When Jamie Dimon speaks, Wall Street listens

Good morning for all but the rapidly approaching debt ceiling. Phil Rosen here.

For the past week, the so-called “X-date” for a US bankruptcy has been the talk of the town, headlines and warnings Janet Yellen, Goldman SachsAnd Top CEOs.

But on Thursday the most respected man on Wall Street shared his take on the potentially catastrophic scenario that is just weeks away.

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1. Everyone listens when Jamie Dimon speaks. And yesterday he said there was a risk of widespread panic if the legislature does not pull itself together and enter into a debt agreement.

This panic “affects contracts, collateral, clearing houses and customers,” according to JPMorgan’s CEO, who is now the only major bank chief that existed in 2008 and is still at play today.

In an interview with Bloomberg, Dimon said he has put together a “war room”. at JPMorgan to plan for contingencies related to a potential US default.

He said his team currently meets once a week, but they could soon meet up to three times a day once people are in Washington continue to delay the negotiations.

While Dimon doesn’t anticipate the country will actually experience failure for the first time, he acknowledged that time is running out.

“The closer you get to that, the more panic you get,” he said. “Markets will become volatilemaybe the stock market will go down, the financial markets will have their own problems.”

Dimon, whose bank bought the assets of earlier this month failed at the First Republicsaid that such a thing should never happen, and any turmoil in America affects markets around the world.

As for the banking crisis Dimon said it’s about time regulators put an end to the mess – but he still predicts policymakers will learn the wrong lessons going forward.

“I think it’s going to get worse for the banks,” he said. “More regulations, more rules and more requirements. If you exaggerate certain rules, requirements, regulations – There are some of these community banks that tell me they have more compliance officers than loan officers.”

The story goes on

Blame should not only be placed on bank executives, but also on regulators also look in the mirroraccording to Dimon.

This is how he put it:

“I think regulators need to show humility. They should look at it and say, ‘Okay, we were a little bit part of the problem,’ instead of just pointing the finger.”

What do you think of the JPMorgan boss’s recent comments? tweet me (@philrosenn) or email me (prosen@insider.com) to let me know.

In other news:

2. US stock futures rise early Friday, while investors await the release of preliminary consumer sentiment data, due to be released this morning. Meanwhile, Tesla shares rose after Elon Musk made the announcement has found a new Twitter CEO. For the latest market movements, Click here.

3. Receipts on deck: Alliance, Olympus Corp. and more reporting.

4. A hedge fund manager shared how he uses GPT-4 to make his top stock picks. He said it’s not about a prompt or two, but rather how to navigate each prompt with follow-up questions. Here are six takeaways from his AI experiments.

5. A Zillow economist said that if the US defaults, home sales could plummet by 23%. The so-called “X-date” for the debt ceiling is fast approaching and the real estate market will come under pressure if a solution is not found. The unprecedented event would trigger a “major negative shock” and a “deep halt” to housing construction.

6. Fundstrat’s Tom Lee said the stock bull market is alive and well. Parts of the economy are experiencing “complete deflation,” he explained – and that could lead to a sharp price drop that will boost stocks.

7. South Africa’s currency is hovering near a record low. The US just accused the country of secretly selling arms to Russia, and a US ambassador said: “We do not consider this issue resolved.” Get the full details.

8. Which credit crunch? Credit Suisse’s chief US economist tells us why fears of a sharp contraction in lending are overdone. He also shared his view on why the US economy is well positioned to avoid a recession.

9. Personal Finance Expert “The Budgetnista” shared the two money mistakes that keep people from building wealth. She explained how to find out if you are on the right path.

10. Microsoft is the stock to buy as the company is ahead in the AI ​​arms race. That’s according to Wedbush, who said The tech giant’s early entry into OpenAI and ChatGPT gave it an advantage over Alphabet.

Curated by Phil Rosen in New York. Feedback or tips? tweet @philrosenn or E-Mail prosen@insider.com.

Edited by Max Adams (@maxradams) in New York and Hallam Bullock (@hallam_bullock) in London.

Check out the original article Business Insider