Jamie Dimon Outlines 2009 Concerns (JPM)
Money_stack_pic Jamie Dimon, CEO & Chairman of JPMorgan Chase & Co. (NYSE: JPM), gave an exclusive interview to Erin Burnett on CNBC today at 2:00 PM. This was much more detailed than the few comments here, but Jamie Dimon gave some interesting data on his outlook for what lies ahead in the banking sector and for his bank as well.
There is a reason that Dimon was on of 24/7 Wall St's CEO's Of The Year. First and foremost, he essentially said that the $25 billion handed to them under the first TARP funds was not his choice. As many have noted, this was forced upon.
For 2009, Dimon believes that the economy is going to be unemployment driven. He expects unemployment to drive commercial losses and consumer losses. He even noted that "if we are lucky" it would get worse for another two quarters and then start to see some improvements. But he did re-stress that that would be under the "lucky" case scenario.
Erin Burnett also pointed out how about 60% of re-worked mortgages are coming back into foreclosure. Dimon said he thinks that JPMorgan is only about half of that rate, or 30% so far.
Dimon already called for lower housing prices. He did say he thinks that it is possible that housing could go another 20% or 10% from today. But he did not know where that will really go.
On an Obama stimulus plan, Dimon wouldn't comment on the size. But whatever it is should be done soon and then we need to get the economy stable now. A massive tax cut should be in the toolkit, but only for the lower income people. On infrastructure, Dimon believes that infrastructure spending is needed but doesn't know how fast those projects can go. But no bridge to nowhere.
As far as a brokerage unit, Dimon did say that he would consider it but he does not consider a huge brokerage unit as mandatory with all the added expenses there. He said it is "not a strategic imperative" for the company. He also does not believe that it makes sense for two major investment banking forms to merge because of charges, client losses, and the layoffs.
2:42 PM UPDATE.........Erin Burnett also discussed the company's quarter and how that was shaping up. He did not give any specific numbers, but he said "November" was a terrible trading month in the usual suspects and said December was looking that way too. As he said before, he still expects loan losses to rise.