{"id":89181,"date":"2016-05-05T09:23:15","date_gmt":"2016-05-05T13:23:15","guid":{"rendered":"http:\/\/countingpips.com\/?p=89181"},"modified":"2016-05-05T06:25:17","modified_gmt":"2016-05-05T10:25:17","slug":"view-from-the-corner-office-a-conversation-with-jamie-dimon","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2016\/05\/view-from-the-corner-office-a-conversation-with-jamie-dimon\/","title":{"rendered":"View From the Corner Office: A Conversation With Jamie Dimon"},"content":{"rendered":"
May 5, 2016<\/div>
\r\n<\/div><\/div>

By WallStreetDaily.com<\/u><\/a> \"View<\/p>\n

Among the many things that Jamie Dimon and Jonathan Tisch have in common are their highly successful careers and accomplishments in business and finance.<\/p>\n

Jamie Dimon is the Chairman of the Board and CEO of JPMorgan Chase & Co.<\/strong> (JPM<\/a>), while Jonathan Tisch is the Chairman of Loews Corp.<\/strong> (L<\/a>).<\/p>\n

Both are charismatic and engaging men \u2013 not to mention benevolent \u2013 with a distinct interest in sharing their experiences and wisdom.<\/p>\n

Their successes and willingness to share knowledge are what brought them together on April 28, 2016, under the auspices of yet another of their similarities.<\/p>\n

Both visionaries graduated from Tufts University in the 1970s. This resulted in an intelligent and enlightening conversation in front of an audience of Tufts graduates \u2013 myself included \u2013 held at the bank\u2019s headquarters.<\/p>

\r\n
\r\n

Free Reports:<\/p><\/div>\r\n

\r\n

<\/a>\r\n\t Get Our Free Metatrader 4 Indicators<\/u><\/b><\/a> - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter<\/p>

\r\n
\r\n
\r\n

<\/a>\r\n\t Get our Weekly Commitment of Traders Reports<\/u><\/b><\/a> - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.<\/p>

\r\n<\/div>\r\n

\r\n
<\/div>\n

Throughout the exchange, Dimon was open and earnest in his responses to Tisch. They discussed everything from Dimon\u2019s upbringing, to the birth of JP Morgan, the Chinese markets<\/a>, that 85-page shareholders letter, banking culture, and more.<\/p>\n

And the deeper they dug into dialogue, the more they revealed about the markets, and the man himself: Jamie Dimon.<\/p>\n

Growing Up Jamie<\/h2>\n

Banking was practically in Dimon\u2019s blood \u2013 as both his father and grandfather were stockbrokers with investment firm Shearson Lehman. But, he jokingly admits that his \u201cfather was more like a socialist,\u201d and his \u201cmother was a complete Freudian.\u201d<\/p>\n

While neither of his parents went to college, they made education a priority in their household.<\/p>\n

After graduating from Tufts, Dimon worked for what he humorously refers to as a \u201cthird-rate consulting firm.\u201d<\/p>\n

He then earned his MBA from Harvard while his two brothers earned their doctorates \u2013 one in physics and the other in education.<\/p>\n

Changing the Game<\/h2>\n

Tisch asked Dimon to reflect on the changes he has witnessed in the world of financial services in the 35 years he\u2019s been in the business. Needless to say, in over three decades, Dimon has watched the market go through many dramatic highs and lows.<\/p>\n

For comparison sake, when Dimon graduated Harvard, Exxon\u2019s dividend yield was a whopping 10% as compared to today\u2019s modest 3.4%.<\/p>\n

Dimon assured the audience, however, that there will always be smart people in finance \u2013 an increasingly complex industry \u2013 and that there will always been innovations coming to market.<\/p>\n

Wall Street was a relatively small realm when Dimon started out \u2013 each of the businesses that would eventually merge to become JPMorgan Chase were only worth about $1 billion in market cap (as opposed to the value of JMP today, which stands at over $229.69 billion).<\/p>\n

JPMorgan is, now, made up of companies such as \u00a0Chase Manhattan Bank<\/a>,\u00a0JPMorgan & Co.<\/a>,\u00a0Bank One<\/a>,\u00a0Bear Stearns<\/a>,\u00a0and\u00a0Washington Mutual<\/a>. Going back even further, Chemical Bank<\/a> and\u00a0Manufacturers Hanover<\/a>,\u00a0among others, also made up the list.<\/p>\n

As a masterpiece conglomerate, JPMorgan is the model of successful merging.<\/p>\n

Consolidation and China<\/h2>\n

But, Dimon expects further consolidation in the sector.<\/p>\n

He believes that while there are over 7,000 brokerage houses today, \u201cthere are going to be a lot less\u201d in the future. He detailed the nostalgia of a time when a banker would go to a vault, retrieve a bank note, and hand the certificate over to a messenger on a bike who then delivered it to another bank in exchange for cash.<\/p>\n

Today, customers do their banking remotely. And, while the bank has 22 million retail customers and 18 thousand ATMs, Dimon says the difference in services is that \u201cthe branches of yesterday were operational whereas today they are all about advice.\u201d<\/p>\n

There have been huge economies of scale in everything from systems and technology, to trading, legal and compliance. \u201cFin tech is not new but just more developed. Now 98% of FX trades are electronic as are 50% of swaps,\u201d Dimon explained.<\/p>\n

And, \u201ceveryone is doing business with China,\u201d and the nation\u2019s entrance into the global world, according to Dimon, has been a \u201chuge benefit.\u201d<\/p>\n

But the road to China\u2019s success is rocky as Dimon emphasized that approximately 600 million people in China continue to live in poverty.<\/p>\n

Regardless, \u201cChina beat the hell out of our politicians,\u201d Dimon exclaimed.<\/p>\n

