- Jamie Dimon warned the S&P 500 could slump another 20%, and predicted a US recession within a year.
- JPMorgan’s CEO criticised US energy policy and raised alarm about Russia’s invasion in Ukraine.
- Dimon welcomed Elon Musk’s Twitter buyout and noted some signs of strain in markets.
Jamie Dimon BewareThe US stock market could plummet another 20%, according to predictions of a recession in the next year. BemoanedAmerica’s recent failure to boost oil-and-gas output in recent months.
JPMorgan’s billionaire CEO sounded the alarm over the Russia-Ukraine crisis, flagged early signs in financial markets distress and welcomed Elon Musk’s Twitter Takeover. Interview with CNBCTuesday
These are Dimon’s top 12 quotes, with some light editing for clarity and length.
1. “This is serious stuff. Inflation, higher rates than expected, probably more, quantitative tightening that we have never experienced before, and war. These are very serious factors that could push the US into a recession six to nine months from now.
2. It may still be a long way to go. It could be another easy 20 percent. Because people aren’t used to it, the next 20% will be more painful than previous ones. Rates going up 100 basis points more will be more painful than those already increasing by 20 percent. (Dimon was discussing how much lower the S&P 500 could fall after dropping 25% already this year.)
3. “Tech valuations will naturally fall. Rates rise, and the present value of the first ten years of something is much higher than before. Therefore, anything that has a payout that’s not yet there will have less value. (Dimon was pointing out why tech stocks are affected by higher interest rates.
4. “It wasn’t quite like that. I think that was a bit of a frenzy. It will, but it could be another 15 or 20 more years. Bubbles will return. (Dimon was asked if stocks would return to their peak valuations during the pandemic.
5. “Volatility is the only guarantee. Markets have already been quite volatile, but they’re still relatively orderly. You might see markets becoming disorderly in the near future.
6. “You can see the early signs of distress. A lot of markets are experiencing liquidity problems. Credit markets are where you will likely see more cracks and perhaps a bit more panic. I’d be cautious if I were out there. If you need money, go raise it.”
7. “There is too much reliance on central bankers to save the day when something goes wrong. I don’t believe we should place central banks in a situation where they must do something every time there is a market fluctuation. They shouldn’t have to solve every problem.
8. “This was the result of a massive amount of fiscal stimulation and quantitative easing. This is a level that has never been seen anywhere else on the planet except during World War II. We’ll get there, one way or the other. (Dimon was questioned if inflation would eventually slow down to the Fed’s target rate of 2.2% per annum.
9. “We are getting energy wrong. America should have been producing more oil and natural gas. The world isn’t producing enough oil and natural gas to meet its long-term needs. This will lead to a reduction in coal use, a transition to cleaner energy and security for all. This would fall under the critical category. This should be considered almost a matter for war, and nothing less.
10. “It’s an infamy day. It’s Pearl Harbor. But it’s Czechoslovakia. This is a direct attack on the Western World. It’s a terrible war that is roiling all the markets and changing everybody’s minds about national security in everything, be it food, energy or technology. (Dimon was referring to the larger effects of Russian President Vladimir Putin’s ongoing invasion in Ukraine.
11. “Nuclear proliferation remains the greatest threat to humanity. It’ll be due to nuclear proliferation if we don’t get here in 200years. Putin taught the world that a nuclear weapon grants you authority to bully any neighbor.
12. “I hope Elon cleans Twitter. He’s smart and I enjoy reading his work. I wish him well. (Dimon was critical of the amount of automated and fake accounts on Twitter and demanded that users have more control over how their timelines are arranged.
