The next is a transcript of an interview with JPMorgan Chase CEO Jamie Dimon that aired Sunday, Dec. 11, 2022, on “Face the Nation.”
MARGARET BRENNAN: I am so glad, to begin with, that we’re lastly doing this.
JAMIE DIMON: I am thrilled too, I do know it has been some time.
MARGARET BRENNAN: So let’s begin off with why we’re right here. Why is America’s greatest recognized banker in an internal metropolis, low revenue neighborhood in Baltimore?
DIMON: I believe it is a- it is a form of a microcosm of banks do, which is to elevate up society. So most individuals consider us as an funding financial institution and a non-public financial institution and business financial institution, and we do all these issues. However we additionally financial institution you recognize, at 25%, of our branches are in decrease revenue neighborhoods, and we wish to elevate them up too. And so that is department here’s a uni-, we’re brand- we’re new to Maryland. So we’re now in 48 states. 30% of the branches right here in decrease revenue neighborhoods. They’re in communities. We work with native authorities of us, native not for income, you then present the mayor, governor-elect, what do they want and we name it a neighborhood department, means the neighborhood supervisor will get to know all the native of us – the church buildings, the faculties, the companies, and we invite individuals in for schooling about mortgages, wealth, beginning a enterprise, and many others. We use native distributors for meals to construct the place. We rent domestically, so their paychecks going out within the native neighborhood. And you’ll see the spirit of the individuals. I imply, it is very uplifting. And so it is simply a part of what we do. After which we come into city. We convey the whole lot else to authorities for not for revenue banking, we financial institution cities, colleges, states hospitals. So it is only a great approach to assist elevate up communities. And it is extraordinarily important for America to concentrate on serving to the underprivileged. I believe it is a mistake to only drive by and say that is not our drawback.
MARGARET BRENNAN: Mhmm.
DIMON: And so that you see plenty of corporations doing it. I am happy with all of the individuals to do it. And it is good for enterprise. I imply, when you elevate up society, it hurts- it helps everyone.
MARGARET BRENNAN: Nicely, that is what I wish to ask you. Since you’ve executed this now in Detroit, you’ve got executed this right here, you’ve got executed it in elements of Dallas. You are not a charity, you are doing this for revenue.
DIMON: Yeah. So individuals take a look at that there is a little piece of charitable cash, which typically I name an accelerator.
MARGARET BRENNAN: Mhm.
DIMON: So when you can put that little piece of charity and on prime that you would be able to construct $100 million of loans. However , however it’s not executed for charities, it is received to be sustainable. Issues which are not sustainable do not work very nicely. And so- However as soon as we have got collaboration with native authorities, we’re right here, we- we intend to make a revenue right here and open accounts right here and do issues like that. Like I stated, when you elevate up Baltimore, it lifts up each enterprise right here. It lifts up all of the individuals. you could have extra jobs, extra wages, higher social outcomes, higher actual property worth, so it is important we do it and it is vitally good for enterprise in the long term. And if everybody did it, you recognize, it might be excellent for all of America.
MARGARET BRENNAN: If everyone did this?
DIMON: If everybody – and quite a bit companies- (crosstalk)
BRENNAN: Financial institution of America’s throughout the road over there, is that where- the place you are speaking about?
DIMON: Nicely I am not going to say any rivals, however this can be a a lot nicer wanting department.
(Each chortle)
MARGARET BRENNAN: Nicely, once you – I imply, simply essentially – once you, once you lend cash, each events are in danger. So in coming in right here, JP Morgan has to alter a few of the parameters since you’re reaching people who find themselves unbanked.
DIMON: Sure
MARGARET BRENNAN: How have you learnt if somebody is credit score worthy In the event that they’ve by no means owned a house, they’ve by no means had a checking account? How have you learnt you are making a very good guess?
DIMON: It is an excellent query. So once you strive, once you’re right here and also you ask and you recognize the neighborhoods and you’re employed with authorities, you do a number of issues, So we do particular issues. Now we have- we name particular credit score, I will not undergo authorized parameters, however you are able to do – use different info that aren’t utilized in conventional underwriting, like do you- have you ever paid lease for 10 years? So that you and I might each say, if there’s a mom or father or household paying lease for 10 years, that is a very good credit score signal, so we take slightly little bit of a stretch on that.
And so we dwell and study, and so you should utilize plenty of knowledge to do this. The federal government right here, notice in terms of lifting up neighborhoods, you may’t do- you may’t have a block the place 50 houses, you recognize, 50 townhouses are dangerous or destroyed, and 50 are occupied. You need to elevate all of them up.
So the federal government right here got here up with a really particular program, to place within the seed cash to rehab-fit the entire block. As soon as they rehab the entire block, we will step in and begin making mortgages. So individuals should buy the houses and dwell there. And so there are- there are a number of paths to do it. On the entrepreneur of colour fund that we do with small companies, you recognize, we get- we give them an advisor too.That offers us nice consolation that they are doing the fitting issues.
