the ability to do a lot of that. So I think, you know, Scott Bess is running it for banks and I assume they've done it for other people elsewhere. So we're all getting our hands. It is risky everyone and we actually publish a viewers to look at this like a list of what you can do now. Don't wait to get Mike those because everyone's going to get it at one point. But you can't give it everyone if they can't handle it or it gets leaked out. It could be used by bad guys before we protected open source code and all our code and so we need a little work to do to get it done right. And the other one is this job disruption where I just. That may be true. We should get prepared for it. We should be breathless, you know. And that to me is how do you create skills and reskilling. There will be a lot of jobs and AI, cyber, advanced manufacturing, the trades and that we should make sure locally and this might be between government and business kind of collaboration that we are prepared. It would have too much stop talking about it. Have a plan.
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Bloomberg Host
But my thoughts, what does it change the way that banks have to defend themselves? Are you thinking about cybersecurity differently?
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Jamie Dimon
No sidewalk. The banks have always been on top of the top of the heat in terms of cybersecurity. I wrote about my chairman's letter. Cyber is our biggest risk. Risk made worse by AI. And that was before Mythos. So this, yeah, this does make it more dangerous. That's why banks are really working this thing right now. All of us not together, we're collaborating. We're not like arguing with each other.
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Bloomberg Host
What does that mean? What does that actually look like concretely in five, six months.
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Jamie Dimon
Yeah, all going through our own applications with my those patching them up. All going through open source code. A lot of flaws in open source code. We don't need to all fix the same open source code. If you fix one, I can fix the other. Collaboration trying to figure out how to form utilities to help third parties. Going to our critical vendors, you know, including hooked into exchanges around the world, making sure they're doing it properly. And there are other things like how do you know a patch used to be posted publicly? The old patch that fix that patch now you have to be able to fix the patch in hours. And some you can't make public. When you make it public, the bad guys will get it, reverse engineer and get through. So we're doing all that stuff. It's serious work. I think hundreds of people doing it full time.
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Bloomberg Host
Now look, hyperscalers and also funding of hyperscalers is really propping up the economy. Do you have any worries about getting that money back or you know, some of the funding of what's being constructed?
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Jamie Dimon
The way I look at is that AI is real. A lot of money is going to go into it. That doesn't mean everyone who does it is to be a winner. Like go back to the Internet. A lot of people lost, a lot of people won. And so, you know, in the hyperscales with those data centers not find use, they probably will. But is it possible some do it badly, design it badly, didn't get the right. Yes, of course it's possible. Yeah.
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Bloomberg Host
It does change the way you recruit the Way you hire and the way
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Jamie Dimon
you work, I think it's going to change almost everything. And I, I've done my own stuff in getting reports in the morning. I have a Jamie Strategic intelligence report is getting better. So I could say, what did Francine say yesterday? And every morning 5am I'll tell me what you had on your people that might be significant to me and then you can keep on educating it. That's not important. This is important what's significant. So yeah, we're all going to use it different ways, but we will use it. It won't change my, my day to day. It will inside the company because we're deploying it in a thousand different use cases today.
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Bloomberg Host
You're much better off just watching Bloomberg. Talk to me about the uk. So there's a lot of, you know, the markets are on tenterhooks to know whether the Prime Minister survives. We don't exactly know what comes next. The markets are nervous. What does it mean for JP Morgan in London?
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Jamie Dimon
Well, look, we've had ups and downs in markets and up and down politicians. It's not going to change our fundamental strategy. I would say that Europe, including the know what to do as the Draghi report, there are 300 items in there, common capital markets, common regulations, allowing cross border in this in the EU competition, there's huge regulatory, not tariff or regulatory burdens. They need to do the same in uk. I think Keir Stormer is a very smart guy. Politics is really tough. They're in a bind because of debts and deficits and they inherited a lot of that. I think the world of racial reeves and they got to be tough, they got to say we're going to do these things and the short term may not be great but you know, governments have to get this stuff done right that grows the economy and militarily and I think they need to work close with Europe. And you know, if you, if you remember Keir Starmer and President Macron, they were going to work closer, not reversing Brexit, but you know, military alliances, intelligence alliances, making sure the economies, you know, have economic relationship good for both the continent and good for Europe.
