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Saturday, May 21, 2011
Jamie Dimon breaks it down
Here is an article covering a speech made by Jamie Dimon, JPMorgan CEO, in Denver this past Thursday. He makes some very strong points, from a Wall Street point of view. The article touches on a lot of what we have been discussing in and out of class about the effects of reaching the debt ceiling. As one might expect, he is terrified of a default. But, as a Wall Street banker, is he just looking out for his profits or is he truly concerned that defaulting would have real large consequences?
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Interesting article, Dane. I don't want to say that Mr. Dimon isn't genuinely concerned about the threat of a U.S. default and its consequences, but there is a clear and unsurprising tone of self interest in his speech. When talking about his own company, the article references him speaking as though change must happen or not only his company but the U.S. will be in trouble: "U.S. tax rates on corporate profits make the country uncompetitive with other nations of the world, driving capital and jobs overseas, he said." But when he speaks about consumers he uses a much less pressing tone: "...although he acknowledged that consumer lending, especially mortgage lending, is lagging. But the United States has been through far worse. “We’re going to be fine,” Dimon said." It seems like when it comes to consumers, things will get better or things will work out. But when it comes to his business and his company, he wants guaranteed change now. He uses language that portrays consequences for the entire U.S. if those changes don't take place. I'm not sure how valid his points are, but in my mind he clearly has some self interest at play here.
ReplyDeleteI like the comment by Dimon that "Bank capital requirements on U.S. banks are out of sync with the requirements on foreign banks, and that’s hurting the ability of U.S. institutions to compete"... He makes a good point that the United States regulations need to be inline with foreign competitors in a globalized market if the U.S wishes to compete effectively.
ReplyDeleteI can't decided if her is self interested or not. I think that he does speak truth and the point about being a global power and breaking our image down is very interesting. He could be saying we need to get over it so that the banks stay the same but also we are creating our own crises by hurting consumer confidence and sowing seeds of distrust. I think though his end points about improving education and immigration policy are right on though. I think that shows levels of improving society as whole.
ReplyDeleteI don't know though about whether he is self interested or not. He sounds sincere though.
The Jamie Dimon article does hit on some of the main points we talked about in class, referring to the debt ceiling.
ReplyDeleteWhile Dimon may be taking more of a devil's advocate role, he does bring up many legitimate concerns facing our economy and the debt ceiling.
I agree with Beth, it seems like there is some PR messages in his speech. I would have liked more details on how Congress "should deal with the half of it now".
ReplyDeleteIs it just me or does 100 billion in taxes in the last 10 years not seem like that much for a huge investment bank? I just keep thinking about all the tax write-offs they've been given and all the billions of dollars that have gone to the management and shareholders. Maybe I'm just being skeptical but I think this guy is a little too smart... I dont know...
ReplyDeleteDoesn't capitalism allow our citizens to act in their own self interest and in the case of business doesn't that mean doing what's necessary to maximize profits for your own company? With that being said I completely understand why Jamie Dimon would act in his own self interest. At the same time I think he brings up a lot of very good points about consequences on the entire country if these changes don't take place.
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