MARGARET BRENNAN: So you’ve got been important up to now, although of government-backed lenders like Fannie Mae and Freddie Mac, for his or her function within the final disaster and, and loosening up the power to take loans. This was all at the moment nicely supposed –
DIMON: Sure
MARGARET BRENNAN: -to increase homeownership
DIMON: Sure (crosstalk)
MARGARET BRENNAN: So you may have a very good intention and repair it improper (crosstalk)
DIMON: You are completely appropriate. , issues executed badly are dangerous. And so there are plenty of examples the place lenders did the improper factor and the case banks and stuff like that, however we check, we study, we check, we study. And so this – these should not authorities applications, these are applications that we try this we’re fairly snug doing a very good factor. Will we take additional threat. Sure, however that is a part of our job. We have banked enterprise capital corporations, we financial institution startups, we financial institution lots of people. We’re adults, we’re large boys, we all know that their credit score cycles factor go up or down.
So we’re not taking a lot threat that it may sink an organization. Bear in mind, Fannie and Freddie went bankrupt. The federal government paid, you recognize, a whole lot of billions of {dollars} in that. And the opposite factor there by the way in which is a few of the underwriting was hidden. Folks did not really know what different individuals – with individuals have been doing within the underwriting which isn’t the case you right here.
MARGARET BRENNAN: So the general intent of boosting homeownership you imagine is absolutely necessary?
DIMON: Sure.
MARGARET BRENNAN: However on this second we’re in proper now – you could have mortgage charges -what? About 7%?
DIMON: 6 1/2 % yeah
MARGARET BRENNAN: Yeah, proper round there. It is onerous to get entry, however the Fed’s additionally attempting to chill off a housing market bubble.
DIMON: Yeah
MARGARET BRENNAN: So why strive –
DIMON: One other good query. We glance proper by means of that – so this is not we’re not doing this and pulling in or pulling out our horns as a result of the markets are good or dangerous. That is, you get to a neighborhood, you begin doing it.
So clearly, we’re most likely making much less mortgages now due to larger charges, however we’re locally, we’re gonna have mortgage officers locally, we’re gonna study extra concerning the neighborhood. And we’ll look previous the precise charges. And bear in mind the necessary factor about mortgages – and because of this I do criticize some public coverage typically – mortgages are how most People received their their web price. And if you cannot get a smaller mortgage to purchase a home, it is onerous to construct your web price. Mortgages are additionally, by the way in which, how typically individuals funded their small enterprise startup. So it’s completely important.
And you recognize one of many issues we have been attempting to alter slightly bit is due to all extreme guidelines now, and I am not speaking about issues would make threat worse about origination, servicing, securitization, the price of a small mortgage might be 50 foundation factors larger than it must be. In order that $150,000 mortgage or $200,000 mortgage is much less inexpensive by lots of people. And that is due to regulatory coverage. That is not due to financial institution coverage. And so, you recognize, I believe there are issues that could possibly be executed that may make mortgages way more inexpensive.
MARGARET BRENNAN: Nicely, if however you are saying not at this second, you are not essentially expecting- (crosstalk)
DIMON: No they need to change that proper now. Yeah.
MARGARET BRENNAN: So larger image on this effort proper now, you stated it is necessary to be attempting to do issues to deal with and construct up communities. So when you’re attempting to fight discrimination, increase racial fairness, that is admirable. However the different facet of the coin is a critic would say a giant dangerous Wall Road financial institution is loading debt onto poor individuals. How do you reply to that? As a result of-
DIMON: That is a reasonably ignorant particular person
MARGARET BRENNAN: Nicely-
DIMON: We-
MARGARET BRENNAN: You simply spent plenty of time in Washington, I am certain you could have heard plenty of criticism of Large Unhealthy banks (crosstalk)
DIMON: However that is a unique problem. We’re not attempting to load debt on anybody. And sure, I hear about large financial institution banks, however we’re right here, we’re doing jobs. We wish to make good mortgages, we wish to do good small enterprise loans, you wish to educate individuals easy methods to open an account, how to economize, we have got merchandise which might be particular for decrease revenue communities-
MARGARET BRENNAN: Proper
DIMON: We’re going to try this. It’s good for this neighborhood. If this neighborhood does higher, it is good for this neighborhood. It does not damage some other neighborhood. The truth is, it helps them.
MARGARET BRENNAN: However how do you reassure of us who say the lender should not be the educator?
DIMON: Nicely we’re educating them about how to economize
MARGARET BRENNAN: That is what these lessons are about? (crosstalk)
DIMON: Yeah, how to economize, easy methods to purchase a house, easy methods to handle a enterprise, when you begin a enterprise, easy methods to get a- easy methods to signal a lease, easy methods to negotiate a authorities contract, so plenty of its schooling, it is not lending cash. So you recognize, there is a particular account we’ve got is an account the place you recognize, you get a debit card, checking account, all of the companies, ATM companies, department companies, cannot overdraft.
MARGARET BRENNAN: You’ll be able to’t overdraft?
DIMON: No, when you purchase this account, it doesn’t enable an overdraft. So we’ve got plenty of services and products. we dwell and study. And I do not fear about naysayers on a regular basis. , we go- we we’ve got a TrueNorth. We all know what we’re doing. We elevate up societies around the globe. We do it from low revenue to excessive revenue, we do- we financial institution governments, we financial institution the IMF, we financial institution the World Financial institution, we financial institution center market corporations, we make small companies, we’re in decrease revenue neighborhoods. And we wish to help- we wish to do all of it nicely, and we have executed all of it nicely. We’re fairly snug with all of the issues we do and and that they are additionally good for shareholders in the long term.
