WHEN: Today, Tuesday, August 8th
WHERE: CNBC's "Squawk Alley"
Following is the unofficial transcript of a CNBC EXCLUSIVE interview with JPMorgan Chase chairman & CEO Jamie Dimon on CNBC's "Squawk Alley" (M-F, 11AM-12PM ET) today, Tuesday, August 8th. Following is a link to a clip from the interview on CNBC.com: https://www.cnbc.com/video/2017/08/08/jamie-dimon-america-needs-to-acknowledge-our-problems-and-fix-them.html.
All references must be sourced to CNBC.
SARA EISEN: AND WITH THAT, WE'LL SEND IT OUT TO CHICAGO AND OUR OWN WILFORD FROST WITH A SPECIAL GUEST. WILF, TAKE IT AWAY.
WILFORD FROST: SARA THANK YOU VERY MUCH YES, INDEED, I'M JOINED BY THE CHAIRMAN AND CEO OF JPMORGAN CHASE, JAMIE DIMON. GOOD MORNING YOU TO.
JAMIE DIMON: HAPPY TO BE HERE, WILF.
FROST: GREAT TO HAVE YOU HERE. AND SPECIFICALLY IN CHICAGO. YOU SPENT SEVEN YEARS OF YOUR CAREER HERE. YOU HAPPY TO BE BACK?
DIMON: I AM. I LOVE CHICAGO. WE MOVED HERE -- I MOVED HERE TO BE CHAIRMAN AND CEO. THE WHOLE FAMILY MOVED THEY WENT TO SCHOOL HERE I THINK IT'S A WONDERFUL TOWN. THE PEOPLE ARE WONDERFUL THE RESTAURANTS ARE WONDERFUL. YOU WALKED AROUND LAST NIGHT I HOPE YOU ENJOYED IT QUITE A BIT.
FROST: I DID A VERY LIVELY ATMOSPHERE. IT'S GREAT TO BE HERE. LETS TALK ABOUT THE SPECIFIC REASON WHY WE ARE HERE SO PART OF JPMORGANS $350 MILLION COMMITMENT TO INVESTING IN SKILLS DEVELOPMENT YOURE INVESTING HALF A MILLION TODAY IN BRAZIER FOUNDATION ROBOTICS TRAINING FACILITY HERE SO WHY THAT INVESTMENT TODAY AND WHY THE BROADER $350 MILLION IN SKILLS DEVELOPMENT?
DIMON: SO I THINK IT IS ABSOLUTELY CRITICAL THAT THE BUSINESSES WORK TO CREATE JOBS AND CREATE A HEALTHY ENVIRONMENT. THAT'S WHAT A BANK DOES. INVESTING IN COMPANIES AND LOANS. SO IF YOU LOOK BACK HERE THIS PLACE IS TEACHING KIDS AS APPRENTICESHIPS, ELECTRICAL ROBOTIC, THESE MACHINES BACK HERE THEY GET OUT, THEYLL HAVE JOBS EARNING $45,000 TO $65,000 AS YOU SAID WE SPENT $250 MILLION AROUND THE WORLD DOING THIS AS PART OF A 5-10 YEAR EFFORT I THINK ITS CRITICAL TO DO WE HAVE TO PARTICIPATE AND, YOU KNOW, MAKE SOCIETY BETTER FOR PEOPLE.
FROST: YOU HAVE DONE A LOT OF THAT IN DETROIT AND NOW CHICAGO STILL THERE SEEMS TO BE IN THE WAY YOU FRAME THIS THERE IS A GAP YOU SAID AN OP-ED IN JUNE THAT ITS A MORAL AND ECONOMIC CRISIS THAT TOO MANY YOUNG PEOPLE LEAVE HIGH SCHOOL WITHOUT CLEAR PATHWAYS TO A SUCCESSFUL FUTURE. WHOS FAULT IS THAT? IS THAT THE FAULT OF THE U.S. GOVERNMENT?
DIMON: I DONT WANT TO BLAME ANY ONE PERSON. BUT HERE'S THE FACT HALF THE KIDS IN INNER CITY SCHOOLS DO NOT GRADUATE. I MEAN THAT IS A DISGRACE AND WE SHOULD ALL RAISE OUR HANDS AND RING THE ALARM BELL ABOUT THAT. A LOT OF KIDS THAT DO GRADUATE BOTH HIGH SCHOOLS OR VOCATIONAL SCHOOLS AND COMMUNITY COLLEGES, THEY SHOULD HAVE A LIVELIHOOD WHEN THEY GET OUT. THERE ARE TONS OF JOBS AVAILABLE, ROBOTICS, CODING, MEDICAL JOBS, CONSTRUCTION TYPE JOBS, AVIATION, AUTOMOTIVE WHERE THESE KIDS GET OUT AND HAVE APPRENTICESHIPS AND GET TRAINED AND GET CERTIFIED. GO ON TO COLLEGE AFTERWARDS IF THEY WANT AND GREAT JOBS YOU KNOW, WE AS A SOCIETY HAVE TO DO A BETTER JOB AMERICA USED TO DO THIS REALLY WELL AND WE DONT ANYMORE. WE HAVE TO GET BACK TO THE HABIT OF MAKING SURE KIDS GET OUT NOT JUST LEARNING ABOUT LIFE BUT WITH A LIVELIHOOD.
FROST: YOURE SAYING AMERICA DOESNT DO ENOUGH OF THIS TODAY ON YOUR RECENT Q-2 EARNINGS CALL YOU DID SPEAK ABOUT WASHINGTON AND THE GRIDLOCK THERE SO MUCH SO YOU SAID, "IT'S ALMOST AN EMBARRASSMENT TO BE AN AMERICAN." WHAT DID YOU MEAN BY THAT? WHAT IS EMBARRASSING?