Case in point: the Syngenta acquisition. China \u201cpicked 60 of its best companies and told them to buy everything they could overseas.\u201d<\/p>\n

Dimon identified China\u2019s need for market reform as a major area of contention.<\/p>\n

\u201cPeople cannot buy and sell things freely as the government continues to control everything,\u201d Dimon said, adding that \u201cthere were two times the Chinese kicked the white man out \u2013 now and in the 1300s.\u201d<\/p>\n

On Regulation<\/h2>\n

Dimon induced chuckles when he addressed regulatory reform.<\/p>\n

\u201cIt\u2019s beyond imaginable what they are inventing in Washington\u2026 We have to satisfy them so we\u2019ll bitch and moan and move on,\u201d Dimon stated.\u00a0 He then affirmed that, \u201cYou can\u2019t walk into my office and say \u2018I\u2019m not making money because of compliance.\u2019\u201d<\/p>\n

Dimon believes most of the current regulations won\u2019t be around in 10 years, though he acknowledges that \u201cthe system is safer as there is both more liquidity and capital.\u201d<\/p>\n

The banks, he says, continue to work through the regulations and remain profitable.<\/p>\n

Today, JPMorgan is the biggest bank for banks, extending $4.5 billion in intraday lines of credit and moving $6 trillion per day, overall.<\/p>\n

Dimon was recently quoted as saying that regional and community banks taking swipes at big banks are a \u201ckind of\u00a0bank-on-bank violence.\u201d<\/p>\n

He then wondered: \u201cWe do M&A, equity, debt, mortgages, swaps, securitizations, and more for you\u2026 What part of that was involuntary?\u201d<\/p>\n

Inside the Shareholder\u2019s Letter<\/h2>\n

Dimon justified JPMorgan\u2019s voluminous 85-page shareholders\u2019 letter by quantifying that the bank\u2019s 235,000 employees do business in over 100 countries, worldwide. How else were they going to cover the breadth of JPMorgan\u2019s activities?<\/p>\n

\u201cI am f***ing relentless\u201d he said, agreeing that while there are polluted firms on Wall Street doing side deals, \u201cThere are no special deals at JPMorgan\u2026 We are ethical and good and on the ball. We don\u2019t have a bad culture but that doesn\u2019t mean we can\u2019t get better.\u201d<\/p>\n

What he means in terms of JPMorgan \u201cgetting better\u201d is that there is always room for improvement, even with a view from the top.<\/p>\n

Dimon contends that the internet and mobile retail banking offer the next realm for JPMorgan\u2019s advancement. He sees cyber security as a major threat and stressed that he\u2019s prepared to \u201cspend whatever it takes to kick butt and I don\u2019t care about the budget.\u201d<\/p>\n

The Ethics of Banking<\/h2>\n

Extending his apologies to any Catholics in attendance, Dimon referenced an encounter with a nun, with whom he claimed he \u201chit it off.\u201d<\/p>\n

The nun, who wanted to discuss derivatives, felt that the banking industry could improve its culture in order to restore the public\u2019s faith in the system. Dimon, providing his own salutary advice said, \u201cYou could do a better job in improving your culture, too!\u201d<\/p>\n

On a serious note, however, Dimon emphasized that employees should treat every client like they would treat their own mother, and all other employees with respect \u2013 be it the doorman to their Manhattan headquarters or Dimon himself. When an employee asks if something should be disclosed to the client, he responds with, \u201cIf you have to ask, then the answer is a likely \u2018yes.\u2019\u201d<\/p>\n

The Bottom Line<\/h2>\n

Interest rates were, no doubt, on many minds of the audience.<\/p>\n

The bottom line, according to Dimon, is that rates will go up.<\/p>\n

He emphasized that a quarter of a percent move by the Fed means nothing in the grand scheme, and reminded us that Paul Volker \u00a0raised rates 2% on a Sunday night.<\/p>\n

\u201cExpect a rate hike after the Brexit vote or after the U.S. presidential elections of possibly \u00bd percent,\u201d Dimon warned, adding that \u201cStagflation is the worst thing for everyone\u2026 and the 10-year bond will go up even faster.\u201d<\/p>\n

With so much ground covered during their conversation, Dimon closed by addressing the question of what keeps him up at night. Dimon paused before responding: bad policy and the inability to enact change and positive reform.<\/p>\n

Overall, Dimon concluded: \u201cI\u2019m an optimist\u2026 The U.S. has the best rule of law, universities, financial markets, small, medium, and large businesses, democracy, innovation, and work ethic and we have it better today than ever; but that\u2019s not a divine right to success.\u201d<\/p>\n

When asked if he would ever serve in government, Dimon provided a flat out \u201cno.\u201d<\/p>\n

Perhaps one day he\u2019ll change his mind. With such a down-to-earth quality, and the sheer magnetism of his presence, Jamie Dimon would not only have a chance at a position in office, but he could really change the economy of the world as we know it.<\/p>\n

Wishful thinking\u2026 for now.<\/p>\n

Good investing,<\/p>\n

Shelley Goldberg<\/p>\n

The post View From the Corner Office: A Conversation With Jamie Dimon<\/a> appeared first on Wall Street Daily<\/a>.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

By WallStreetDaily.com Among the many things that Jamie Dimon and Jonathan Tisch have in common are their highly successful careers and accomplishments in business and finance. Jamie Dimon is the Chairman of the Board and CEO of JPMorgan Chase & Co. (JPM), while Jonathan Tisch is the Chairman of Loews Corp. (L). Both are charismatic […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-89181","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/89181","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=89181"}],"version-history":[{"count":3,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/89181\/revisions"}],"predecessor-version":[{"id":89198,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/89181\/revisions\/89198"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=89181"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=89181"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=89181"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}