MARGARET BRENNAN: So you’ve got been doing this explicit program since roughly 2020. Put about $18 billion into it.
DIMON: Yup
MARGARET BRENNAN: Do you wish to increase it?
DIMON: Yeah, so we have been doing applications like this for a very long time. The most important lesson to us, and we did this big effort in Detroit. So Detroit is without doubt one of the main American cities that had not had a renaissance. They ended up with a superb mayor, Mayor Duggan, we labored with him, we did an prolonged ten- virtually within the tenth yr anniversary – $250 million. I will not repeat all the identical issues, plenty of the same issues right here. However working with native nonprofits, native establishments, native authorities, and it really works you recognize, you may flip a metropolis, you can also make it work higher, you can- have you ever go- go to the- go into downtown Detroit and take a look at it right now versus what it was 15 years in the past, then you may see the highly effective effort. That form of knowledgeable us, you recognize what, we might do that in different places, in numerous methods. And so we’re all the time studying, however we now- we’ve got now of doing one thing like this in 15 cities
MARGARET BRENNAN: Do these states, do these governors and mayors come to you or are you still-
DIMON: They- typically. However you recognize, we we discuss we clearly discuss to plenty of them, however I believe you’ve got heard you recognize, Peter Scher speak about that the collaboration is what makes it. We’re not asking for presents from cities or states or something like that. However we additionally want their assist. Like I gave you that very particular instance about inexpensive housing right here.
MARGARET BRENNAN: Sure.
DIMON: In order that the principles legal guidelines are completely different in Michigan and are completely different in different places. So when you’ve received individuals working collectively works, if you recognize if the native authorities does not like enterprise and you recognize turns the scans and does not, you recognize, thinks we’re dangerous. So no, it is onerous to wish to do enterprise there they usually’re making a mistake. What they need to do is go to Detroit. Come right here. Go to a department, see what coverage works and what coverage does not work.
MARGARET BRENNAN: So in cities throughout the nation proper now, there is a homelessness drawback.
DIMON: Yeah.
MARGARET BRENNAN: And it is a few of it’s linked to many points, however one among them is simply accessible, and inexpensive housing. What incentive do you see for a developer proper now to go in and attempt to take a mortgage and construct up that form of housing, like what’s stopping that?
DIMON: we’re one of many greatest inexpensive lending within the within the nation and quite a bit different banks do plenty of nice job with that too. It’s- to begin with it is very native. It could possibly be zoning legal guidelines, it could possibly be necessities, it could possibly be constructing necessities. It could possibly be brand construct- it could possibly be one million various things. However we regularly present both the fairness or the debt or the mezzanine, to construct inexpensive housing, we do it in all places. So I can provide you- I might need to ship you a giant place papers-
MARGARET BRENNAN: Proper
DIMON: completely different by each state. It’s a large deal. It may be executed, however you actually need to have competent, inexpensive housing insurance policies.
MARGARET BRENNAN: And that comes down as you are saying to those neighborhood relationships- (crosstalk)
DIMON: It is community-
MARGARET BRENNAN: that it’s a must to attempt to resolve
DIMON: And neighborhood legal guidelines, there are neighborhood legal guidelines, there are metropolis legal guidelines, there are federal legal guidelines, there- Lots is authorized stuff.
MARGARET BRENNAN: I imply, you’ve got been in Washington for a couple of days, have you ever talked about this with lawmakers? I imply on the nationwide degree (crosstalk)
DIMON: I’ve talked concerning the mortgage factor. Oh I’ve talked plenty of these items on a regular basis. I am going to Washington on a regular basis, you know-
MARGARET BRENNAN: However the acute homelessnes-
DIMON: No. That is onerous for us to do, we do inexpensive housing.
MARGARET BRENNAN: Yup
DIMON: And, all these different points are so native, you bought to essentially get into the native degree. So our individuals become involved in that. And, and we become involved in federal insurance policies. However I believe one actually necessary factor, this can be a microcosm of what a financial institution does. And you recognize, after which different companies, you heard about different companies coming to decrease revenue neighborhoods and what they’re doing. Nevertheless it’s- however an important factor can be authorities federal coverage, round infrastructure, schooling, taxation, regulation, well being care. So we, you recognize, we received to sort out these issues from either side, good public coverage on the federal degree, good public coverage on the state degree. After which individuals like us doing our job, you recognize, that we’re- that we we’re meant to do. Finance, develop, develop individuals’s desires, assist them accomplish their targets.
MARGARET BRENNAN: So large image, since you’ve lived by means of plenty of disaster on this nation. And simply wanting again, you have been on the helm through the monetary disaster and the Nice Recession, sovereign debt disaster, the pandemic. This second we’re in looks like a transition level and inflection level. And I ponder how you consider the place America is at this second.
