Annual Meeting 2015 Interview with Jamie Dimon & George Barrett

Yeah, so I, you know, welcome, it's a thrill to be back here again. And I did, I came here as like April of '00. Bank One, First Chicago had merged, it was failing, the stocks were down, everyone hated each other. You know, we had a, I probably had to lay off a lot of people, and you know, you have to fix a company. So I took my, I made a quick trip around to the major places we did business, Columbus being the primary one, and I visited the mayor, I visited John Wolf at the Dispatch, everyone was mad at me that somehow I wasn't yet to blame for the problems of Bank One. But the amazing thing was you come back here like none of this stuff was here, folks. This wasn't here. The Hilton Hotel wasn't here, most of those restaurants weren't here. The growth has been just outstanding. And as an employer, Columbus has been just a fabulous place of employment. People, I don't know if you know our Polaris Center, this now 10,000 people. We renamed the John B. McCoy Center, John G. McCoy Center, and we have other operations here. But it's been a fabulous place. Unemployment here is like 3%. So when I come back to a place like Columbus, it just reminds me.

You know, people move on, they build their business. Look at the wonderful small business up here, expanding, recruiting, hiring, participating in the community, which I think is a wonderful thing to do. So it's been, you know, we've been part of the growth of it, but it's also because it's so good here that we have so much here.

Yeah, so we, you know, and like one of the folks who got an award up here, we both threw the money and the real time. And so we have a lot of smart people working these issues. Workforce readiness is a huge issue in the United States, it's a huge issue around the world. So we're doing a huge multi-year study, it's global, so we hope to learn from around the world. So Germany, by the way, is the best at taking you from high school into vocational training to a job. They dwarf us. And some of the best ideas, what we hope to do is take the best ideas from Columbus and make it national or international. And so we announced one today, but we're going to be announcing successive ones periodically. And you know, it basically gets people jobs, and it's got to be done locally, by the way. The local businesses have to hook up the local high schools, local community schools, the local training, say what do we need, and train the kids. They have jobs when they get out as opposed to, you know, just debt with no jobs. So it's a big effort. We estimate that two million jobs would be filled in the United States today had it been done properly.

So you have to remember, small business and big business are symbiotic. And job growth doesn't come from one or the other, even though it's a very common thing to say small business creates jobs. What ultimately creates jobs is capital expenditures. And so the United States, think of it, it's almost a $2 trillion a year plant, equipment, etc. Half of that comes from the Fortune 1000. So when the Fortune, when anyone makes a plant, in that plant is so many jobs, outside that plant is usually five to ten times the amount of jobs, often a small business. And so we're one of the largest small business lenders in America, probably maybe the largest in America. There are 20 million small businesses, something like 17 million are one person. But you know, the small business segment is a vibrant segment, it's a growing segment. You listen to the people here wherever you go and they're just moving on, they're trading more branches and more products and more services. But it is symbiotic, and what we have to do as a nation is just continue to foster small business, middle market companies, capital expenditures, and you know, do things like make sure we keep our capital here. Like, you know, government tax policies do send a lot of capital overseas, which is a huge mistake.

