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Dimon Will Survive, Lending Will Get Worse: Trump

Tuesday, 15 May 2012 | 8:49 AM ET

Banks are only lending money to those who don't need it, a trend that likely will be exacerbated by the recent JPMorgan Chase trading loss, real estate magnate Donald Trump said.

Chairman and President of the Trump Organization, Donald Trump, speaks to several GOP women's group at the Treasure Island Hotel & Casino April 28, 2011 in Las Vegas, Nevada.
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Chairman and President of the Trump Organization, Donald Trump, speaks to several GOP women's group at the Treasure Island Hotel & Casino April 28, 2011 in Las Vegas, Nevada.

While Trump believes JPMorgan CEO Jamie Dimon — "a good guy and a great banker" — will survive the $2 billion imbroglio, he also sees it adding to a suffocating regulatory environment.

"In theory we have tremendous regulation, probably more than any other country in the world as far as banking is concerned, and it didn't stop this kind of loss," Trump said during a "Squawk Box" interview on CNBC. "They've added to it and they've added to it in spades and you still have this. Now they're talking about making even more legislation. All that's going to do is stop people from making loans."

JPMorgan got into trouble when it revealed that it had lost at least $2 billion on a corporate debt hedging strategy that went awry.

For the Wall Street titan the timing couldn't have been worse — the company shareholders meeting starts Tuesday morning and Dimon is expected to face rigorous questioning.

"They are really going to go at him, there's no question about it. It's called life," Trump said. "When you're in business, whether it's banking or any other business, you make mistakes.

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"I can take the smartest person you have...and the most successful person in the last five years and I'll find plenty of mistakes they've made on the way up and in many cases on the way down. Every one of your great deal makers, including me, they make mistakes."

Dimon's reaction will be critical, Trump said, as will the reaction of Washington policymakers.

Trump said regulators have made it nearly impossible for entrepreneurs needing start-up cash to get loans. Recent loan officer surveys from the Federal Reserve indicate that lending conditions are gradually loosening, but Trump said the real-world story is different.

"If you have lots of money, the banks will give you any amount you need," he said. "If you're looking to start a business, believe me those poor guys, they can't get money no matter what they do."

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