DIMON: Yeah. I believe- I imply, I believe it is essential individuals perceive, America is essentially the most affluent nation the world’s ever seen. Our fundamental ideas of freedom, freedom of speech, freedom of faith, are unbelievable. The innovation is unparalleled wherever around the globe. So begin with that. It is an incredible place of power. The economic system goes by means of a bunch of issues, and also you simply talked about them COVID, and stuff like that. And we do not, we do not all the time actually know whether or not you could have a gentle recession or onerous recession. And if it occurs, we’ll be advantageous. I really feel dangerous, horrible, for individuals who lose jobs. We wish to preserve it as quick as doable. I do suppose you are proper a few turning level. However that turning level is about geopolitics. That is about Ukraine, oil, Russia, conflict, migration, meals, nationwide safety, China commerce, that complete bucket of issues. And I might put in that class, quantitative tightening, which is mainly decreasing the liquidity within the banking system on the earth. That that’s really – neglect us for a second – that it might be very tough – excessive greenback, the greenback going up – larger charges and quantitative tightening on smaller nations around the globe
MARGARET BRENNAN: The World Financial institution and the IMF have been warning about this for some time.
DIMON: Sure. And a few say you bought to place that complete combine in -what’s occurring in geopolitics, I might say that that is important. And Ukraine is a turning level. , Ukraine is a turning level the place, you recognize, perhaps all this kind of self- phantasm that we had that some how the world’s at peace, and the whole lot could be advantageous, that ought to have been shattered. And due to this fact we must be fascinated by how can America do nice within the subsequent 100 years? What insurance policies ought to we’ve got? Clearly, it is a change. And you recognize, I maintain our army within the highest regard. However what they accomplish around the globe is extraordinary. However what do we want, and half is simply having a really sturdy economic system, which helps pay for all this, and it must be executed with our allies, in any other case, you are not going to finish up with the world that we actually need.
MARGARET BRENNAN: Once I checked out your final shareholder letter, which I do know you’re taking a direct function in writing
DIMON: Phrase -I write each phrase.
MARGARET BRENNAN: Nicely, that was April so-
DIMON: I get assist, however I write each phrase.
MARGARET BRENNAN: You, everybody, everybody goes by means of a course of and pondering by means of these items, and once you ranked a few of the issues worrying you, Ukraine was proper up there-
DIMON: Yeah
MARGARET BRENNAN: with all of the home points. That was proper after the conflict began.
DIMON: Yeah
MARGARET BRENNAN: And now we’re at some extent the place some would look and say, okay, it wasn’t the worst case state of affairs in Europe by way of extreme recession. They’re discovering methods to get oil and fuel elsewhere. Do you suppose in the identical approach now, as you did-
DIMON: Completely
MARGARET BRENNAN: -then by way of threat?
DIMON: I believe much more so.
MARGARET BRENNAN: Actually?
DIMON: That is a false sense of safety that you’ve got had this conflict happening, you recognize, for 9 months or no matter, and that one way or the other it is okay. Oil costs went approach up. Europe’s going by means of a recession. Migration has been extraordinary. You have not seen the complete impact of meals costs around the globe. In case you go to Europe, they- they’d – they’re taking this rather more critically than People are. They’re on the entrance line, you had these missiles going to Poland. You’ve, mainly nuclear blackmail. I imply, it’s as severe as you will get. So we should always all hope it goes away, that there is some form of armistice or settlement. , that is good for Ukraine, by the way in which.
MARGARET BRENNAN: Proper.
DIMON: However that is, that is the Western world underneath assault. I imply, that is to take it – something like that. And wars, when you learn the historical past of wars, they do not begin, they do not finish the way in which individuals suppose they’d after they began.
MARGARET BRENNAN: No
DIMON: In order that’s like each conflict. And so the hazard of this conflict is extraordinary. And it will possibly go on for years. However this oil and fuel factor, it appears like they’re, you recognize, the Europeans will get by means of it this winter. However this oil and fuel drawback goes to go on for years. So I, you recognize, if I used to be, you recognize, within the authorities or wherever else, I might say, I’ve to organize for getting a lot worse. I hope it does not. However I might undoubtedly be getting ready for it to get a lot worse.
MARGARET BRENNAN: What does that appear to be to you by way of what must be ready for on the power entrance?
DIMON: Nicely I- I used to be – so it is a number of issues. On the power entrance, we want safe, dependable, low cost oil and fuel. The issue, you recognize, lots of people suppose that oil and fuel costs being excessive is sweet for CO2. It is not. So low cost, dependable – you are trying to Germany, I imply, the Europeans are terrified. Their – their power costs are 2, 3, 4, 5 instances ours, which is hurting customers, which the governments need to do one thing about, and it is hurting companies. , and, and, and it is simply began. And so the ache and struggling might get quite a bit worse. So, and it has the profit, decrease costs take pleasure in having extra manufacturing. Okay. They take pleasure in serving to poor nations, decrease revenue people, our allies who’re determined for safer power, and CO2, as a result of fairly predictably-
MARGARET BRENNAN: Carbon emissions.
