Jamie Dimon Outlines 2009 Concerns (JPM)

December 11, 2008 by Douglas A. McIntyre

Money_stack_picJamie Dimon, CEO & Chairman of JPMorgan Chase & Co. (NYSE: JPM), gave an exclusive interview today to Erin Burnett on CNBC   He gave some interesting data on his outlook for what lies ahead in the banking sector and for his bank.

There is a reason that Dimon was one of 24/7 Wall St’s CEO’s Of TheYear.  First, he essentially said that the $25 billion given the company under the first TARP funds was not his choice.  As manyhave noted, this was forced upon banks.

For 2009, Dimon expects unemployment to drive commercial losses andconsumer losses.  He even noted that "if we are lucky" it would getworse for another two quarters and then start to see some improvements.But he did emphasize that that would be under the "lucky" case scenario.

Erin Burnett also pointed out how about 60% of re-worked mortgages arecoming back into foreclosure.  Dimon said he thinks that JPMorgan isonly about half of that rate, or 30% so far.

Dimon said it is possible that housing could go another 20% or 10% below where prices are today.  But he did not know where that will really go. 

On an Obama stimulus plan, Dimon wouldn’t comment on the size.  Butwhatever it is should be done soon and then we need to get the economystable now.  A massive tax cut should be in the toolkit, but only forthe lower income people.  On infrastructure, Dimon believes thatinfrastructure spending is needed but doesn’t know how fast thoseprojects can start. He hopes there is no "bridge to nowhere."

As far as a brokerage unit, Dimon saidhe does not consider a huge brokerage unit as mandatory with all theadded expenses.  He said it is "not a strategic imperative" forthe company.  He also does not believe that it makes sense for twomajor investment banking firms to merge because of charges, clientlosses, and layoffs.

2:42 PM UPDATE………Erin Burnett also discussed the company’s quarter and how that was shaping up. Dimon did not give any specific numbers, but he said "November" was a terrible trading month in the usual suspects and said December was looking that way too.  As he said before, he still expects loan losses to rise.

Jon C. Ogg
December 11, 2008