DIMON: FIRST OF ALL, IM VERY PROUD OF AMERICA WHAT'S EMBARRASSING TO ME IS OUR INABILITY TO GET INSFRASTRUCTURE DONE PROPERLY. WE HAVEN'T BUILT A MAJOR AIRPORT HUB IN OVER 20 YEARS. THE LAST ONE WAS DENVER. CHINA HAS DONE 75 IN THE LAST TEN YEARS. I JUST MENTIONED EDUCATION WE DON'T HAVE A COMPETITIVE TAX SYSTEM HERE. I TRAVEL AROUND THE WORLD AND YOU MEET PRESIDENTS AND PRIME MINISTERS, EVERYONE KNOWS THAT THEY NEED A HEALTHY BUSINESS ENVIRONMENT TO CREATE JOBS AND WAGES AND TO HAVE A HEALTHY BUSINESS ENVIRONMENT, YOU NEED A COMPETITIVE TAX SYSTEM OUR TAXES BECOMING LESS COMPETITIVE OVER THE LAST 20 YEARS. EVERYONE IMPROVED THEIRS WE SIMPLY HAVENT. I CAN GO ON AND ON I THINK WE NEED TO ACKNOWLEDGE -- AMERICA IS THE BEST COUNTRY IN THE PLANET IM A COMPLETE PATRIOT THERE IS NOTHING LIKE THIS COUNTRY IT IS THE SHINING CITY IN THE HILL BUT WE SHOULD ACKNOWLEDGE OUR PROBLEMS AND FIX THEM. BECAUSE THE LACK OF FIXING THEM IS ACTUALLY HURT AVERAGE AMERICANS JOBS, WAGES AND CAUSED A LOT OF THE TURMOIL WE HAVE IN SOCIETY TODAY.
FROST: YOU MENTIONED TAX REFORM THERE. AND LOTS OF HOPE INITIALLY WHEN TRUMP WAS ELECTED THAT THAT WOULD GET DELIVERED. DO YOU THINK IT DOES GET DELIVERED ON DURING HIS FIRST TERM IN OFFICE.
DIMON: YOU KNOW, I DONT KNOW. LOOK, I'M -- I HOPE SO AND I'M STILL GOING TO WORK TOWARDS THAT EFFORT. IT IS JUST CRITICAL WE DO IT I BECAME THE CHAIRMAN OF THE BRT, 200 MAJOR COMPANIES BUSINESS ROUNDTABLE. THESE COMPANIES EMPLOY 15 MILLION PEOPLE. THEY DO A LOT OF THE CAPITAL EXPENDITURES INDIRECTLY THEY PROBABLY CREATE ANOTHER 40 OR 50 MILLION JOBS. THE POINT OF THAT IS TO GET COMPETITIVE TAX REFORM, SKILLS INITIATIVES AND INFRASTRUCTURE AND SMART REGULATION, ET CETERA. A LOT OF CEOS ARE GOING TO GET INVOLVED TO MOVE THE AGENDA FORWARD. IM HOPEFUL. YOU SPEAK TO THE PEOPLE IN WASHINGTON, THEY SAY THEYRE GOING TO GET TOGETHER AND HAVE A REPUBLICAN PLATFORM. WE NEED ONE REPUBLICAN TAX RETURN AND THENT BRT IS GOING TO PUT MUSCLE BEHIND IT TO GET IT THE BRT JUST STARTED FOR THE FIRST TIME IN A LONG TIME DOING ADVERTISING WERE GOING TO HAVE EVENTS IN 50 CONGRESSIONAL DISTRCITS TO START EDUCATING PEOPLE HOW IMPORTANT TAX REFORM IS FOR JOBS AND WAGES AND BUSINESSES AND SMALL BUSINESSES ITS NOT ABOUT BIG CORPORATIONS. IT'S ABOUT OUR COUNTRY.
FROST: SPECIFICALLY ON THE TAX REFORM ISSUE, YOURE IN THE MIDDLE ALSO AT THE MOMENT OF YOUR COMPANYS ANNUAL BUS TOUR AND IN A COUPLE DAYS TIME YOULL BE WELCOMING MITCH MCCONNELL AS PART OF THAT TO DISCUSS THE IMPORTANCE OF TAX REFORM IS THAT RIGHT?
DIMON: HELL BE JOINING US AT SOMETHING THAT WERE DOING IN LEXINGTON OR LOUISVILLE, SOMETHING LIKE THAT AND THE BUS TOUR, YOU KNOW, WE DO EVERY YEAR WE DO OTHER TOURS OFTEN BY AIR. BUT WE GET TO MEET CLIENTS AND CUSTOMERS AND EMPLOYEES AND SHOW APPRECIATION WE LEARN A LOT LIKE ON THE BUS BETWEEN THESE CITIES AND WELL HAVE BEEN IN MINNEAPOLIS, MILWAUKEE, MADISON, CHICAGO, INDIANAPOLIS.
FROST: THIS IS SUPER TIME CONSUMING FOR YOU TO DO ALL OF THIS. IS IT WORTH IT?
DIMON: ABSOLUTELY. ITS FOUR OR FIVE DAYS WE LEARN A LOT FROM OUR CUSTOMERS. WE GET TO SAY THANK YOU. WE HAVE APPRECIATION EVENTS. WE DO TOWN HALLS LATER ON WERE DOING A TOWN HALL IN SOLDIERS FIELD FOR 2500 PEOPLE. MEANWHILE ON THE BUS IN BETWEEN, WE ASK PEOPLE WHAT CAN WE DO BETTER WE ASK OUR TELLERS, OUR BRANCH MANAGERS, INVESTMENT ADVISORS AND WE GET A LONG LIST OF STUFF AND WE TAKE THAT LIST AND FIX IT WE LEARN A LOT AND WE DO THE SAME WITH CUSTOMERS. YOU MEET THEM, THEY TEND TO TELL YOU WHAT YOURE DOING WELL AND SOME THAT YOURE NOT DOING SO WELL.
FROST: SPECIFICALLY WHEN MITCH MCCONNELL JOINS YOU, WHAT YOU ARE SAYING TO HIM IS YOUR ADVICE? IS THE FAILURE FOR SEEING VARIOUS BILLS GET THROUGH ON CONGRESS ON HIM AND SENATE OR ON THE TRUMP ADMINISTRATION?
