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U.S. should pump more oil to avert war-level energy crisis: JPMorgan’s Jamie Dimon
Dimon said in June that he was preparing the bank for an economic “hurricane” caused by the Federal Reserve and Russia’s war in Ukraine.
Al Drago | Bloomberg | Getty Images
JPMorgan Chase CEO Jamie Dimon said Monday that the U.S. should forge ahead in pumping more oil and gas to help alleviate the global energy crisis, likening the situation to a national security risk of war-level proportions.
Speaking to CNBC, Dimon dubbed the crisis “pretty predictable” — occurring as it has from Europe’s historic overdependence on Russian energy — and urged Western allies to support the U.S. in taking a lead role in international energy security.
“In my view, America should have been pumping more oil and gas and it should have been supported,” Dimon told CNBC’s Julianna Tatelbaum at the JPM Techstars conference in London.
“America needs to play a real leadership role. America is the swing producer, not Saudi Arabia. We should have gotten that right starting in March,” he continued, referring to the onset of the energy crisis following Russia’s invasion of Ukraine on Feb. 24.
This should be treated almost as a matter of war at this point, nothing short of that.
Jamie Dimon
CEO, JPMorgan Chase
Europe — once a major importer of Russian energy, relying on the country for up to 45% of its natural gas needs — has been at the forefront of that crisis; facing higher prices and dwindling supply as a result of sanctions levied against the Kremlin.
And while EU nations have hit targets to shore up gas supplies over the coming winter months, Dimon said leaders should now be looking ahead to future energy security concerns.
“We have a longer-term problem now, which is the world is not producing enough oil and gas to reduce coal, make the transition [to green energy], produce security for people,” he said.
“I would put it in the critical category. This should be treated almost as a matter of war at this point, nothing short of that,” he added.
‘It’s Pearl Harbor’
Referring to the war in Ukraine more broadly, Dimon dubbed it an attack of similar magnitude to that of Pearl Harbor or the invasion of Czechoslovakia in 1968.
“It’s Pearl Harbor, it’s Czechoslovakia, and it’s really an attack on the Western world,” he said.
However, the CEO said it also presented an opportunity for the West to “get its act together” and defend its values in the face of autocratic regimes.
“The autocratic world thinks that the Western world is a little lazy and incompetent — and there’s a little bit of truth to that,” said Dimon.
“This is the chance to get our act together and to solidify the Western, free, democratic, capitalist, free people, free movements, freedom of speech, free religion for the next century,” he continued.
“Because if we don’t get this one right, that kind of chaos you can see around the world for the next 50 years.”
JPMorgan’s Dimon warns of possible $1 billion Russia loss
JP Morgan CEO Jamie Dimon looks on during the inauguration the new French headquarters of JP Morgan bank in Paris, France June 29, 2021. Michel Euler/Pool via REUTERS
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NEW YORK, April 4 (Reuters) – JPMorgan (JPM.N) could lose about $1 billion on its Russia exposure, Chief Executive Jamie Dimon said on Monday, detailing the extent of the bank’s potential losses from the conflict in Ukraine for the first time.
In his keenly watched annual letter to shareholders, the chairman and chief executive of the biggest U.S. bank by assets also urged the United States to increase its military presence in Europe and reiterated a call for it to develop a plan to ensure energy security for itself and its allies.
Dimon did not provide a time frame for JPMorgan’s potential Russia losses but said the bank was concerned about the secondary impact of Russia’s invasion of Ukraine on companies and countries. Russia calls its actions a “special operation.”
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Global banks have detailed their exposure to Russia in recent weeks but Dimon is the most high-profile world business leader yet to comment on the broader impact of the conflict.
“America must be ready for the possibility of an extended war in Ukraine with unpredictable outcomes. We should prepare for the worst and hope for the best,” he wrote. (For five key takeaways from Dimon’s letter, click on read more )
Dimon may continue as chairman when he eventually relinquishes his role as chief executive, the bank said Monday.
The disclosure, in a report to shareholders ahead of JPMorgan’s annual meeting in May, said the bank had found that most major shareholders want Dimon to remain chairman.
The board also said that it was inclined as a “general policy” to separate the jobs of chairman and chief executive after Dimon is gone. Many shareholders have a general preference to separate the posts, it said.
