Jamie Dimon, CEO of JPMorgan Chase, testifies during the Hearing of the Banking, Housing and Urban Affairs of the Senate entitled Annual Supervision of the Signatures of Wall Street, in the Hart building on December 6, 2023.
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The more I worry Jamie Dimon, the better she seems to make her bank.
As JPMorgan Chase He has become bigger, more profitable and increasingly crucial for the economy of the United States in recent years, his CEO of Star has become more vocal about what could go wrong, everything while things are still running for their bank.
In the best moments and in the worst moments, Dimon's public perspective is gloomy.
Whether it is its prognosis of 2022 for a “hurricane” that hits the economy of the United States, its concerns about the frayed world order after World War II or its precaution on which the United States is affected by a single blow of recession and inflation, Dimon seems to tie each profit report, television appearance and investor event with another serious warning.
“His history of leading the bank is incredible,” said Ben Mackovak, a member of the Board of Four Banks and Investors through his firm partner of Bank Strategic Bank. “His history of making predictions of economic calamity, not so good.”
During his two decades leading Jpmorgan, Dimon, 69, has helped build a financial institution unlike any world he has seen.
An expanding giant in both Main Street Banking and in Wall Street High Finance, Dimon's Bank is, in his own words, a winner of the final game when it comes to money. It has more branches, deposits and online users than any pair and is a leading credit card franchise and small businesses. It has a higher market share in both commercial banking and investment, and more than $ 10 billion on its global payment rails daily.
'All warning'
A 20 -year review of annual letters of Dimon investors and their public statements show a different evolution. He became CEO in 2006, and his first decade at the head of JPMorgan was consumed by the United States real estate bubble, the financial crisis of 2008 and its long consequences, including the acquisition of two failed rivals, Bear Stearns and Washington Mutual.
However, when he began his second decade leading JPMorgan, just when the legal hangover of the mortgage crisis began to fade, Dimon began to see new storm clouds on the horizon.
“There will be another crisis,” he wrote in his letter from the April 2015 CEO, reflecting on possible triggers and pointing out that recent turns in US debt were a “warning shot” for markets.
That passage marked the beginning of more frequent financial warnings of Dimon, including the concerns of a recession, which did not happen until the 2020 pandemic triggered a two -month contraction, as well as concerns about the market crises and the American globe deficit.
But he also marked a decade in which JPMorgan's performance began licking the rivals.
After leveling approximately $ 20 billion in annual earnings for some years, the expansion that Dimon really supervised began to reach its rhythm. JPMorgan generated seven annual records from 2015 to 2024, more than double than in the first decade of Dimon as CEO.
At that time, investors began to aggressively offer JPMorgan's shares, buying the idea that it was a growing company in a boring sector. JPMorgan is now the most valuable financial firm in the world that is quoted in the stock market and is spending $ 18 billion annually in technology, including artificial intelligence, to stay that way.
While Dimon seems perpetually concerned with the economy and the increase in geopolitical agitation, the United States continues to advance. That means that unemployment and consumer spending have been more resistant than expected, allowing JPMorgan to produce record profits.
In 2022, Dimon told a space for professional investors who prepare for an economic storm: “At this time, it is a bit sunny, things are fine, everyone thinks that the Fed can handle this,” said Dimon, referring to the Federal Reserve that manages the postpandandemics economy.
“That hurricane is just outside, along the way, reaching our path,” he said.
“This may be the most dangerous moment that the world has seen in decades,” Dimon said the following year in a profit statement.
But the investors who listened to Dimon and made their wallets lost the best two -year career for the S&P 500 In decades.
'You look stupid'
“It is an interesting contradiction, no doubt,” Mackovak said about Downbeat's comments and his bank's performance.
“Part of this could be Jamie Dimon's brand construction,” said the investor. “Or have a win-win narrative in which if something goes wrong, you can say: 'Oh, I called it', and if not, well, your bank continues to progress.”
According to the former president of a main American financial institution, bankers know that it is wiser to transmit caution than optimism. Former Citigroup The CEO Chuck Prince, for example, is better known for its unfortunate 2007 comment about the mortgage business that “while the music is playing, you have to get up and dance.”
“One learns that there is much more inconvenience in his reputation if you are too optimistic and that things go wrong,” said the former president, who asked to remain anonymous to discuss Dimon. “It is harmful to your bank, and you look stupid, while vice versa, it seems that you are being a very cautious and reflective banker.”
The bank is ultimately, a calculated risk business, and its CEO must be in tune with the disadvantage, to the possibility that they are not paid in their loans, said bank analyst Mike Mayo of Wells Fargo.
“It is the old cliché that a good banker has an umbrella when the sun shines; they always look around the corner, always aware of what could go wrong,” Mayo said.
But other Dimon observers for a long time see something else.
Dimon has a “hidden motive” for his public comments, according to the portal analyst Partners Charles Peabody.
“I think this rhetoric is to keep their management team focused on future risks, whether they occur or not,” Peabody said. “With a high -growth and high growth franchise, it is trying to prevent them from becoming complacent, so I think a constant atmosphere of the war -ward of war is rooted in its culture.”
Dimon has no shortage of things to worry about these days, despite the fact that his bank generated a record of $ 58.5 billion in profits last year. The conflicts in Ukraine and Gaza are enraged, the national debt of the United States grows and the commercial policies of President Donald Trump continue to shake the opponents and allies equally.
Bank logos cemetery
“It is fair to observe that it is not omniscient and that not everything that says comes true,” said Bank Truist Brian Fortan analyst. “He comes more from a perspective that you must be prepared for X, instead that we are convinced that X will happen.”
JPMorgan was better positioned for higher interest rates than most of his peers in 2023, when the rates increased and punished those who had long -term long -term bonds, Fortan said.
“For many years, he said: 'Be prepared for 10 years at 5%, and we all think I was crazy, because it was like 1% at that time,” said Fortan. “It turns out that being prepared was not a bad thing.”
Perhaps the best explanation for Dour Outlook of Dimon is that, no matter how big and powerful JPMorgan, financial companies can be fragile. The history of finance is one of the promotions and the fall of the institutions, sometimes when managers become complacent or greedy.
In fact, the cemetery of the bank logos that are no longer used includes three – Bear Stearns, Washington Mutual and First Republic, which has been subsumed by JPMorgan.
During the investor day meeting this month, Dimon said that, in the last decade, JPMorgan has been one of the only companies to obtain annual returns of more than 17%.
“If you return to the previous 10 years, OK, many people won more than 17%,” Dimon said. “Almost everyone declared bankruptcy. Do you listen to what I just said?”
“Almost all the world's large financial companies almost did not succeed.” “It's a difficult world.”