DIMON: IM NOT GOING TO BLAME ANYONE EVERYONE WANTS TO GET IT DONE. AT LEAST EVERYONE IN THE REPUBLICAN PARTY WE DONT QUITE KNOW IF THE DEMOCRATS WANT TO DO WITH TAX REFORM MY MAJOR POINT IS WE SHOULD GET TOGETHER AND WORK AS HARD AS WE CAN TO GET IT DONE IF WE FAIL, WE FAIL IM GOING GIVE IT MY BEST SHOT I THINK ITS CRITICAL TO AMERICA.
FROST: LET'S TALK ABOUT DEREGULATION AS WELL. WE HAVE SEEN THE TREASURY WHITE PAPER ON THAT WERE YOU ENCOURAGE OF THE CONTENTS OF THE FINANCIAL DEREGULATION.
DIMON: IT IS VERY IMPORTANT FOR THE PUBLIC TO KNOW NO ONE IN NONE OF THE MAJOR BANK I KNOW TO HAVE THROWN OUT DODD FRANK GOING BACK TO THE GOOD OLD TIMES OR EVER GOING BACK TO PROPRIETY TRADING THIS IS ABOUT RECALIBRATING THE THINGS THAT MAYBE DIDN'T WORK VERY WELL. THOUSANDS OF RULES WE RECALIBRATE CAPITAL LIQUIDITY IN A WAY THAT YOU CAN HELP AMERICA GROW FASTER I GAVE ONE EXAMPLE WHICH I WROTE ABOUT IN JIMS LETTER WHERE MORTGAGE LENDING IS SO CONSTRAINED BY RULES, REGULATIONS AND COST, ET CETERA THAT ITS UNAVAILABLE TO WHOLE GROUPS OF PEOPLE LIKE YOUNGER PEOPLE, PRIOR DEFAULTS, IMMIGRANTS AND FIRST TIME BUYERS THATS NOT RIGHT THAT ONE THING MAY HAVE HELD THEM BACK GROWTH BY 1.5% OVER A FIVE OR SEVEN YEAR PERIOD. IT SHOULD BE FIXED THE REGULATORS KNOW THAT AND THEY WANT TO GET IT DONE THE TREASURY PORTION LAYS OUT THINGS THAT SHOULD BE LOOKED AT, CALIBRATED NOTHING SHOULD INCREASE THE RISK OF A BANK.
FROST: WHAT DO YOU SAY TO THE CRITICS OF THAT WHITE PAPER, THE TREASURY WHITE PAPER, THAT SAY IT'S GOING TO BENEFIT YOUR SHARE PRICE MORE THAN IT BENEFITS THE U.S. ECONOMY?
DIMON: I THINK PEOPLE FOCUS ON THE WRONG THING. DO THE RIGHT THING AND WHETHER IT BENEFITS OR DOESN'T BENEFIT MY SHARE PRICE IS NOT THE ISSUE. DO THE RIGHT THING. DON'T DO THE WRONG THING SO CAN YOU HURT MY SHARE PRICE AND HURT THE AMERICAN PUBLIC AT THE SAME TIME. SO THE FACT IS, WHAT IS THE RIGHT CALIBRATION? IT HAS NOTHING TO WITH JPMORGAN SHARE PRICE. YOU KNOW, I AM A PATRIOT BEFORE I'M THE CHAIRMAN AND CEO OF JPMORGAN. I THINK ITS VERY IMPORTANT FOR PEOPLE – WHAT ACTUALLY WORKS? WHAT DOESNT WORK? AND GO BACK TO THAT KIND OF CONSTRUCT.
FROST: YOUR SHARE PRICE, AS SIDE POINT, HITTING AN ALL-TIME HIGH TODAY AS WELL.
DIMON: YEAH.
FROST: SO CONGRATULATIONS ON THAT.
DIMON: WELL, CONGRATULATIONS TO THE 250,000 PEOPLE WHO HAVE WORKED HARD FOR THE LAST TEN YEARS SERVING 50 MILLION CUSTOMERS HOUSEHOLDS, 60 COUNTRIES, LARGE CORPORATIONS. AND MY HAT'S OFF TO ALL OF YOU FROM JPMORGAN CHASE, THANK YOU.
FROST: LET'S TALK A LITTLE BIT ABOUT SOMETHING THAT ALREADY HAPPENED EVEN BEFORE WE GOT TO DEREGULATION, AND THAT IS THE RECENT SORT OF CCAR TESTS WHERE YOU APPROVED TO PAY OUT OVER 100% OF YOUR EARNINGS. 107%. MANY ANALYSTS HAD THOUGHT YOU WOULD ASK FOR MORE LIKE 80. YOU WERE BULLISH, YOU ASKED FOR MORE AND THEY APPROVED IT. WAS THAT VERY ENCOURAGING FOR YOU AND NEXT YEAR, CAN YOU ASK FOR MUCH MORE? CAN YOU PAY OUT 130%?
DIMON: YEAH, SO THE MOST IMPORTANT – SO FIRST OF ALL, WE BELIEVE IN STRESS TESTING AND THEY'VE BECOME VERY RIGOROUS, WHICH I THINK IS A GOOD THING. OUR PREFERENCE IS ALWAYS TO GROW THE COMPANY ORGANICALLY. SO IF YOU ACTUALLY ASK ME IF I'D RATHER USE THAT TO BUY BACK STOCK OR GROW THE COMPANY, I'D RATHER GROW THE COMPANY. AND SOME PEOPLE THINK THAT BANKS ARE BUYING BACK STOCK OR DOING SOMETHING LIKE THAT AND THEREFORE NOT MAKING LOANS. THE FACT IS LOANS AND STUFF LIKE THAT ARE CONSTRAINED BY OTHER THINGS. NOT RIGHT NOW BY CAPITAL. SO IF I HAD A CHOICE AND IF THINGS HAD BEEN DIFFERENT FIVE YEARS AGO, A LOT OF THE CAPITAL WOULD HAVE BEEN USED MAKING LOANS TO HELP FUND AMERICAN SOCIETY. AND I THINK WE WILL GO BACK TO THAT AT ONE POINT. SO THE GOAL IS NOT TO GO TO A BIGGER PAYOUT. I'D ACTUALLY GO TO LESS OF A PAYOUT AND SPEND MORE TIME GROWING OUR COMPANY, FINANCING THE ECONOMY. I ALREADY MENTIONED THERE COULD BE A TRILLION DOLLARS MORE OF MORTGAGE LOANS. AND A PORTION OF THAT WOULD HAVE BEEN TO OUR BANK, THAT WOULD HAVE FUELLED AMERICAN GROWTH. THAT'S WHAT WE SHOULD BE FOCUSING ON. YOU KNOW, NOT THE PAYOUT AND CCAR.
