Thanks to outspoken CEO Jamie Dimon, it's rare that a JPMorgan Chase (NYSE: JPM ) quarterly conference call is a dull experience. Dimon usually has something to say about just about everything, and because he's been in the business as long as he has, investors tend to listen.
This quarter was no exception, and Dimon had some choice thoughts on a number of key issues.
The fiscal cliff
We're right around the corner from what my fellow Fool Morgan Housel said could be "one of the biggest shocks to the economy since the financial crisis." But it's clear Dimon isn't losing sleep over it. Here's what he had to say:
The investment bank would be more sensitive to what the market reacts to if they get very scared about the fiscal cliff, but ... we just don't know. We're going to be prepared. ... But I can give you arguments why fiscal cliff could drive volumes up in the short run.
The Federal Reserve is attempting to use its monetary might to boost the economy, but what does that mean for banks like JPMorgan as well as key competitors such as Bank of America (NYSE: BAC ) and Wells Fargo (NYSE: WFC ) ? Here's Dimon's view:
[L]ower rates [hurt] you a little bit. They obviously help mortgage origination and ultimately housing prices, because low rates could drive that part of the economy a little bit. If it were to drive the economy, and I'm not sure it will, that would be a plus for us. So I think they're doing their job not to help banks or hurt banks but to try to drive the economy and drive jobs. If that works, it's a good plus.
I personally think that fiscal policy is going to be more important than the Fed policy soon. The Fed needs help with rational fiscal policy.
Lawsuits have been a thorn in bank investors' sides since the financial crisis, and they don't seem to be abating yet. B of A recently settled with investors over issues related to its Merrill Lynch takeover, and Wells Fargo was hit with a suit from the Federal Housing Administration. In regard to the latter, Dimon doesn't seem to think JPMorgan will duck out on this issue:
We haven't disclosed anything -- but I would expect that when these things come out everyone's going to ... have something of the same order just in the ordinary course of business. It's unlikely that you have ... three people get it and not the fourth.
But JPMorgan also recently found itself on the wrong side of a suit over issues related to Bear Stearns, which it acquired during the financial crisis. Dimon had some particularly choice words about this suit:
[A]s a policy matter, it's going to make it much harder in the future for companies to buy a troubled company. ... I also want to mention when the government bankrupted GM (NYSE: GM ) -- you do remember they did bankrupt GM -- they absolved GM of all private legal liability, so the government is being a little inconsistent here.
The Bad News Bears of Europe
The European debt crisis continues to be front and center in many investors' minds, though there are some reasons to believe that progress is being made. Dimon doesn't seem to think it's all lollipops and rainbows ahead, but he's happy that JPMorgan didn't pull out of the region:
So I think they've made a lot of progress. You see it reflected in bond rates. I still think it's going to be a roller coaster. There will be ups and downs as things -- good things happen or bad things happen. They are only in a mild recession. I think that's a very good thing and we have always made a decision to continue to conduct business in France and Germany and the U.K. and Spain and Italy.
Buy, sell, or run like heck?
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