DIMON: Carbon emissions – as a result of fairly predictably carbon emissions are going up, as a result of nations wealthy and poor around the globe are turning on -back on their coal crops. They can not afford costly power, they usually cannot afford no power. So you recognize to me – to resolve local weather, we form of want all of the above, allowing, crops, fuel is the very best and cleanest method to cut back coal, which is one of the simplest ways to cut back CO2. So we’re actually considerate coverage, assured the coverage would get us there. Nevertheless it is also army coverage, financial coverage, together with commerce. So once I say financial, I am speaking about you recognize commerce is one factor, however financial is funding rights. So something that pertains to nationwide safety must be modified – like you recognize about semiconductor, uncommon earths –
MARGARET BRENNAN: I will ask you all about that. Yeah.
JAMIE DIMON: And OK in order that’ll when you ask me later, I will wait. However these are all issues that need to be fastened.
MARGARET BRENNAN: Let’s button up on economic system – on power, although, as a result of, you recognize, President Biden has referred to as it Putin – Putin’s value spike. However he is additionally blamed value inflation on company income. And I do know this irritates you.
DIMON: Yeah
MARGARET BRENNAN: You’ve got argued power prices should not excessive due to value gouging, however due to the dramatic decline in investments in power, which leads to lowered provide when demand goes up. So if that is true, what’s it going to take to extend lending to corporations to allow them to make these investments?
DIMON: Yeah
MARGARET BRENNAN: is that the choke level?
DIMON: Yeah, that is it is slightly extra difficult now as a result of a part of it’s that corporations do not wish to do it.
MARGARET BRENNAN: Why?
DIMON: Nicely, half, a part of that, however when individuals speak about excise revenue tax. That is one, they can not get permits executed, they can not get leasing and stuff like that. And a part of is their traders are placing plenty of stress on them, you recognize, that –
MARGARET BRENNAN: To go inexperienced?
DIMON: To go inexperienced, however to not make investments an excessive amount of capital, the place you are not making a revenue with oil at a excessive value. , it is not sufficient. Like that. And so, so it’s that so there are suppose of- It is a international drawback, America produces 10 million barrels a day, the world consumes 100 million. And so, and the opposite factor we’ve got to recollect about oil, which is absolutely necessary, that it goes up and down for one million completely different causes. And other people have a tendency to have a look at one motive and say that is it. However proper now, it is come down significantly, principally as a result of China’s slowdown, and Europe’s going into recession. After which individuals suppose there may be a world recession. So the long run value of oil goes down. These issues will reverse. And this underinvestment in oil and fuel it would damage you two or three years out. It is fairly predictable, however it’s not right now. And so we’ve got time, you recognize, I am hoping the administration, you recognize, they’re taking a look at all these points. I’ve spoken to John Podesta who now runs the the IRA act about what we will do to speed up, cut back CO2, however have higher, cheaper, safer power, not only for us, however for explicit allies around the globe.
MARGARET BRENNAN: So America set for report oil manufacturing in 2023. Nevertheless it’s just like the refinery capability turning into one thing usable, the place that is form of a choke level. So is the administration making it tough for that particular form of funding?
DIMON: I believe you’d have to speak to the oil, the oil of us about that.
MARGARET BRENNAN: Okay.
DIMON: Look, this world is absolutely advanced. I imply, if you do not have the pipelines, you may’t have the refinery. If you cannot do that, you may’t try this. If you do not have the charging stations, you may’t do that. In case you construct EV automobiles, however it’s nonetheless coal, coal powered electrical energy, you are not engaging in CO2. So I believe I simply suppose, We have to actually take a look at this intimately. And hopefully plenty of sensible individuals engaged on it. I believe it is necessary. We’re spending plenty of time on it, due to how important power is to the world. And bear in mind, it is 40% of meals costs, too. So, so this isn’t a easy matter. And it is, you recognize, for meals costs, the query is hunger.
MARGARET BRENNAN: Proper
DIMON: So this is not a query of how far you may drive your automotive, how a lot your fuel prices? So I put this complete, I believe we have to name a Marshall Plan for power, you recognize, and that is received to be all of the above, and all of the individuals concerned.
MARGARET BRENNAN: However the IRA, you confer with the Inflation Discount Act, that is only a sliver of what you are imagining for a Marshall Plan of Power.
DIMON: And that’s, that may be a big I imply, we’re nonetheless learning each piece of it for renewables and EVs and plenty of various things. Nevertheless it’s not simply that. It is the infrastructure we’re constructing. It is- it is competitors around the globe, it is entry to uncommon earths. I imply, once you dig into it as a extremely advanced factor.
MARGARET BRENNAN: These are the substances wanted for electrical vehicles-
DIMON: Precisely
MARGARET BRENNAN: that China has a monopoly on proper now,
DIMON: They’ve a monopoly in manufacturing, not on the place it’s. So we’ve got uncommon earths in America
MARGARET BRENNAN: Proper
DIMON: whether or not we will produce them right here or not, due to sure legal guidelines and necessities, that is a unique problem. We have to construct grids, you recognize, we do not get permissions to- permits to build- construct grids. So, you recognize, one of many offers that was executed between the president and Joe Manchin was the allowing invoice, that allowing invoice is for pipelines, we have to get fuel to Louisiana, to get that get Louisiana fuel to Europe to assist our allies and cut back the prices there. That additionally reduces their coal utilization. So it is very inexperienced, when you take a look at on the margin. And so it gets- it will get very difficult, and we simply must do the work.