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Bloomberg Host
You're building a big megaproject canary work that everyone is quite excited about. Does this potential politically instability actually change your view on everything or, you know, do you see costs going up? Are you worried about taxation?
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Jamie Dimon
Political instability? But if they become hostile the banks again? Yes. I mean I've always objected the fact, you know, we didn't damage the UK in any way. We paid probably $10 billion of extra taxes by now. I don't think that's right or fair. If that happens too much, we will reconsider.
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Bloomberg Host
I know you've also looked a lot at Europe and funding and, you know, especially when it comes to security. How much time are you spending making sure that defense companies that in Europe have enough funding from JP Morgan to make sure that they can, I guess, defend.
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Jamie Dimon
So we have this huge effort we deploy over the years, $1.5 trillion to help. It's not just resiliency. It's even medicines and rare earth, which would be defense, semiconductor defense. But it's anything that you need. So you. Europe needs lng. So we look at that as resiliency for Europe. Not LNG in America, but shipping here is resiliency. So we, we have professionals doing. We've got unbelievable Advis. We've dedicated 30, 40 people. We're doing research now, which you might be interested, across the shipbuilding ecosystem, across the active pharmaceutical system, the rare earth system, and then having public policy which puts us in a better position. We, the democratic world should never have gotten here. We're so reliant on other people, potential adversaries for rare earths. And we did. So don't cry, we spilled milk. But let's fix it, and we've got to fix it right away.
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Bloomberg Host
And this is good for the US to be. Does the US need stronger allies?
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Jamie Dimon
It is good for the US And I think having strong allies is good for you. So my view is we need a stronger Naito. They're doing that, by the way. So, you know, our president pushed them a lot while they're all doing it, which is a good thing, but we want to keep it together. The goal of it should be to have a stronger Naito, not a weaker NATO. The goal, in my view, if I. If you ask me what the goal should be of our economic relations with Europe, should we have a stronger Europe to get you to help you do the Draghi report. And I wrote my chairs, like maybe a pipe dream that if you did the Draghi report, I would give you one big beautiful free trade bill. That's what I would do. And you know, and then fix them. There are some stupid trade issues and fix them. But we both. The economy go better if they grew, better be good for all the citizens, not just good for the big companies. And so. And I think those two things are pillars of keeping the world safe and free for democracy. So they're not a minor thing, they're a major thing. If you look at over 20 or
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Bloomberg Host
30 years today, how would you fix the Middle East?
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Jamie Dimon
That I do not know. You know, I hear a lot of politicians say there was no imminent threat from Iran. I might. That immediately gets my back up because a threat is I'm threatening to do something. You. They've been raping, killing and murdering for 47 years. Why the Western world allowed proxy wars. I mean, we've learned a lesson that we should have gone years ago at the head of the snake. We should have killed the head of the snake, you know, and so now, so now you have more risk but be more opportunity because people want peace in the Middle East. Now we have this. It's a terrible situation. I don't know the outcome. I hope there's a plan C or a plan B. I want us to prevail in the way that makes sense. I don't know what the right thing to do was, but I'm not going to sit and say they weren't a threat. We should have done nothing.
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Bloomberg Host
But today, does the Strait of Hormuds need to reopen almost at any cost?
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Jamie Dimon
It will eventually be open. I don't know. I don't know. You know, you're talking about the military. Military has been playing for things like this for 40 years.
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The Hartford Narrator
Years.
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Jamie Dimon
They have plans. I don't know what those plans are. And you know, I hope it works. I just don't know.
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Bloomberg Host
I mean, what is the one thing you wish you knew now given. I mean, there's a lot of uncertainty in the world, right? Geopolitics, markets. If you could know one thing for certain from the president, what would it be?
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Jamie Dimon
Well, I don't know about that. I just want to. I look, I just roll up my sleeves and try to make it better than it was. So I don't guess for about one good thing or something like that.
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Bloomberg Host
This is so noisy. It's like speaking to you at a med school or it's like. It's quite fun.
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Jamie Dimon
You're doing a good job though.
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Bloomberg Host
You too. Thank you so much for joining us today. That was of course the Chief Executive Officer of JP Morgan.
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Indiana University Narrator
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The Hartford Narrator
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