Reply #22: Dimon’s Davos Cry: Don’t Blame All Banks [View All]

[Demeter]

http://blogs.barrons.com/stockstowatchtoday/2011/01/27/dimons-davos-cry-dont-blame-all-banks/

JPMorgan Chase (JPM) CEO Jamie Dimon said Thursday that the ongoing easy money and low interest rate environment could pose a new financial risk, but “it’s lower now.” Many companies have plenty of cash on their balance sheet and banks and companies are generally less leveraged.

The banker, who was speaking at a panel at the World Economic Forum in Davos, added that the threat of higher interest rates wasn’t worrying either. “The Federal Reserve isn’t going to withdraw overnight.” Overcapacity remains and there are no signs of wage pressures, he said, which are the kind of inflationary factors that the Fed considers when raising interest rates.

The Davos panel, called “The Next Shock, Are We Better Prepared?” proceeded at a typically low emotional decibel level until Dimon was asked about what he thought of Americans who had directed their anger against the banks for the bailout.

Dimon visibly turned more animated, replying that “it’s not fair to lump all banks together.” The TARP program was forced on some banks, and not all of them needed it, he said. A number of banks helped stabilize things, noting that his bank bought the failed Bear Stearns. The idea that all banks would have failed without government intervention isn’t right, he said defensively...