So let me give you the big picture view because people forget it, you know, when you read too much of the problems out there. The United States has the best hand ever dealt of any country on the planet today. It's got the best military, and it will for years. It has the best big, medium, and small businesses. If you travel around the world, that's not true. Some are just huge businesses, some they don't have big businesses at all. And there's no successful country without large, successful, big, global type of companies. It's got the most innovation, from Steve Jobs to the factory floor. We teach people to contribute, make things work better. So it could be the receptionist or the teller or the factory worker who comes up with that one thing that makes things more efficient. We have the widest and deepest capital markets the world's ever seen. I'm not talking about banks, I'm talking about venture capital, I'm talking about individual investors, public markets, private markets, Wall Street, asset managers, private equity, you name it. We have great, very low corruption. I travel around the world, I don't worry about corruption in the United States. You could be damn sure you worry about some of the countries I have to go to. And so, great work ethic still. You go to any American city, people like to work. So we've got it all. Our future is very bright. And if you don't believe me, read Warren Buffett when he talks about the resiliency of this country, and he'll throw in there probably too the resiliency of the government system. So as much as we talk about gridlock, you don't question whether it's going to be a democracy. You may not like who you voted for or something like that, but you don't question that. And so, very good long-term hand. Right now we're doing quite well. You know, we're going to 2.5%, it should be faster. You know, business is vibrant, we're adding jobs, we added a million jobs in the last three months or four months. It's the only difference now is if you ask me why is it not faster, it's just reams of bad policy. Bad immigration policy, bad tax policy, bad, you know, we had government shutdowns and all these silly things, just shooting ourselves in the foot. And I don't blame, I'm not going to sit and blame Republicans and Democrats, I blame them all. It's, you know, to me it's just been wasting a lot of time pointing fingers and not collaborating. And that's another great example, you know, because Mike Coleman who's been a great mayor and has been the mayor for almost 16 years, well look at the collaboration. He's a pro-business Democrat, you know, and that's a great thing. You know, businesses do something bad, punish them, but in the meantime most of them really want to do good stuff and they want to contribute to the community. So that's what we need a little bit more of, is collaboration between the federal government, companies, and just a few wise policies, and we will be booming. That's not to say that we have divine right to success, we don't. So you know, if we don't fix immigration, infrastructure, inner city school education is a damn disgrace in America. Half the kids do not graduate and they're mostly poor minority. And I don't know about you, I find that an embarrassment for a country like ours. And there are a bunch of other things we just have to get done to maintain our position.

Well, yes, I think bad policy could be a derailer, but I don't see that happening now. What we see now is that the government is kind of making a little bit of progress step by step. They're arguing, but they had a, they call a cromnibus bill, but a budget bill for the first time in I think five years. Maybe we'll make a little bit of progress in immigration, maybe we'll make a little bit of progress in taxation. So I don't see the political system is derailing us. It's better than it was, and you do see some rational people trying to make some progress there. The biggest derailer, if you look at history, is geopolitics, is the one you're scared about the most. And so you talk about Ukraine or Greece, the Eurozone, or something like that. And I would tell you those are legitimate things to worry about, but unless they get a lot worse, they're not going to derail the United States economy. And one of our economists made a list of all the conflicts out there. Remember there have been multiple wars in Afghanistan, there's Chechnya, Georgia, there's the Vietnam War, the Korean War, there was several wars in the Middle East. Of all those things, only one caused a recession, that was 1973 Suez Canal Crisis, oil price, etc. So unless, and this morning they announced hopefully a real ceasefire in Ukraine, unless something goes terribly wrong, those things aren't going to derail it. They will make you nervous, and of course if you talk about Iran, you're going to worry more about the people than the economy. But in economic terms, I don't think those things are going to derail us quite yet.

I'll give you a quick tour around the world. And you know, we do business in like 150 countries, we're on the ground in something like 60. So I won't go through each country, just through the major ones. China. China, in my opinion, for economic things, will meet its 7% objective growth. Why? They have the wherewithal. They've got $4 trillion in what we call unused reserves, and two-thirds of it is in US dollar securities, basically. And they can macro-manage in a way that you can't to the United States. And macro-management kind of works when you're still a developing nation. And so they'll meet those terms. I do believe if you're doing business there, that sometime from the fourth year to the 15th year out, they are going to have major issues. They can't macro-manage forever. They've got to bring out the democracy, you know, you always worry, huge corruption issues. They know about these problems, they are very sophisticated people around that country. But those problems will cause bumps in the road down the road. Europe. Europe is sick, okay? And Europe is going to be sick for a long time. You know, it's just really hard to get 19 nations to agree to fiscal policies and social policies, and they're directly related. You know, the entitlement policies in all these countries have to be, if they're not common, you're going to have real problems. You know, banking policies. The logic was always good, let's have peace on this damn continent. We've had wars, you know, the 100-Year War, the 30 Years War, the Franco-Prussian War, the first Franco-Prussian War, the First World War, Second World War. Well, hell, I think it's a good thing that the people got together and said let's have peace. So when you look at the Eurozone, don't just look at it as scans. And then they came up with the common market, and you know, the Eurozone, the Euro may have been a mistake, but they can't go backwards. They got to make it work. So the thing about Europe is, in terms of the economy though, it'll probably do better in 2015 than 2014, marginally. So it's not a negative on the global economy. And the same thing about Japan, I won't go through it, it's also going through its own growing pains, but it'll probably do a little bit better in 2015 than 2014. And the emerging markets are all different, but in total, we probably, we'll be okay. Some will shrink a little bit, but they'll probably be okay.