Dimon has made something of a joke of perpetually saying he will resign in five years. In 2019, he said the five-year clock had actually begun.
In his letter to shareholders, Dimon addressed the relationship between the United States and China and said the United States should revamp its supply chain to restrict its scope to suppliers within the United States or to only include “completely friendly allies”. He urged the United States to rejoin the Trans-Pacific Partnership (TPP), one of the world’s biggest multinational trade deals.
Commenting on the macroeconomic environment, Dimon said the number of Federal Reserve interest rate hikes “could be significantly higher than the market expects.” He also detailed the bank’s rising expenses, in part due to technology investments and acquisition costs.
The letter is Dimon’s 17th as CEO. While Dimon is not the only CEO of a top U.S. bank to write such letters, his have become must-reads among Wall Street’s elite and policymakers for the view they provide into his political and economic ideas.
‘FORTRESS BALANCE SHEET’
This year’s letter comes as the Russia-Ukraine war and high inflation are hurting the economy, and as Dimon faces new skepticism from investors over expenses.
Some question his plans to increase spending on the bank’s information technology and campaigns to take market share in businesses and geographies where JPMorgan currently trails competitors, such as in Germany and the United Kingdom.
JPMorgan decided earlier this year to hold its first investor day since the pandemic began to address doubts about its spending plans. The meeting will be held on May 23.
Dimon has spent more than a decade building what he calls the bank’s “fortress balance sheet,” and he said it is now robust enough that JPMorgan could withstand losses of $10 billion or more and “still be in very good shape.”
While Dimon wrote that he is not worried about the bank’s exposure to Russia, he said the war in Ukraine will slow the global economy and will impact geopolitics for decades.
“We are facing challenges at every turn: a pandemic, unprecedented government actions, a strong recovery after a sharp and deep global recession, a highly polarized U.S. election, mounting inflation, a war in Ukraine and dramatic economic sanctions against Russia,” he said.
On acquisitions, Dimon said that the bank will be reducing stock buybacks over the next year to meet capital increases required by federal rules “and because we have made some good acquisitions that we believe will enhance the future of our company.”
JPMorgan has been on a buying spree, spending nearly $5 billion on acquisitions over the past 18 months. Dimon said that will increase “incremental investment expenses” by roughly $700 million this year.
Investments in technology will add $2 billion to expenses this year, Dimon said.
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Additional reporting by David Henry; Editing by Michelle Price, Muralikumar Anantharaman and Nick Zieminski
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JPMorgan’s Dimon blasts bitcoin as ‘worthless’, due for regulation
NEW YORK, Oct 11 (Reuters) – Jamie Dimon, JPMorgan Chase & Co (JPM.N) chief executive, said on Monday at a conference that cryptocurrencies will be regulated by governments and that he personally thinks bitcoin is “worthless.”
“No matter what anyone thinks about it, government is going to regulate it. They are going to regulate it for (anti-money laundering) purposes, for (Bank Secrecy Act) purposes, for tax,” Dimon said, referring to banking regulations in a conversation held virtually by the Institute of International Finance.
Dimon, head of the largest U.S. bank, has been a vocal critic of the digital currency, once calling it a fraud and then later saying he regretted the statement.
This summer, JPMorgan gave wealth management clients access to cryptocurrency funds, meaning the bank’s financial advisers can accept buy and sell orders from clients for five cryptocurrency products.
A representation of the virtual cryptocurrency Bitcoin is seen in this picture illustration taken June 7, 2021. REUTERS/Edgar Su/Illustration
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Stating that his views are different from those of the bank and its board, Dimon said he remains skeptical.
“I personally think that bitcoin is worthless,” Dimon said. “I don’t think you should smoke cigarettes either.”
“Our clients are adults. They disagree. If they want to have access to buy or sell bitcoin – we can’t custody it – but we can give them legitimate, as clean as possible access.”
Bitcoin trading showed no immediate reaction to Dimon’s comments. The cryptocurrency was last up 5% for the day at $57,304.
Reporting by Elizabeth Dilts Marshall and David Henry; Editing by Steve Orlofsky
Our Standards: The Thomson Reuters Trust Principles.