Getty/Win McNamee
- Jamie Dimon flagged a raft of risks facing the economy, from war to food and energy prices.
- The JPMorgan CEO warned a recession and more interest-rate hikes could strain the financial system.
- Dimon quoted Warren Buffett twice to flag the risks to banks and trumpet prudence in business.
Jamie Dimon has sounded the alarm on a slew of headwinds buffeting the global economy, and cautioned that a recession and further interest-rate hikes could deal heavy blows to some consumers and businesses.
The billionaire banker and JPMorgan CEO also championed prudent risk management, and warned that more lenders could run into problems like Silicon Valley Bank did this spring. He quoted Warren Buffett, a longtime business associate, to make both points.
Dimon spoke during a Barclays conference on Monday, according to a transcript provided by AlphaSense/Sentieo.
Here are Dimon's 8 best quotes, lightly edited for length and clarity:
1. "To say the consumer is strong today, meaning you are going to have a booming environment for years, is a huge mistake. The future has quantitative tightening. We've been spending money like drunken sailors around the world. This war in Ukraine is still going on. Those are really big buts."
2. "If rates go up, and things get more recessionary, you are going to see more people out there with problems. Part of that will be completely normal, part of that will be worse than normal because of the rate side. People are just not ready or used to 6.5% rates."
3. "If rates go up another 50 basis points, that will cause more issues with banks, more issues with real estate. If you have that with a recession, yes, you're going to see a little bit more stress and strain in the system."
4. "It's literally the extent of the fiscal deficit, the fact that we've never been through quantitative tightening before. There's a false sense of security that those two things will end up being okay. There are big, huge semi tectonic shifts that we've seen."
5. "Maybe they all resolve and sort themselves out, maybe they won't. It just puts me on heightened edge of caution." (Dimon's concerns include historic amounts of fiscal spending, war, and rising food and energy prices roiling the global economy.)
6. "That will be Warren Buffett's famous tide going out. There's going to be a lot of people swimming naked." (Dimon was referring to other banks getting caught out by rising interest rates like Silicon Valley Bank.)
7. "Warren Buffett always says — he's in the insurance business — sometimes you're better off taking your sales force and paying them to play golf, not to do any more underwriting. That happens in the loan business too. The way we've avoided a lot of problems is we got priced out, we wouldn't do them."
8. "My advice to a company: You can go public, you want to go public, you need to go public, don't wait too long. The uncertainties out in front of us are still very large and very dangerous."