So Russia, you know, Russia is really confusing, okay? And you know, we've announced we've got exposures there, and whatever happens, we're going to be fine. And we all had kind of made the bet that Russia would join the industrialized world, and it had, and now we've had this huge kind of setback in what that policy is. Like I said, I don't think Ukraine is going to derail Europe or Russia unless it gets far worse. So that's, unless it spills over, that NATO somehow has to start putting troops in to defend other nations. But you remember we had civil war in Georgia and Chechnya, and it was fine. They were in Afghanistan for 10 years, and it was fine. There are some real dangers in Russia, and so we keep a close eye on it. Russia itself will be shrinking this year. You know, they've caused themselves huge economic issues. If we don't have peace there, the American government is going to raise sanctions. There are some sanctions that could really hurt, really hurt, and then might actually cause the next round of problems. The issue, I heard Henry Kissinger speaking the other day, and you know, he just, there's an unpredictability to Vladimir Putin, and you know, we just got to keep that in mind.

It is so neat. I don't know if you can know, she did, I have a granddaughter, 10 months old, and you know, wherever you are in the world, you do this FaceTime stuff and have a little chat, and the baby who's only 10 months old recognizes you on the screen. It's really kind of cool.

So the stay together, I mean, that's an irrelevant subject to me. The subject you always should look at business not from what you want, but from the point of view of the client. So if we can come to Columbus and provide small business, middle market, big company banking, which we do with you, in a cost-effective way where you're gaining share, that's what determines whether the model works, not what I want. The model clearly works. We have some of the best businesses in the world, and they were not 10 years ago. We have some of the best returns, we dwarf most our competitors. We're gaining share in credit card, consumer, commercial, small business, middle market, investment bank, global banking, fixed income trading. You know, we're doing great. Now we do have huge issues that we got to deal with, and some self-created, and some, you know, just got to navigate through the regulatory environment. Having said that, you know, you don't want a too big to fail company. It's a mistake to have a company if it fails it hurts you, and that did happen. Now it didn't happen with JP Morgan. We did not need government money, we were not bailed out. It's a lie that all banks needed TARP. But the fact is some of these did, so we should recognize we had a crisis. Part of it was in the financial system, and you need reform, you need good regulations. And I always talk about having good, not just more. So we supported a lot of the regulations. I don't support all of them, but hell, there are thousands of them. I've never met anyone who supports all of them, because you couldn't even take, you like, probably the rest of your life to read them. And so we support it. We should get rid of the concept. I call it, should have been bankruptcy for big dumb banks. Put them out of their misery, bury the name, fire the board and the management, claw back their comp. I agree with all that. I'm on the side of the American public, and we're trying to put structures in place to make that so it's believable. And the whole issue is do you provide service for clients? You need, there's another one, you need big global banks. So you know, I love these banks that, you know, and you need community banks. You know, the ecosystem that we have is really, really complex. You know, we're not all going to be in every community with every product and every service doing everything. So you provide where you can. But globally, we do business with you guys, I should have checked, probably in 10 or 20 countries. We move six to ten trillion dollars a day. We can finance a two billion dollar bridge loan over a weekend because someone wants to do something confidentially. When we raise capital for clients, we can raise it in five different currencies in seven different locations. And so we raise, you know, for clients huge sums of capital for the client. And so it's, and we consolidate your cash all around the world. And so these are very complex things. You should keep them as simple as possible. But I really do mean this, it would be a real shame if our policy in America dismantles a JP Morgan Chase and the bank you're dealing with in 10 years is China Construction Bank. And someone's going to say what the hell happened to our JP Morgan Chases? And I really do believe that. But the way, and the Chinese banks are coming, they're now twice our size, and they have a natural market, their own company. So but so we're trying to navigate the regulations, you know, deal with the new capital requirements, and we're fairly convinced we can do that and serve our clients well and earn a good return for ourselves. We were a port of safety in the storm. I remind a lot of people that we bought Bear Stearns at the request of the United States government, and let me tell you, it scared the hell out of me. But in '09, we rolled over a trillion dollars of loans, and we didn't call you up and say we're going to roll them over at 1,000, over 1,500, over, that's the market price. Because if we didn't treat you like a, we have to be steadfast, and we got to be there for you in good times and bad times. That's true whether you're in India or in Columbus. And so the banks were there, most of the banks were there. And Jon Stewart who was making fun of me on TV because I said that publicly, said, 'There's Jamie again, we were on Wall Street, you need me on the wall.' Well, I hate, and I find it very funny, he's right. You needed your banks to be there for you in tough times. I know a lot of examples the banks backed out and companies didn't survive. So you know, you want a strong system, but you also want a system that isn't so much market-based that the second, if you're borrowing from a hedge fund, they ain't going to be there in the dark moments. I work with a million hedge funds, they can't be there in the dark moments. I will be there in the dark moments for you.

