Why Jamie Dimon Says Private Credit Is Dangerous But Still Invests in It

Summary

WSJ What’s News: Detailed Summary – July 14, 2025

Host: The Wall Street Journal

---

U.S.-Russia Trade Tensions Escalate

Timestamp: [00:41]

President Donald Trump intensified economic pressure on Russia, threatening a 100% tariff if a peace deal with Ukraine isn't reached within 50 days. Speaking during a meeting with NATO Secretary General Jens Stoltenberg, Trump expressed deep dissatisfaction with Russian President Vladimir Putin.

Donald Trump [01:18]: "We are very unhappy with him and we're going to be doing very severe tariffs if we don't have a deal in 50 days. Tariffs at about 100%, you'd call them secondary tariffs. You know what that means."

Commerce Secretary Howard Lutnick clarified that the administration might impose either tariffs or sanctions on nations engaging in business with Russia, signaling a strategic pivot in the ongoing trade conflict.

---

Justice Department Prioritizes Tariff and Customs Cases

Timestamp: [04:15]

The Justice Department announced a newfound focus on tariff and customs violations, marking a significant shift in priorities traditionally centered on white-collar crimes like foreign bribery.

Corinne Ramey [04:15]: "We haven't seen this before in terms of this being a white collar priority."

This move comes in response to increased attempts by importers to exploit loopholes amid Trump's aggressive tariff strategies. Companies are grappling with fluctuating tariff deadlines and rates, leading to legal uncertainties.

Corinne Ramey [02:46]: "Some companies have said if they have to pay tariffs as high as some that have been named or threatened that it could put them out of business."

The administration is preparing to crack down on both legal and illegal methods companies might use to evade tariffs, emphasizing the seriousness of enforcement.

---

Market Reactions to Tariff Announcements

Timestamp: [04:46]

Despite mounting tariff threats, major U.S. stock indices showed resilience, with:

• Nasdaq reaching a record high, inching up by 0.3%
• Dow Jones increasing by 0.2%
• S&P 500 gaining approximately 0.1%

This suggests investor confidence remains steady despite potential trade disruptions.

---

Supreme Court Upholds Trump Administration’s Layoff Plans

Timestamp: [04:46]

The Supreme Court permitted the Trump administration to proceed with mass layoffs at the Education Department, overturning a lower court's blockage of the plan. This decision paves the way for Education Secretary Linda McMahon to significantly restructure the department.

Alex Osoleff [04:46]: "The order clears the way for education secretary Linda McMahon to weaken the department from within."

While McMahon aims to redefine the department’s mission, completely dismantling it would necessitate Congressional approval, which remains unlikely according to political analysts.

---

Jamie Dimon’s Concerns Over Private Credit

Timestamp: [06:25]

Jamie Dimon, CEO of JPMorgan Chase, has voiced significant concerns about the burgeoning private credit market, likening its rapid expansion to the subprime mortgage craze that precipitated the 2008 financial crisis.

Jamie Dimon [February 2025]: "Wall Street's hottest trend is a recipe for a financial crisis."

Despite his warnings, JPMorgan announced a substantial $50 billion investment in private credit, highlighting a paradox in Dimon's stance.

Alexander Saidi, WSJ’s banking and finance reporter, explained that the private credit sector has ballooned to nearly $700 billion since 2006, fueled by capital eager to lend to sub-investment grade companies. The increased competition has led to riskier borrowing profiles, raising red flags for potential instability.

Alexander Saidi [07:05]: "Dimon believes he's seeing a lot of the same signs and symptoms of a crisis in the hot activity around private credit these days."

JPMorgan's foray into private credit differs from previous attempts by utilizing the bank's infrastructure rather than separate private lending funds, aiming for greater control and responsibility in managing risks.

Alexander Saidi [09:23]: "They have a lot of money. So whatever happens, we think we're going to be okay."

This strategic move underscores JPMorgan’s confidence in navigating the private credit landscape, despite inherent risks highlighted by their CEO.

---

The Enduring Relevance of Landlines in Business

Timestamp: [10:03]

Contrary to the decline of landlines in residential settings, businesses across various sectors continue to rely heavily on traditional telephony.

Isabel Bousquet, WSJ Enterprise Technology Reporter, identified several reasons for this persistence:

• Reliability in Emergencies: Landlines offer consistent service during power outages and are legally mandated in industries like hospitality and healthcare.