FROST: IN TERMS OF OTHER USES OF CAPITAL, WHAT ABOUT ACQUISITIONS? BECAUSE I, FOR ONE, WAS SURPRISED TO SEE YOU INVOLVED IN THE BIDDING FOR WORLDPAY A UK-BASED PAYMENTS COMPANY. IT WAS NOT A CHEAP ONE. $9 BILLION OR SOMETHING LIKE THAT. I MEAN IN RECENT YEARS, THE BIG U.S. BANKS HAVE BEEN NOWHERE IN TERMS OF ACQUISITIONS. IT WAS SOMETHING YOU BUILT A LARGE PART OF YOUR CAREER ON. IN THE YEARS AHEAD, ARE YOU GOING TO BE ABLE TO GO BACK TO THAT NOW? WILL YOU BE LOOKING TO MAKE ACQUISITIONS?
DIMON: WELL, IT'S IMPORTANT TO NOTE THAT WE CANNOT BUY A BANK IN THE UNITED STATES BY LAW. SO, OBVIOUSLY WE CAN'T DO THAT. AND WE DIDN'T MAKE A BID ON WORLDPAY. THEY ASKED US TO LOOK AT IT AND WE STARTED LOOKING AT IT AND OBVIOUSLY, THEY WENT INTO SOMETHING ELSE. ONE DAY THERE WILL BE ACQUISITIONS. AGAIN, MY PREFERENCE IS ORGANIC. SO WE CAN GROW EVERY BUSINESS WE ARE IN AROUND THE WORLD ORGANICALLY. THERE MIGHT BE SMALL ACQUISITIONS. IF THEY HAPPEN, AND THIS IS NOT A PROMISE, THEY'RE PROBABLY GOING TO BE MORE AROUND TECHNOLOGY, PRODUCTS AND SERVICES, PAYMENT SYSTEMS THAN THEY ARE ABOUT ANYTHING YOU COULD CONSIDER MORE TRADITIONAL BANKING. AND, OF COURSE, YOU CAN'T DO ANY OF THAT WITHOUT REGULATORY APPROVAL. AND THE REGULATORS WILL MAKE IT KNOWN TO US WHAT THEY WOULD ALLOW US TO DO AND NOT ALLOW US TO DO.
FROST: AT THE DEPTH OF THEIR TROUBLES LAST SEPTEMBER WHEN THEIR SHARE PRICE WAS A LOT LOWER, DID THE THOUGHT CROSS YOUR MIND OF TRYING TO BID FOR DEUTSCHE BANK? WHETHER TO HELP THEM OUT OR HELP YOU OUT STRATEGICALLY?
DIMON: NO.
FROST: NEVER CAME ACROSS YOUR MIND?
DIMON: NO. WE WOULDN'T HAVE BEEN ABLE TO BUY DEUTSCHE BANK BY OUR REGULATORS. BUT I MADE THE POINT PUBLICLY THAT DEUTSCHE – AND LOOK, THEY'VE RECOVERED. I THOUGHT THEY WERE GOING TO RECOVER. THEIR STOCK HAS COME BACK. THEY HAD SOME MAJOR PROBLEMS. THEY WE KIND OF MANMADE PROBLEMS. THEY WEREN'T A FINANCIAL CRISIS. AND IT WASN'T A LOT OF CAPITAL YOU'RE TALKING ABOUT. SO WHEN I WAS TALKING TO REGULATORS, IS THAT FOR A VERY LITTLE AMOUNT OF CAPITAL THAT WILL NOT BE A PROBLEM. AND SO, YOU DON'T WANT TO HAVE A FINANCIAL PROBLEM BECAUSE A BANK NEEDS A LITTLE BIT OF CAPITAL.
FROST: IN TERMS OF MARKETS AT THE MOMENT, ARE YOU CONCERNED ABOUT THE LEVEL OF BOND MARKETS? IS THERE A BUBBLE THERE? AND WHEN THE FED DOES START TO NORMALIZE ITS BALANCE SHEET, IS THAT GOING TO CAUSE PROBLEMS FOR SOME PEOPLE?