Well, you know, management is, I think, kind of a relentless process. So I guess first, like someone said to me, what changed in the crisis versus before? Nothing. It's like if you're not prepared for tough times, you're not going to be, you can't like get prepared when times get tough. Like you need the army before the war starts. And so that means a disciplined group, they know what they're doing. The only real difference is that our risk committee used to meet once a week for a couple hours, and in the crisis it met at 7:00 a.m., 12:00, you know, lunchtime, 5:00, 10:00, 5:00 a.m. if it had to, 24/7 for six straight months. And we didn't say, it wasn't very formal, we said hey, if you got a problem, go to the meeting and bring the people you got to have. And everyone shares the reports and shares the information, tries to react very quickly. But I think the most important thing about management is that people can speak up, people get real information. Fire the okay people, because I'm sure you've all put up with them, but they will destroy your company. It doesn't take many of them. And it's not about them. You know, people have these meetings and it's like after the meeting they say I got to come see you. They always have to come see you after the meeting. Say why? Well, I didn't want to say in front of everybody. But there's only really, unless it's really personal or confidential, you say no. If you can't say it in front of everybody, you shouldn't be getting the big bonus you're getting, because the answer should be here's what I think for the following reasons. Why? You got to deal with conflict, lay the issues out, have constant, you know, constant conversation about it. Fabulous information. You know, if you don't know where you're making your profit, you can't make a decision. You may make a decision to something that's not profitable, I do it all the time, but you will be making the wrong decision if you have no idea. And you got to do it country by country, product by product. Give the people who run the businesses authority. Don't let them make excuses about like if you work for me, it's your agenda. You're going to be with me every single month, and it better be anything important. It could be marketing, sales, production, ops, systems, tax. You can't say, you know, is it revenues or expenses, or you know, we didn't invest in that technology because we couldn't afford it in the budget. If you ever said to me we didn't invest in important technology because we couldn't afford it in the budget, and you didn't make that clear at the time, honestly, I would probably pull you aside and said you probably shouldn't have that job. Lay it out, all of it, and then deal with it, and then make decisions that make sense for the company. Forget quarterly profits. Forget quarterly profits. And you know, I don't think most companies are that driven by quarterly profit. Like you make decisions all the time, if you made them just for quarterly profits, you'd be in trouble. You know, and most of your profits in any one quarter are based on decisions you made for years. Keep your best. Why do people stay? Because they're treated with respect, they can treat their clients with respect, they know they can call you, and they know you're busy and you ask for them. And so there are all these things that make a company work that are just critical.