  Isabel Bousquet [10:22]: "Hotels are actually legally mandated to have these in every single room."

• Operational Needs: Sectors such as finance require call monitoring and recording, which is more seamlessly managed via landlines.

  Isabel Bousquet [10:22]: "It's more seamless to do that on a landline than it is on a cell phone or a smartphone."

• Separation of Work and Personal Life: Landlines help maintain clear boundaries, preventing the blend of personal and professional communications.

Isabel Bousquet [10:22]: "Some companies also feel like it creates more of a separation between work and personal usage."

Technological advancements have modernized landlines, integrating Internet Protocol (IP) and AI features like background noise reduction, ensuring their continued functionality and relevance.

Isabel Bousquet [11:17]: "Now they can send data over IP or Internet protocol and networks. They've gotten a lot more reliable."

---

New York City Mayoral Race Heats Up

Timestamp: [12:04]

In a surprising turn following his defeat in the Democratic primary, former Governor Andrew Cuomo is gearing up for a competitive general election campaign for New York City Mayor. Running under the independent Fight and Deliver Party, Cuomo faces a rematch against Zoran Mamdani and contends with incumbent Mayor Eric Adams, who is also running as an independent. Other candidates include Republican Curtis Lewa and Independent Jim Walden.

Alex Osoleff [12:04]: "Andrew Cuomo plans to mount a competitive campaign in the general election for mayor of New York City after his surprise loss in the Democratic primary to Zoran Mamdani."

This race promises a dynamic political landscape, with multiple candidates vying for the mayoralty in what could be a closely contested election.

---

Conclusion

In this episode of WSJ What’s News, host Alex Osoleff navigates through a spectrum of pressing issues—from escalating U.S.-Russia trade tensions and significant shifts in the Justice Department's priorities, to Jamie Dimon's cautious yet committed stance on the volatile private credit market. Additionally, the enduring utility of landlines in the business sector and the unfolding dynamics of the New York City mayoral race provide listeners with a comprehensive overview of current events shaping the economic and political landscape.

---

Produced by Anthony Banci and Pierre Bienname with supervising producer Michael Cosmides.

Transcript

[Venmo Advertiser]

With the Venmo Debit card, you can Venmo everything. Your favorite band's merch. You can Venmo this or their next.

[Alex Osoleff]

Show, you can Venmo that.

[Venmo Advertiser]

Visit Venmo Me Debit to learn more. The Venmo MasterCard is issued by the Bancorp bank and a pursuant to license by Mastercard International, Inc. The card may be used everywhere MasterCard is accepted. Venmo purchase restrictions apply.

[Alex Osoleff]

President Trump raises pressure on Russia with a 100% tariff threat and a weapons deal for Ukraine. Plus back battling tariff cheaters turns into a new front in Trump's trade war.

[Corinne Ramey]

The Justice Department has said that it plans to prioritize tariff and customs cases and this is brand new. We haven't seen this before in terms of this being a white collar priority.

[Alex Osoleff]

For the Justice Department and why Jamie Dimon is warning that Wall Street's hottest trend is a recipe for a financial Crisis. It's Monday, July 14th. I'm Alex Osoleff for the Wall Street Journal. This is the PM edition of what's News, the top headlines and business stories World Today President Trump has threatened to increase economic pressure on Moscow if there's no peace deal with Ukraine in 50 days, underscoring his growing anger with Russian President Vladimir Putin. Speaking from the White House during a meeting with NATO Secretary General Mark Ruta, Trump said, we are very unhappy.

[Donald Trump]

I am with Russia, but we'll discuss that maybe a different day, but we're very, very unhappy with him and we're going to be doing very sever year tariffs if we don't have a deal in 50 days. Tariffs at about 100%, you'd call them secondary tariffs. You know what that means.