MARGARET BRENNAN: How would you- I imply, I bear in mind masking monetary disaster and all this and the frustration between Wall Road and Washington that they only form of spoke previous one another on a regular basis. The place do you place that dialog now? Are individuals right here listening to what you are attempting to elucidate by way of market dynamics and funding?
DIMON: So I believe it is typically justifiable when individuals discuss throughout one another as a result of harm was executed, there was harm executed within the monetary disaster, not all the massive banks would have failed. And never everyone seems to be equally responsible and all that, however, after which, after all, issues, individuals have easy political slogans-
MARGARET BRENNAN: Proper
DIMON: that you recognize, get elected or one thing. However I believe there’s plenty of discuss, we discuss on a regular basis to the Biden administration and a number of ranges. And we should always, you recognize, I will assist any president to attempt to do the very best job for America. And people conversations are fairly intense. So Peter talks to them, I talked to them, they arrive to the BRT, which you noticed part of. And so it is essential, we do it. And you may be you are not all the time going to get your approach. And there is going to be disagreements, however that is okay, too.
MARGARET BRENNAN: Yeah. And I do know you communicate, you communicate plainly, which you might be recognized for doing. I wish to ask you about China. It appears like they’re loosening a few of their COVID restrictions, perhaps transferring away from COVID Zero. How do you see this impacting within the lengthy and quick time period?
DIMON: So my very own view, and once more, they they form of have to do this. You see the political unrest, and also you additionally see the harm doing to their economic system. So they might – they introduced like yesterday – ten various things. It sounds good- I simply learn them fast this morning. They sound good to me. I believe they wish to get their economic system going. Once more, that is a operate of capital, COVID, legal guidelines, commerce and issues like that. They usually’ve simply began to have actual conversations, or they stated they are going to with the Biden administration. An important factor about China in America, we really discuss that we really get engaged at an in depth degree of what we agree the place we disagree, and attempt to resolve these items and in addition work on a few of the issues we received to do collectively local weather, terrorism, nuclear proliferation, bioterrorism, and it is in all our pursuits to repair these issues. And you’ll’t do with out America in China.
MARGARET BRENNAN: As a result of it is not simply the second largest economic system on the earth. Our nations are extremely intertwined.
DIMON: They’re extremely intertwined. However you, what you actually need is American management to do that. And to convey our allies in. If we do regulate bilaterally, it won’t work, if we- as a result of the Chinese language will go negotiate separate higher offers with you recognize, God is aware of what number of completely different nations so we have to do it form of together with allies.
MARGARET BRENNAN: So the US and China are in direct competitors and the possibilities of battle are arising on the nationwide safety entrance. The previous Goldman Sachs CEO and Treasury Secretary Hank Paulson. I do know you recognize him, has warned the 2 economies are simply too intertwined to separate at this level. How do you consider that, and the elevated dialog about looking for separate provide chains and weaning ourselves off of, of low cost Chinese language manufacturing.
DIMON: So primary, I am a patriot. And nationwide safety is paramount, completely nationwide safety, American nationwide safety, I will go away Taiwan apart, I will go away that to the consultants and that form of factor. After which most significantly, for the American public, we’ve got essentially the most affluent form of the world’s ever seen. If we open our doorways to individuals, hundreds of thousands, billions of individuals come right here, we’ve got the very best innovation, we have got meals, water and power, we’re in extraordinary good condition. And we should not be shy about that or afraid or panicked or something like that.
DIMON: What we want is hard negotiations. And you’ve got already missed on nationwide safety, that is going to be about semiconductors, uncommon earth, penicillins. , that is, that is a unilateral. The Chinese language try this, we do it. Most companies help it, that will get very difficult into an export controls and funding controls. However mainly, the federal government’s working with individuals like us, plenty of different companies- however how do you implement one thing like that, that is that that’s good for nationwide safety, however does not diminish American enterprise doing nicely abroad.
MARGARET BRENNAN: Precisely.
DIMON: As a result of it might try this. And once more, it will get very particular. The opposite two commerce issues should not as necessary okay. One is, you recognize, each firm needs to have a dependable, safe line, you recognize, provide chain, some individuals already transferring their stuff, you may transfer some stuff to Mexico, you may transfer it to India, and many others. In order that’s already going down. After which the third one is known as is how all of us take a look at competitors, unfair competitors, state managed competitors. And once more, that additionally must be executed with allies. As a result of, you recognize, if I used to be simply throughout Latin America, they usually say to me, Hey, you recognize, we really love America. However China’s right here with cash, know-how, they’re making a less expensive, and what’s my different, People received to have options. A few of that may transform that we want higher growth, finance, higher diplomacy, we want higher guidelines round how banks or corporations might go down and put money into overseas nations to do issues that make sense. So it is complete, the federal government’s absolutely conscious of it, it is doable, it may take work and take time.
MARGARET BRENNAN: However, you are simply saying the State Division and people different kind of softer bits of diplomacy should be beefed up.
DIMON: Instantly.
MARGARET BRENNAN: Instantly.
DIMON: Instantly, and diplomacy, I say growth finance–
MARGARET BRENNAN: Proper.
