Tags: Dimon | economy | banks | growth

JPMorgan's Dimon: 'Sun, Moon and Stars' Aligning for Stronger Economy

By    |   Thursday, 23 January 2014 12:52 PM

The universe seems to be shifting in favor of the economy and the financial industry, says Jamie Dimon, chief executive of JPMorgan Chase.

"I believe the sun, the moon and the stars are lining up," Dimon told CNBC.

"Corporate America is in excellent shape — profit margins, a lot of cash and capital. Middle market companies are in excellent shape," he noted. And small businesses are doing well, especially in terms of credit, Dimon added.

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"Housing has turned the corner. Six million more Americans are working. Americans are wealthier in their homes, in their 401(k)s," he stated.

"And the government is doing no damage," Dimon argued, adding that he's thankful the nation has a budget and will likely avert a debt ceiling crisis.

"Remember, companies want to expand. I've never seen a CEO who says, my goal is to shrink. The switch is always set to grow, and you may see people be more aggressive," he stressed.

With regard to the global economy, Dimon pointed out that it has already exceeded expectations.

Last year, people questioned whether Europe could grow at all, and it has grown a little bit, he explained, and people were worried China wouldn't grow at 7 percent, but it has.

"If you have China, Japan, Europe and the United States possibly all doing a little bit better, that's a pretty powerful thing. That's 75 percent of the global GDP right there," he maintained.

But what about the outlook for banks, which have become prime targets for regulators?

According to Bloomberg, 11 lenders in Europe racked up $10.8 billion in fines and settlements last year, while the six biggest U.S. banks set aside more for legal costs in 2013 than any year since 2008, and legal costs led JPMorgan to its first quarterly loss.

"Politicians remain to be convinced that bankers have done enough to clean up their act," said Howard Davies, board member at Morgan Stanley and former Bank of England deputy governor.

"Bankers declared war was over far too soon," he told Bloomberg.

Dimon admitted some battles are just beginning. JPMorgan is working to be "as pure as possible," he asserted, and overall he cited a positive outlook for his bank and the financial industry.

Looking at banks, it's "a tale of two cities," Dimon explained.

A lot of the banks have loan growth and deposit growth, which is "the real underlying business."

At JPMorgan, for example, deposits, assets under management and commercial real estate loans all saw double-digit increases, and then there's bond market and capital market activity.

These are positive signs that don't always reflect in revenue growth, "but they will eventually lead to profits," Dimon told CNBC.

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The universe seems to be shifting in favor of the economy and the financial industry, says Jamie Dimon, chief executive of JPMorgan Chase.
Dimon,economy,banks,growth
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2014-52-23
Thursday, 23 January 2014 12:52 PM
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