J.P. Morgan’s Jamie Dimon: ‘We Almost Deserve $4 Gas”

Posted by Kris | Tuesday, July 08, 2008 | | 0 comments »


Posted by Heidi N. Moore
The reliably quotable J.P. Morgan Chase CEO Jamie Dimon went to the Aspen Ideas festival this week. The festival, hosted by Atlantic magazine and the Aspen Institute, featured an interview between Charlie Rose and Dimon. Dimon, whose firm caught, flayed and ate Bear Stearns, had several interesting observations during the wide-ranging conversation.
Here are some of Dimon’s key insights, as provided by a very helpful public-relations person.
On the poetic nature of cycles: History may not repeat, but it rhymes. I’m not a policy maker, but I think the government is right in doing fiscal stimulus. And possibly some directed tax cuts could help.

On complexity: I think the economy is virtually unfathomable. It’s so complex.
On being fooled by randomness: Buying a house and buying a house on fire are two different things. Bear Stearns wasn’t really of value. How much risk could we bear? $2 a share was all that we could bear. We bought someone else’s $350 billion of assets. We took a lot of risk and it’s not quite clear; we think we got a lot of great things, but it remains to be seen. But we needed a margin for error.

On bank regulation: I don’t know how this happened to Bear Stearns. Wall Street firms have gotten more and more leverage and more liquid assets. There’s been enough smoke around that I think there should be a full exploration by the SEC.

On why the U.S. and China need each other: We criticize the Chinese all the time, so it’s completely fair if they criticize us from time to time. It’s in humanity’s interest that China do well. They’re not going to do it our way to make their economy do well. China can’t do well if the United States is really sick. China doing well is good for our economy. They’re slowly opening up certain parts of their economy. They’re doing it in their way. They’re doing a pretty good job. We also want Russia to do well.

On oil, which recently hit a record $143 a barrel: We almost deserve $4 gas. We knew in 1974 that we had a serious issue but we don’t have the political fortitude to do anything about it. That’s the issue, not Russia.