[Alex Osoleff]

Commerce Secretary Howard Lutnick later said Trump could choose to impose either tariffs or sanctions on countries that do business with Russia. In the meeting with Ruta, Trump said the US has reached a deal with the North Atlantic Treaty Organization that would send weapons and air defenses to Ukraine within days. The decision to sell American weapons to NATO countries for use in Ukraine is a major policy shift for the US which during the Biden administration donated arms to Kiev. Trump said that the shipment of weapons going to Ukraine in the coming days includes Patriot missile defense systems from some European countries. The US Will then replenish supplies for the countries who donate. Like Newton's third law of motion, for every action there is an equal and opposite reaction. And so it follows that after President Trump's announcement of sweeping tariffs, importers started to look for ways to avoid them. WSJ reporter Corinne Ramey covers courts and has found that trade lawyers say clients are inundating them with questions about the line between lawful loopholes and fraud. Corrine, what were companies reactions to this tariff news? Why are they trying to skirt these tariffs?

[Corinne Ramey]

I had one lawyer tell me that companies are going through sort of the stages of grief after these tariff announcements, that at first they would be like, why me? And then eventually get to the point of what do I do about it? And so I think companies now are at that what do I do about it? Phase. Some companies have said if they have to pay tariffs as high as some that have been named or threatened that it could put them out of business. One complicating factor is that President Trump keeps changing deadlines and amounts and other details about these tariffs. So it's fairly chaotic for folks who are navigating this.

[Alex Osoleff]

How are these companies, along with the trade lawyers that are advising them, working on avoiding the tariffs?

[Corinne Ramey]

So there are several adjustments that companies can make to change the amount of tariffs that they pay. They could classify their product differently because different classifications of products have different tariff amounts. They could change the product's value. And they could also change what country a product is coming from. And to perhaps state the obvious, you can do this in legal and you can do this in illegal ways. If you lie about what country your product is coming from, that's illegal. If you make changes to your supply chain where your product is actually coming from another country, that's different.

[Alex Osoleff]

And what does the Justice Department have to say about these illegal cases, as you say?

[Corinne Ramey]

So the Justice Department has said that it plans to prioritize tariff and customs cases. And this is brand new. We haven't seen this before in terms of this being a white collar priority for the Justice Department. They've really backed off a lot of other areas, say foreign bribery and similar. And so for them to affirmatively say we're going after this, that's meaningful.

[Alex Osoleff]

That was WSJ reporter Corinne Ramey. Thanks so much, Corinne.

[Corinne Ramey]

Thanks for having me.

[Alex Osoleff]

Investors didn't flinch at the latest tariff threats, with major US Indexes posting modest gains. The Nasdaq closed at a record high, adding about 0.3%. The Dow rose 0.2% and the S&P 500 inched up about 0.1%. The Supreme Court has allowed the Trump administration to begin mass layoffs at the Education Department, halting a lower court ruling that had blocked the White House's plans indefinitely. The order clears the way for education secretary Linda McMahon to weaken the department from within. She has said she's leading the agency's final mission while acknowledging that eliminating it altogether would require the approval of Congress, something that political observers say is unlikely. The unsigned order from the court's six justice conservative majority didn't elaborate on its reasoning, which is typical in such cases. The three liberal justices dissented. Coming up, why JPMorgan Chase is investing billions of dollars in a market that its CEO compared to the craze that sparked the 2008 financial crisis. That's after the break.

[Indeed Advertiser]

This episode is brought to you by Indeed. When your computer breaks, you don't wait for it to magically start working again. You fix the problem. So why wait to hire the people your company desperately needs? Use Indeed's sponsored jobs to hire top talent fast. And even better, you only pay for results. There's no need to wait. Speed up your hiring with a $75 sponsored job credit at indeed.com/podcast terms and conditions apply.

[Alex Osoleff]

Private credit has grown fast over the past two decades, up more than 100 fold since 2006 to nearly $700 billion last year. But Jamie Dimon, the CEO of JPMorgan Chase, isn't all that excited about it. Earlier this year, he said that Wall Street's hottest trend is a recipe for a financial crisis, and yet even the bank he leads is getting in on the private credit action. Alexander Saidi, who covers banks and finance for the Journal, is here to tell us more. So Alex, in February, Dimon said the private credit boom reminded him of the craze in subprime mortgages that sparked the 2008 financial crisis. Bold words. What is the risk here? What exactly is he talking about?

[Alexander Saidi]

What he sees is a boom in a market. So in this case, we're talking about loans to companies, mostly that are sub investment grade or junk rated. So there's been a huge amount of capital raised to lend money to these types of companies. And as more money has been raised, there's been more and more competition for deals. So the profile of the average company that's borrowing from these markets has gotten steadily worse over time. And Dimon believes he's seeing a lot of the same signs and symptoms of a crisis in the hot activity around private credit these days. And also there's the fact that now that we're kind of late in the cycle, a lot of institutions are now chasing to get in on it before it's too late. Ironically, that also includes his own institution, J.P. morgan.

