What’s Worrying JPMorgan’s Dimon? Bad Policy

One day after JPMorgan Chase & Co.’s fourth-quarter earnings report, chairman and CEO Jamie Dimon seemed less concerned about missing Wall Street’s estimates and more concerned about U.S. government policy.

JPMorgan’s fourth-quarter earnings marked the first time since 2015 that the firm missed estimates on both earnings per share and revenue — largely because fixed income trading revenue plummeted 18%.

One analyst called the plunge in fixed income trading revenue “very un-JPMorgan-like.”

However, Dimon, who spoke at an Economic Club of New York meeting on Wednesday, said that he doesn’t care “what their estimates are.”

“Wall Street estimates are what 20 people think are estimates. They’re smart people. They’re not smart people. I call them ‘smart-dumb-average,’” he said, adding that there’s too much focus on the short term. “You know what’s important to me? Market share. Number of clients. Products and services. New branches.”

What’s also important to Dimon? U.S. public policy.

In his conversation with the club, Dimon said that what he worries about most today is “bad policy.”

“Things like immigration reform, [and] we need a good trade deal,” he explained.

In addition to trade and immigration, Dimon also mentioned throughout his speech that regulation, college education, health care and infrastructure were other policies that needed to be fixed, as well as the current government shutdown.

“And it can all be fixed, so I worry mostly about our own public policy,” Dimon said, adding, “The government shutdown — I put in the same category.”

Earlier this week on a media call discussing fourth-quarter results, Dimon referred to an economist who estimated that if the shutdown lasted for the whole first quarter it could reduce growth to zero.

“Now, I don’t know that,” Dimon said on Wednesday. “It would be really hard to figure out what the shutdown does to the economy.”

But he did stress that the shutdown was a negative for businesses.

“Sentiment does matter in business — so, the more you create negative sentiment, the worse it is,” he explained.

Dimon added that he hoped there’s a deal to be done to end the shutdown.

His suggestion: “Give the president money for border security — I don’t care whether you call it a wall or fence or whatever. And then, do something for DACA or merit-based immigration, which we need anyway, and almost every citizen is for.”

Dimon called for more compromise in government.

“When the democracy was formed, that meant you compromise. That’s what democracy is. You can’t have a democracy where you refuse to compromise,” Dimon said. “At one point, you’ve got to get back to regular government.”

— Related on ThinkAdvisor:

• Warren Probes Wells Fargo, BofA on Shutdown Assistance Plans
• US CEOs Forecast Slower Growth; Oppose Trade Barriers