It's hard to do. The other thing about some of these politicians in a business, by the way, I always said they're experts of being politicians. They've been doing it for 25 years. So the CEO doesn't always notice it himself because they're busy kissing up to you. You got to get around and you find out that they don't respond to Jim Maltz, that they sound great here but not serving people there. No one in the company actually works for me. So if you're in HR, finance, systems, legal, ops, hell, you're not working for me, you're working for Jim. If he says you don't return his phone calls, I would get really irritated. You know, and so that's how you find out the people. You know, they kiss up and they kick down. So you really got to seek out the bad people, and then those are the hardest decisions. But honestly, if you don't make them, that's the ones that will set your company back for a decade. This issue about having, and some of these folks know me and I talk about this, good news always flows up really fast, right? Bad news, if you're in a crisis and it's not happening real time, or there's that 'we need to talk after,' you got a problem. Absolutely. And they got to make a phone call. Like you, I read everything, but if they say to me why send you an email about it, I would say to them phone call, like 24/7, if it's bad, immediately. You know, as opposed to you sent me a little note saying I think we may have an issue in Ukraine or something like that, that's not going to wake me up at night. You know, and so familiar turf.

Well, you know, obviously, you don't really know. I mean, I tell people a lot of CEOs, there's no road map really when you get there. Things are always different than it was for your predecessors. And obviously the first goal is to manage the company. The first thing I was worried about was my children, wasn't about me. I just wanted them to grow up normal and not, you know, arrogant and not thinking they're entitled. And I think I've succeeded, thank God. But that to me was always the word, don't screw up your family because you run this big company. But I always tell people it is your job to take care of your, if you have a job, you know, and we all spend a lot of time there, but it's your job to take care of your mind, your spirit, your body, your soul, and your family. And you've got to take that officially. So I do. I've always taken my vacations, I've always had my family trips, I always, you know, cut something short for the family. This phone 24/7 is used for emergencies and children and my wife, that's it. And so I do, I read, I do a lot of stuff, I exercise, I try to take care of myself all the time. And you got to make a real effort. And any and all your jobs, forget just what my job is, jobs are stressful. You know, dealing with conflict is stressful, and it can make you sick. So if you don't do those things, you will get sick. And if you need to ask for help, you should ask for help. And so we try to help our own people, but if they're not doing it on themselves, it's not going to work. And then, you know, I obviously went through a health thing recently, which, you know, is terrifying. And of course, I had to think about, I couldn't be walking in and out of hospital getting cancer treatment. And so I do want to make a couple of quick things. I've asked many times about what did it change, and it didn't really change me that much. You know, and now I have a clean bill of health. I'm five months after treatment, and the treatment is radiation, it's pretty tough. But I always thought the most important thing in life is family, and I didn't change that. People hear me, the second most important is country and humanity. Country, because I love this damn country. And I thank you, that immigrant who said this is why I wear red, white, and blue. Okay, we've hired 8,000 veterans. There is no better country, and I'm unabashed about it. When I go to Davos, I tell all those anti-Americans, you know, when we like, we have our troops defending them all the time. Not that we don't have flaws, you know, three of my grandparents came from Greece, though you can't blame me for what happened over there. And we'll try. But down here is business. But the fact is, the most I can do for family and my kids, I said they would cap their time with me, the most I can do for country, humanity, the people, our company, opportunities for people, hiring 8,000, just run a great company. I'll help my country, I help countries around the world. And I want to say one other thing. How many of you in the medical profession? Well, I mean, thank God for it. Because I tell people, I went to this hospital here, you are, see, I have no idea what they're doing. I just said to them, just do what you would do for your father, your mother, your brother or sister, and I'll do my part. And having been touched physically by hundreds of people, phlebotomists, MRI, CAT scans, biopsies, the radiologist team, the oncologist team, the chemotherapy team, the guards, the people who manage this equipment, sonograms, they were fabulous, each and every one of them. It's an amazing experience. And somehow they, you know, I hear this a lot of hospitals, by this, I went to Memorial Sloan Kettering, but they do act like that. I feel those are all different, but they all know what you're going through. They all smile when you come in, they all always asking if you feel good and explaining what they're doing. And so I just, having been through it, the medical system in the United States is also the best in the world, and God knows it's saving people's lives left and right.