DIMON: WHEN YOU SAY, "AM I CONCERNED?" -- I'M NOT CONCERNED FOR JPMORGAN, BECAUSE WE'LL BE FINE WHATEVER THE ENVIRONMENT IS. SO I'M NOT THAT CONCERNED. I DO THINK THAT BOND PRICES, YOU KNOW, SPREADS, BOND PRICES ARE HIGH, SPREADS ARE LOW. I'M NOT GOING TO CALL IT A BUBBLE, YOU KNOW, BUT I WOULDN'T PERSONALLY BE BUYING A TEN YEAR SOVEREIGN DEBT ANYWHERE AROUND THE WORLD. BECAUSE YOU KNOW, WE WENT TO QE 1, 2 AND 3 AND NOW WE'RE REVERSING IT. MY VIEW IS THE FED IS DOING THE RIGHT THINGS – RAISING RATES, YOU KNOW, TELLING PEOPLE THEY'RE GOING TO START REDUCING THE BALANCE SHEET. THE LIKELY OUTCOME IS THAT IT'LL BE FINE AND PARTICULARLY FOR THE AMERICAN ECONOMY – IT IS DOING WELL, SO THE FED IS DOING THESE THINGS IN THE FACE OF A STRONG ECONOMY, I DON'T THINK IT'S GOING TO BE THAT DISRUPTIVE. ALL I'VE EVER POINTED OUT IS, THERE IS A CHANCE IT COULD BE DISRUPTIVE. THERE IS A POSSIBILITY BECAUSE WE NEVER HAD THE REVERSE OF QE 1, 2, OR 3 BEFORE. AND IF YOU SEE THE ECB DOING, IF YOU SEE THE UNITED STATES DOING IT, THEN MAYBE THE ENVIRONMENT IN NOT THE ENVIRONMENT THAT PEOPLE EXPECT. PEOPLE CANNOT PREDICT THE FUTURE SO MY OWN VIEW IS YOU CAN'T MAKE SOMETHING CERTAIN WHICH IS NOT CERTAIN, AND THERE IS A CHANCE THIS WON'T GO WELL. BUT YOU KNOW WHAT? THEY'LL FIGURE IT OUT AND THE FED WILL RESPOND APPROPRIATELY IF THINGS ARE NOT GOING THE WAY THEY SEE FIT.
FROST: WHEN WE TALK ABOUT MARKETS DYNAMICS, THE LAST TWO OR THREE YEARS HAS BEEN ONE OF A STRONG RISING DOLLAR. THE LAST TWO OR THREE MONTHS, THAT'S TURNED AROUND IN THE OPPOSITE DIRECTION. WHAT IS YOUR VIEW ON THE DOLLAR AND IS THAT GOING TO BECOME A SORT OF TREND THAT WE'RE STUCK IN NOW – A WEAKER DOLLAR.
DIMON: NO. YOU KNOW, I HATE TO FORECAST THINGS LIKE CURRENCIES AND -- CURRENCIES MOVE GENERALLY, YOU KNOW. THERE IS AN EXPECTATION IN THE WORLD. WHEN THE EXPECTATION CHANGES, THE CURRENCIES TEND TO MOVE. AND THE EXPECTATIONS ARE USUALLY AROUND TWO THINGS. I'M OVERSIMPLIFYING THIS BUT TWO THINGS. ONE IS, IS THE COUNTRY GOING FASTER OR SLOWER THAN PEOPLE EXPECTED VERSUS OTHER COUNTRIES? AND NOW WE'RE A LITTLE BIT SLOWER, BECAUSE WE'VE SEEN EUROPE PICK UP AND JAPAN PICK UP. AND THEIR INTEREST RATE IS GOING TO GO HIGHER OR LOWER, LESS THAN EXPECTATIONS THAN PEOPLE THOUGHT. AND THEY'RE LOWER THAN PEOPLE THOUGHT. AND THOSE TWO THINGS ARE PROBABLY DRIVING A SLIGHTLY LOWER DOLLAR. IF THE AMERICAN ECONOMY PICKS UP, AND RATES GO UP FASTER THAN PEOPLE THINK, THE DOLLAR WILL START TO GET STRONG AGAIN.
FROST: WHAT WOULD YOU CONSIDER THE SORT OF MAIN TAKEAWAYS FROM Q2 EARNINGS FROM THE BIG BANKS? I'D SAY I SAY ONE OF THEM WOULD BE A SIGN THAT THE GAP IS NARROWING BETWEEN YOU AND SOME OF YOUR BIGGEST RIVALS. CITI HAD A GREAT QUARTER, MORGAN STANLEY'S CLEARLY FIGURED OUT ITS FIXED INCOME, BANK OF AMERICA HAD TWO OR THREE GOOD QUARTERS NOW. IS THAT SOMETHING THAT HURTS YOU -- THE COMPETITION?
DIMON: NO. LISTEN I'M A PATRIOT. I WANT ALL MY COMPETITORS TO DO WELL. I LIKE TO DO BETTER THAN THAT DO, I'M GOING TO WORK REAL HARD TO DO THAT. BUT I THINK THE RECOVERY OF THE AMERICAN FINANCIAL SYSTEM IS GREAT THING AND IS GREAT FOR AMERICA. SHOULD BE APPLAUDED. AND WE'VE ALWAYS EXPECTED PEOPLE WOULD BECOME COMPETITIVE AGAIN. AND IF YOU EVER HAVE A BUSINESS MEETING WITH ME AND WE TALKED ABOUT THE COMPETITION, I WILL SAY, "THERE'S COMPETITION. IT'S GOING TO BE GOOD. AND IT'S COMING AFTER YOUR BUSINESS." WHETHER IT IS BANK A, BANK B, BANK C OR D, IT ALMOST DOESN'T MATTER TO ME. SO, WE ALWAYS EXPECT THAT. IN FACT I THINK WE HAD TOLD PEOPLE THAT WE EXPECT THAT IT WILL GET HARDER FOR US AS OTHER PEOPLE GET A BIT STRONGER.
FROST: IN TERMS OF COMPETITION, CLEARLY A LOT OF COMPETITION --
DIMON: BUT WE HAVE SO MUCH GOOD STUFF COMING. FROM ELECTRONIC TRADING TO ONLINE SELF-DIRECTED TRADING TO -- I MEAN, I CAN'T EVEN TELL THE PEOPLE – BUT I MEAN, TONS OF STUFF COMING THAT I THINK WILL BE REALLY EXCITING AND HELP US IN GROWING OUR BUSINESS AND DOING A BETTER JOB SERVING OUR CLIENTS.
FROST: ONE OF THE NEW INTRODUCTIONS IN THE LAST YEAR IS CHASE SAPPHIRE, THE CREDIT CARD. AND THERE IS A LOT OF COMPETITION IN THAT SPACE. THE TAKEUP WAS VERY STRONG BUT WE'RE COMING TO SORT OF YOUR ANNIVERSARY. ARE YOU LEARNING SINCE THAT THE PROFITABILITY IS GOING TO BE LESS GOOD THAN YOU'D HOPED?