[Alex Osoleff]

Right, because just hours before this speech where Dimon compared the private credit boom to the 2008 financial crisis, JP Morgan had announced that it was investing $50 billion in, in private credit. So why are they moving ahead with this?

[Alexander Saidi]

Anyway, what's going on here is a structural change in how companies access loans, how they borrow money. The main thing that's shifted is that a number of private investment funds are becoming increasingly important channelers of financing for corporate America. So as these funds have gotten more and more popular, they've actually been taking business away from banks like JP Morgan. And they've realized they need to do something to respond to this because their clients want these sort of private, more bespoke, a little bit riskier financial products that banks just weren't really set up to give. The regulators don't like them taking these more esoteric risks, especially in sub investment grade credit. However, the idea is JP Morgan thinks we can do this responsibly. We as a bank can ride through it because we're experts in this. We have a lot of money. So whatever happens, we think we're going to be okay.

[Alex Osoleff]

This is not the first time that JP Morgan has gone into private credit. The first time was after the 2008 financial crisis. But now they're kind of dipping their toes back in what's different this time around?

[Alexander Saidi]

What's different this time around is that they're actually using the bank itself to do these loans as opposed to creating its own private lending fund, which is the structure you're seeing in of Wall street right now. They've experimented with that model in the past. It didn't really work out. So now that it's in the bank, they have a little bit more control over how the strategy works. And time will tell how successful the strategy is. But they are committed to the bank as the place where their new private loans will be coming from. And that's a bit unique, and we'll see how it goes.

[Alex Osoleff]

That was WSJ reporter Alexander Saidi. Thanks, Alex.

[Alexander Saidi]

Thank you.

[Alex Osoleff]

In most homes, traditional landline telephones are a relic of the past. In the business world, though, landlines are alive and well. For more, I'm joined by WSJ Enterprise technology reporter Isabel Bousquet. Isabel? Businesses from hotels and hospitals to restaurants and corporate offices all still rely on landlines. Why?

[Isabel Bousquet]

There's a few different reasons, and it varies a little bit from industry to industry. But landlines are still more reliable in emergencies. In a lot of jurisdictions, hotels are actually like legally mandated to have these in every single room. Hospitals as well, anywhere where people are staying overnight. And even if it's not legally mandated, if there's patchy cell service and someone needs to call 91 1. Hotels can be liable if they don't have them. In other industries, like in finance, for example, a lot of calls have to be monitored and logged and recorded. And sometimes it's more seamless to do that on a landline than it is on a cell phone or a smartphone. Some companies also feel like it creates more of a separation between work and personal usage. It's hard to scroll Instagram from like a plastic handset.

[Alex Osoleff]

What are communications companies doing to make sure that this critical system, as you say, continues to function?

[Isabel Bousquet]

It's important to note landlines have developed over the years. In the old days, they would be just using these antiquated copper wires. Now they can send data over IP or Internet protocol and networks. So they've gotten a lot more reliable. The AT&TS and Cisco's of the world also trying to make them better and better. Cisco in particular is embedding some AI into their phones. They have an AI feature that does background noise reduction. The market is worth about 1.3 billion globally. It's not the biggest market in the world, obviously, but for these companies, it's important.

[Alex Osoleff]

Joining me from Not A Landline was WSJ reporter Isabel Bousquet. Thank you, Isabel.

[Isabel Bousquet]

Thanks again.

[Alex Osoleff]

And finally, former New York Governor Andrew Cuomo plans to mount a competitive campaign in the general election for mayor of New York City after his surprise loss in the Democratic primary to Zoran Mamdani. Cuomo's name will appear on the general election ballot under the independent Fight and Deliver Party he created as a backup plan in the event he lost the primary. The general election will be a rematch between Cuomo and Mamdani and will also feature Mayor Eric Adams, who's running as an independent. Curtis Lewa, the Republican nominee, and Independent Jim Walden will also be on the ballot. And that's what's news for this Monday afternoon. Today's show is produced by Anthony Banci and Pierre Bienname with supervising producer Michael Cosmides. I'm Alex Osola for the Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.