DIMON: As a result of, you recognize, if the Chinese language are gonna go there and construct a bridge or construct a plant or purchase the lithium mine. And also you’re gonna have American corporations who would, might however do not for an entire bunch of various causes, you must ask the query why. And I do not wish to undergo all of the completely different causes. However there are causes American corporations do not go to sure nations. And so we- It might all be executed. And I believe, you recognize, we’re rolling up our sleeves. It ought to by no means have gotten this far, it did. I do not wish to cry over spilled milk. However, and the opposite factor too, bear in mind is, America might do plenty of issues unilaterally. –
MARGARET BRENNAN: Like what?
DIMON: Nicely, if we don’t- if we do not suppose they’re being truthful on X, you recognize, we- consider it as commerce. If I can not promote there, you may promote right here, if I can not put money into 100% [unintelligible] you may’t put money into 100% there. There is a reciprocal conduct–
MARGARET BRENNAN: So does tariffs keep on?
DIMON: , I look, I believe, I believe it was the fitting factor to concentrate on China years in the past. I believe that was the improper method to go about it. However they don’t seem to be going to return down till it is negotiated as a part of one thing else. Do not (crosstalk), perhaps areas which ought to come down immediately, simply to assist sure producers and sure customers.
MARGARET BRENNAN: You referenced a few of the home–
DIMON: We like we’ve got to return to love TPP, we’ve got to cease fascinated by commerce–
MARGARET BRENNAN: free commerce inside Asia–
DIMON: Negotiated commerce. I imply, clearly, we should not signal the deal that is not within the curiosity United States of America. However consider it–
MARGARET BRENNAN: However nobody goes again to TPP.
DIMON: No, however we’re making a mistake–
MARGARET BRENNAN: –it was politically poisonous.
DIMON: I do know. However I do not know what meaning. As a result of we’ve got a commerce coverage with Asia, it is functioning right now, make it higher. The notion that claims we’re not gonna have a commerce deal is a mistake, as a result of we’ve got one right now, that one would have been higher. And we simply received to alter how we- and there is additionally strategic- on this case it is also geopolitically strategic. Consider actual politic right here, this might have been higher, an American and Asia buying and selling system that’s arrange the fitting approach that we expect has the fitting guidelines, necessities, legal guidelines, governance, and many others. After which China could possibly be invited in. It is not in opposition to China.
MARGARET BRENNAN: Nicely, once you speak about and also you reference their funding in semiconductors, right here, electrical automobiles, that form of factor, that is a part of the Biden administration’s home financial revitalization, however it’s nationwide safety coverage as nicely.
DIMON: Yeah, it is slightly each, we form of combined them up, mix-and-match them slightly bit.
MARGARET BRENNAN: Precisely. However there are some critics who say that that is inflicting slightly little bit of market distortion there.
DIMON: It does, I believe, look, you recognize, these things will get difficult and bear in mind it will get written by Congress and–
MARGARET BRENNAN: Proper.
DIMON: –so the physique is fairly good. Nevertheless it has actually irritated the Europeans, as a result of it is purchase America construct America, it is an enormous drawback for you recognize, part of the world we want actually excellent relations with. When when individuals complain, the very first thing you all the time do is to say, ‘have been they proper?’ They usually’re proper about a few of it, not all of it. And you recognize, the President did say we will tweak and modify it and–
MARGARET BRENNAN: The electrical automobiles and issues like that–
DIMON: –and I believe that may be executed. However here is the actually necessary a part of this. It is not simply that. If Europe goes its personal approach and commerce they usually stated they’re gonna do their very own IRA invoice. Both their very own commerce bloc purchase America- purchase Europe construct Europe, that may be very dangerous for the worldwide negotiates of commerce. That may be very dangerous for nationwide safety. That may be very dangerous for the following century of America. And that is why I believe this – is a it does not sound like it’s. Nevertheless it’s completely important for nationwide safety, we get this one, proper.
MARGARET BRENNAN: I am under no circumstances disagreeing with you. I wish to ask you, although about like, the way in which overseas coverage is exercised proper now. With Russia, for instance, it was monetary warfare at first. Yeah, that is the direct hit the USA is taking over Russia. And I ponder the way you suppose that was dealt with?
DIMON: I believed it was dealt with extraordinarily nicely, really, I believe there have been events the place we overdid our monetary sanctions and utilizing it since you do not wish to say I do not wish to do enterprise with American banks, or American entities or stuff like that. It has been slightly misuse, however there are occasions it is correctly used. So here is each the Europeans and the American authorities, you recognize, the Treasury Division right here, who stated, this can be a method to a part of our large geopolitical conflict, serving to Ukraine. They usually have been proper. And it was each sanctions and export controls and issues like that. And I believe they did it the fitting approach. There’s fixed communication. I imply, if I say commun- like daily about the way you effectuate these items, and which of them work and which of them do not work, and the way Swift was going to work, and all these varied issues, however Nevertheless it’s been fairly good. I believe they have been very a lot proper to do it on this case.
MARGARET BRENNAN: However you could not do that with China, might you as a result of the economies are too intertwined.