DIMON: SO THE - FIRST OF ALL, THE TAKEOFF, WE SOLD IN TWO WEEKS WHAT WE EXPECTED TO DO IN A YEAR. AND FOR THOSE OF YOU LISTENING – THE ACCOUNTING RULES ARE THAT THE MARKETING EXPENSE ARE APPLIED YEAR OVER YEAR. BUT OF COURSE THE BENEFIT OF THE CARD, AND IT'S A BIG MARKETING EXPENSE FOR SAPPHIRE, BECAUSE OF ALL FREE STUFF THAT GOES THERE. THE BENEFIT COMES OVER SEVEN YEARS. SO IN ANY NEW PRODUCT, YOU'RE ALWAYS LOOKING AT WHAT'S HAPPENING. YOU KNOW, ATTRITION RATES, SPENDING RATES, LENDING RATES, ALL THAT KIND OF THING. GREAT CLIENTELE. WE DON'T EXACTLY YET. WE'RE TRACKING IT AND WE FEEL OKAY. IT CAN BE BETTER OR WORSE THAN WE THOUGHT, BUT IT'S BEEN A GREAT PRODUCT AND WE'VE REALLY ENJOYED IT. IT IS GREAT FOR MILLENNIALS BY THE WAY. AND OBVIOUSLY AS A BANK, WE HAVE A LOT OF THINGS TO DO WITH THE CLIENTS IN ADDITION TO THE CREDIT CARDS, SO--.
FROST: WHAT WE HAVEN'T TALKED ABOUT -- JPMORGAN ITSELF AND THE FUTURE. MATT ZAMES, YOUR CEO LEFT RECENTLY. WHEN YOU CONSIDER THAT OTHER FELLOW HEIR APPARENTS IN THE PAST – BILL WINTERS, MIKE CAVANAGH, JES STALEY HAVE ALL LEFT AS WELL, WHAT WOULD YOU PUT THAT DOWN TO? WHY ALL THE GREAT MINDS LEFT YOUR COMPANY?
DIMON: LOOK, I AM THRILLED THAT THOSE FOLKS ALL DOING QUITE WELL AND I APPLAUD ALL THE STUFF THEYRE DOING. WE HAVE THE BEST TALENT JPMORGAN CHASE I'VE EVER SEEN. AND SO YOU MET, SOME OF THE PEOPLE -- SOME OF YOU OUT THERE -- HAVE MET SOME OF THE PEOPLE WE HAVE HUGE SUCCESS AND GREAT PEOPLE FOR SUCCESSION OF THE BANK. PEOPLE ARE GOING TO LEAVE AND DO THEIR OWN THINGS AND, YOU KNOW, YOU GOT APPLAUD THAT. AND THAT'S WHAT HAPPENS TO A
COMPANY. SO WE'RE IN GREAT SHAPE.
FROST: THE ISSUE OF GENDER EQUAL HAS RAISED ITS HEAD A LOT IN THE WORKPLACE RECENTLY, PARTICULARLY IN CERTAIN COMPANIES IN SILICON VALLEY. WOULD SAY THAT WALL STREET
IS AHEAD OF SILICON VALLEY ON THAT AS AN ISSUE?
DIMON: YES. AND I'M EXTREMELY PROUD TO SAY 30% OF MY DIRECT REPORTS ARE WOMEN. I'VE BEEN TRYING TO THE GET THE PRESS TO WRITE A STORY ABOUT THIS FOR YEARS. 30% OF OUR TOP 200 PEOPLE ARE WOMEN. AND THEY HAVE UNBELIEVABLE JOBS -- GLOBAL JOBS, THEY'RE IN INVESTMENT BANKING, M & A, EQUITY CAPITAL MARKETS, PRIVATE BANKING, CREDIT CARD, RETAIL. WE HAVE A BLACK WOMAN THAT RUNS OUR RETAIL DIVISION, WHO IS ON THIS TRIP FOR US. THAT'S ON ON THE DOCKET, SHE'S WAS OUTSTANDING. I'M JUST DO DAMN SO PROUD OF WHAT WE'VE DONE IN THAT. AND YOU KNOW, MOST COMPANIES WANT TO DO A GOOD JOB. SO I THINK IT'S GREAT.
FROST: AND WHAT ABOUT ON RACIAL EQUALITY? IS THERE MORE THAT JPMORGAN NEEDS DO THERE?
DIMON: YEAH – GLAD YOU KNOW, THE OTHER VERY IMPORTANT THING ABOUT GENDER EQUALITY AND RACIAL EQUALITY, THE DOOR TO THAT IS PEOPLE AT A COMPANY FEEL TRUSTED AND RESPECTED AND THERE IS EQUAL OPPORTUNITY. AND YOU CAN YOU SPEAK TO EVERYONE. THERE IS NOT FAVORITISM. THERE IS NOT GROUPS OF – GANGS OF PEOPLE - AND NOT POLITICS. IF YOU DON'T GET RID OF THAT, YOU'LL HAVE – YOU'LL NEVER HAVE GENDER DIVERSITY. AND SO AFRICAN-AMERICANS, WE'RE MAKING A SPECIAL EFFORT BECAUSE WE ACKNOWLEDGE THAT WHAT – WE'VE DONE AS WELL AS ANY CORPORATION OUT, WE HAVE DONE JPMORGAN WELL. SO LIKE, WE DO A LOT OF THINGS. WE SET UP A SEPARATE GROUP, WE ADDED SCHOOLS RECRUITING, WE ADDED RETENTION, WE ADDED TRYING TO HIRE MORE SENIOR AFRICAN-AMERICAN TALENT. AND IT'S STARTING TO WORK. THE NUMBERS ARE GETTING BETTER. AND IT'S DIFFERENT. WE SHOULD – WE HAVE TO ACKNOWLEDGE THE REASON ITS DIFFERENT IS BECAUSE IT'S A DIFFERENT HISTORY, A DIFFERENT BACKGROUND. YOU KNOW, A LOT OF AFRICAN-AMERICANS DIDNT GROW UP IN THE SAME NEIGHBORHOODS AS WHITE PEOPLE. THEY DIDN'T GROW UP – YOU KNOW WHITES ARE MAYBE A LITTLE LESS COMFORTABLE WITH THEM. SO TO MAKE IT SPECIAL IS A GOOD THING. I DO GET ASKED VERY OFTEN ABOUT OTHER PEOPLE - WHY NOT US? WELL WE'RE DOING GREAT WITH WOMEN. WE'RE DOING GREAT WITH ASIANS. WE'RE DOING GREAT HISPANICS. WE'VE GOT TO DO BETTER WITH AFRICAN-AMERICANS. AND WE ARE GOING TO.
FROST: I JUST WANT TO TOUCH A LITTLE BIT ON THE LONDON WHALE ISSUE, OF COURSE, THE ISSUE THAT COST YOUR FIRM BILLIONS OF DOLLARS AND A LOT OF HEADLINES A FEW YEARS BACK. IN JUNE, RELATIVELY RECENTLY, BRUNO IKSIL PUBLISHED HIS VIEWS IN DETAIL ON THE INTERNET. AND FOR THE FIRST TIME HE DID VERY CLEARLY AND SPECIFICALLY POINT THE FINGER AT YOU. WHAT'S YOUR RESPONSE TO THAT ACCUSATION?
DIMON: FIRST OF ALL, BRUNO – MY PERSONAL VIEW -- IS NOT THE GUY TO BLAME. OKAY, THAT HE WAS DOING WHAT HE WAS ASKED TO DO. IT GOT TOO BIG AND OUT OF CONTROL. FHE WANTED -- FROM WHAT I UNDERSTAND, SUPPOSEDLY HE WANTED TO DO SOMETHING ABOUT IT. AND COMPANIES MAKE MISTAKES, OKAY?? AND THERE ARE GOOD MISTAKES AND BAD MISTAKES. WE MADE A MISTAKE AND CONFESSED IT RIGHT AWAY. BAD RISK AND BAD CONTROLS, ETCETERA. IT'S IN THE PAST. I COULD CARE LESS ABOUT THE LONDON WHALE ISSUE, BUT I WANT TO POINT OUT THAT HERES -- HERE'S A TYPICAL EXAMPLE OF NO CUSTOMER GOT HURT. IT WAS US. IT EMBARRASSED US. IT HURT OUR COMPANY. NO CUSTOMER GOT HURT AND WE FIXED THE PROBLEM. AND SO I AGREE, we OBVIOUSLY MAKE MISTAKES IN LIFE. AND YOU KNOW, HOW YOU DEAL WITH MISTAKES IS MORE IMPORTANT THAN WHETHER YOU MAKE THEM OR NOT. YOU ARE GOING TO MAKE THEM. I DON'T KNOW ANY BUSINESS PERSON OUT THERE, ANYONE IN ANY SIZE COMPANY WHO HASN'T MADE A MISTAKE OF SOME SORT AND, OF COURSE, WHEN YOU MAKE A MISTAKE, A LOT OF PEOPLE COME AFTER YOU ABOUT THAT MISTAKE AND YOU HAVE TO DEAL WITH THAT.
FROST: I WANT TO TALK TO YOU A LITTLE BIT ABOUT YOUR FAMILY. YOU SPOKEN AT LENGTH TODAY ABOUT YOUR LOVE FOR YOUR EMPLOYEES, THE IMPACT THEY HAVE MADE IN BRINGING YOU TO WHERE YOU ARE TODAY AND YOUR CAREER. WHAT ABOUT SPECIFICALLY YOUR FAMILY AND THEIR IMPACT ON YOUR CAREER WOULD YOU BE WHERE YOU ARE TODAY WITHOUT THEIR SUPPORT?
DIMON: I THINK I'VE ALWAYS SAID, FAMILY FIRST, COUNTRY SECOND, JPMORGAN, LITERALLY, LAST. I MEAN, JPMORGAN IS THE BEST I CAN DO FOR MY COUNTRY. AND MY FAMILY I SPEND A LOT OF TIME WITH THEM. SO MY LIFE IS KIND OF BARBELL. I SPEND A LOT OF TIME WITH THE FAMILY, WEEKENDS, I HAVE TWO GRANDDAUGHTERS, I HAVE WONDERFUL DAUGHTERS, A WONDERFUL WIFE, AND A LOT OF TIME WORK. AND I LIKE WORKING. YOU DON'T SEE ME A LOT OF BLACK TIES AND STUFF LIKE THAT SO THOSE ARE KIND OF THE TWO THINGS I DO AND OF COURSE, WITHOUT – MY PARENTS DIED RECENTLY. WITHOUT YOUR FAMILY AND THE SUPPORT OF YOUR FAMILY AND WHAT YOU LEARN FROM THEM AND IN THE GOOD TIMES AND THE TOUGH TIMES, YOU MAY NOT HAVE A GREAT LIFE. SO I ALWAYS TELL PEOPLE AT JPMORGAN CHASE, YOU'VE GOT TO TAKE CARE OF YOUR FRIENDS, YOUR FAMILY, YOUR SPIRIT, YOUR MIND, YOUR BODY, YOUR SOUL. OTHERWISE YOU WON'T HAVE A FULFILLING LIFE AND THOSE ARE IMPORTANT. THE JOB IS IMPORTANT, TOO, BECAUSE YOU SPEND MOST OF YOUR TIME AT THE JOB, BUT THOSE THINGS ARE MORE IMPORTANT.
FROST: YOU MENTIONED THE TOUGH TIMES. WHAT DO YOU THINK THE SINGLE TOUGHEST MOMENT OF YOUR CAREER WAS?