DIMON: You could not nicely, you when you needed to you would, however that might, that is an entire, the financial impact in China and the world could be dramatically worse, nobody would profit from that. And by no matter it’s, it’d most likely be worse for China than for us. As a result of like I stated, we’ve got all of the meals, water and power we want. Now we have peace in North America right here. China, the American public might not know, China imports 11 million barrels of oil a day. They are not sitting there saying how snug they’re. They’re sitting there saying how susceptible they may be. So you bought to, if you are going to take a look at China, take a look at the entire thing. Take a deep breath, and determine what’s in our pursuits after which go negotiate. And like I stated, plenty of it may be executed unilaterally, it must be executed multilaterally, like with our allies.
MARGARET BRENNAN: You had stated on this nation, you have been comfortable concerning the midterm outcomes. I imply, the previous adage was like gridlock is sweet for Wall Road. However once you’re speaking about very massive challenges to the nation, which might be left unaddressed, that appears to be a threat.
DIMON: I did not. I did not say something about gridlock.
MARGARET BRENNAN: No, I am saying that.
DIMON: (Crosstalk) I believed it–
MARGARET BRENNAN: Is not that what we’ll get with a break up Congress–
JAMIE DIMON: –I believed the election was good. As a result of on each events the form of the- the wing nuts did not get elected. And there, so the rational factor, once I was simply in Congress, I used to be gratified by their thought they wish to make progress. And I believe they’ll make progress. There are plenty of examples in historical past, underneath George W. Bush, Obama, Clinton, the place when he had divided Congress really received plenty of good issues executed–
(Crosstalk)
MARGARET BRENNAN: However you’ve got received actually skinny margins–
JAMIE DIMON: –and I would favor to see collaboration and getting great things executed. And so I believe–
MARGARET BRENNAN: You are staying optimistic about that.
DIMON: Yeah, I believe there is a good probability they may get some good issues executed.
MARGARET BRENNAN: So so we’re days away from this authorities funding deadline. And Congress is gonna need to go the invoice to keep away from a shutdown. As a threat supervisor, the place do you place the danger degree right here?
DIMON: Nicely funding is completely different than debt ceiling.
MARGARET BRENNAN: I do know.
DIMON: Okay.
MARGARET BRENNAN: However the threat is as soon as energy shifts come January that it might turn out to be an even bigger drawback.
DIMON: (Crosstalk) Yeah, I might say authorities funding isn’t the way in which to–
MARGARET BRENNAN: Could possibly be used as leverage.
DIMON: It is not the way in which to run a railroad. I imply, mainly you find yourself spending rather more cash too as a result of the American public might not know, you pay individuals and the you pay them extra to return again to work. It prices us rather more cash. So even if you wish to be fiscally accountable isn’t a good suggestion. The debt ceiling is, you speak about, June of subsequent yr, and we’ll cope with that later.
MARGARET BRENNAN: Proper. Nicely, there’s some debate about whether or not it must be executed now in these previous couple of weeks whereas Democrats nonetheless have management to keep away from that form of showdown.
DIMON: As they need to as a result of the catastrophic results of an- of an precise default, not the debates I perceive either side why we wish it, how they wish to use it’s, that is catastrophic, or doubtlessly catastrophic. I might by no means take that threat. So for me, sure, I might get it executed now. Take- take it off the desk.
MARGARET BRENNAN: So that you stated again in 2019, on CNBC, my coronary heart is Democratic, however my mind is form of Republican. The world’s modified quite a bit since 2019. I ponder what what you might be pondering proper now.
DIMON: I am form of in the identical place. And I look, I believe we’re our brother’s keeper, we handle ourselves. We do neighborhood branches, and I need my workers to really feel nice, and I need clients to be comfortable. And I simply suppose we want rational coverage, you recognize, actually rational coverage and that plenty of that coverage isn’t Democrat or Republican. Getting correct infrastructure constructed isn’t Democrat or Republican. We must always all acknowledge that internal metropolis colleges do not work notably nicely, in plenty of areas. Half the youngsters do not graduate. That is not Democrat or Republican. That is acknowledging the issue. After which speaking about options. Well being care, we’ve got the very best on the earth. Hell, I am a beneficiary of it. However we even have a few of the worst. Belief- virtually 20% of GDP, 50 million individuals uninsured, big weight problems, hypertension, things- plenty of issues that are fixable, and I can go on and on and we want good coverage. , good. And no coverage is usually dangerous coverage.
MARGARET BRENNAN: You referenced, you are the beneficiary of the well being system. You had this close to demise expertise.
DIMON: Yep.
MARGARET BRENNAN: How has that modified the way you view your work proper now? And I ponder if it is modified whether or not you could have any want to enter authorities.
DIMON: Now I am- I do not play golf. , it is I mainly, I nonetheless love what I do. I like serving to individuals. I like the individuals right here. I’ve, I am so happy with them typically. And in order that hasn’t modified my view, I am I wish to do issues. I am all the time going to do one thing. I am not going to go scent the flowers and stuff like that. I am unsure certain. I am suited to authorities. I wish to assist my nation. I will do something I will help my nation.
MARGARET BRENNAN: And it sounds such as you’ve received plenty of concepts to do this.
DIMON: And we’ve got plenty of concepts.