DIMON: YOU KNOW PEOPLE EXPECT ME TO SAY THE LONDON WHALE, NOT EVEN CLOSE. AND THOUGH IT WAS PAINFUL FOR THE COMPANY AND I WAS QUITE WORRIED ABOUT THAT, BECAUSE IT HURTS THE PEOPLE IN THE COMPANY, WE ARE FLESH AND BLOOD. AND SOME WOULD SAY WHEN I GOT FIRED BY CITI, NOPE. I THINK THE WORST TIME AND ITS KIND OF REPRESENTED BY WHEN I CALLED UP THE MANAGEMENT TEAM AND MY BOARD OF DIRECTORS, BOTH ON FRIDAY NIGHT AND SATURDAY NIGHT, THE WEEKEND THAT LEHMAN WAS GOING BANKRUPT AND TOLD THEM THAT YOU WE'RE GOING TO HAVE THE WORST, SCARIEST WEEK THAT YOU'VE EVER SEEN IN THE FINANCIAL MARKETS OR THE FINANCIAL SYSTEM IN THE UNITED STATES AND THAT JPMORGAN CHASE WILL DO EVERYTHING WE CAN TO HELP OUR COUNTRY. WE DID A LOT OF THINGS JUST TO HELP THE COUNTRY, NOT FOR PROFIT.
FROST: ALMOST TEN YEARS AGO THAT WAS. WE'LL COME BACK TO THAT IN JUST A MOMENT. BEFORE I COME TO THE SORT OF CONCLUSION, YOU SAID ON THE EARNINGS CALL, WE'VE TOUCHED ON PART OF THAT ALREADY, BUT YOU SAID ON THE EARNINGS CALL, YOU DIDN'T THINK GROWTH WOULD GET WORSE WITHOUT WASHINGTON IN ACTION. IT'S JUST THAT IT COULD GET BETTER WHEN WASHINGTON STARTS TO PASS THOSE REFORMS WE'VE TALKED ABOUT. WHAT ABOUT SINCE THE EARNINGS CALL? THERE'S BEEN A LOT OF BUMPINESS IN THE TRUMP ADMINISTRATION OVER THE SUMMER. ARE YOU STARTING TO GET NERVOUS ABOUT THE OUTLOOK FOR ECONOMIC GROWTH UNDER THE TRUMP ADMINISTRATION?
DIMON: THE POINT -- THE REAL POINT IS, IS THAT THE AMERICAN ECONOMY IS 150 MILLION PEOPLE GO TO WORK EVERY DAY. ITS BUSINESSES LIKE THIS, IT'S EVERYONE HERE. IT'S MAYBE SHOCKING FOR PEOPLE TO UNDERSTAND, THAT IN SPITE OF GEOPOLITICS SOMETIMES, IN SPITE OF WASHINGTON, THAT RESILIENCY AND STRENGTH IN THAT SYSTEM IS PRETTY GOOD. MOST PEOPLE DON'T GO TO WORK THINKING ABOUT WASHINGTON. THEY GO TO WORK THINKING ABOUT THEIR KIDS AND THEIR FAMILY AND THEIR JOB AND THEIR CUSTOMERS AND STUFF LIKE THAT. AND SO, WHAT I WAS SAYING IS THAT AMERICA IS GOING 2% IN SPITE OF SOME OF THAT GRIDLOCK. I THINK IF BUSINESS AND GOVERNMENT COLLABORATED MORE, AND WE GOT SOME OF THESE THINGS DONE, LIKE INFRASTRUCTURE, TAX, REGULATORY REFORM, WE'D BE GROWING FASTER. THAT'S MY MAIN POINT ABOUT THAT.
FROST: AND JAMIE, TO ROUND THINGS OFF, AT THE PEAK OF THE FINANCIAL CRISIS, AND WE'VE JUST HEARD YOUR MEMORIES ABOUT THAT, YOU SENT TO YOUR FRIEND AND TREASURY SECRETARY, HANK PAULSON, A NOTE OF SUPPORT AT A MOMENT HE WAS TAKING A LOT OF HEAT IT. WAS A QUOTATION FROM TEDDY ROOSEVELT ABOUT CRITICISM IT READ THIS, "IT'S NOT THE CRITIC WHO COUNTS, BUT THE MAN GOES TO THE MAN WHOS ACTUALLY IN THE ARENA, WHOSE FACE IS MARRED BY SWEAT AND BLOOD AND DUST IF HE FAILS, AT LEAST HE FAILS WHILE STARING GREATLY." YOU'VE CRITICIZED WASHINGTON RECENTLY. ONE DAY, WILL YOU CEASE TO BE THE CRITIC OF POLITICS AND STEP INTO THE ARENA YOURSELF?
DIMON: NO. I'M NOT STEPPING INTO THE ARENA. AND I'M NOT CRITICIZING WASHINGTON. OKAY, I'M CRITICIZING US COLLECTIVELY. COLLECTIVELY THE LEADERSHIP OF AMERICA HASN'T DONE THE THINGS THAT WOULD GET US GROWING FASTER -- JOBS AND WAGES. WE SPEND A LOT OF TIME SLINGING THINGS AT EACH OTHER, MAKING EVERY DECISION LIKE ITS BINARY. WE DON'T DO ENOUGH ANALYSIS AND PLANNING, WHICH I THINK IS A GOOD THING TO DO. I'M JUST TRYING TO DO MY SHARE TO GET US WORKING TOGETHER. AND SO, HANK PAULSON WHO DID AN UNBELIEVABLE JOB IN THAT CRISIS, AND AS YOU ALL KNOW AND YOU'VE READ SINCE THEN HOW HE SUFFERED THROUGH IT, HE DID SOME GREAT STUFF FOR AMERICA AND I STILL APPLAUD HIS ACTIONS. EVEN THOUGH JPMORGAN PAID A HUGE PRICE FOR SOME OF THEM AFTER THE FACT.
FROST: JAMIE, THANK YOU VERY MUCH FOR JOINING US IN THE BUSINESS NEWS ARENA TODAY WE ARE
VERY GRATEFUL. JAMIE DIMON.
FROST: ALWAYS A PLEASURE.
DIMON: THANK YOU.
FROST: JAMIE DIMON, CHAIRMAN AND CEO OF JPMORGAN CHASE.
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