Jamie Dimon Predicts 4% GDP Growth, Retracts Bitcoin Fraud Charge

JPMorgan CEO Jamie Dimon is in the news twice this morning, once regarding GDP and once for a Bitcoin retraction.

Jamie Dimon claims JP Morgan's chief economist is wrong about the economy: Dimon Predicts 4% Growth.

Dimon said he expects the “competitive tax rate” to encourage deal-making on Wall Street, pointing to Europe which he said is on pace to grow at a 3% rate. A reading of gross domestic product is slated for Jan. 26.

‘If we have a couple of years of good growth, that could justify the markets where they are. Four percent economic growth this year is possible’ , said Dimon.

J.P. Morgan’s chief U.S. economist Michael Feroli’s forecast for early GDP readings lands below his boss’s much loftier expectations, even factoring the tax cuts: “We boosted our 1Q18 real GDP forecast from 2.0% to 2.5%…following the recent passage of the tax package."

Meanwhile, Dimon also said he regretted calling bitcoin a “fraud”, but also said that he believed that blockchain, or distributed-ledger technology behind cryptocurrencies, is “real” but still thinks that digital assets like the No. 1 digital asset in the world is hyped.

“The issue, he said, is “what the governments are gonna feel about bitcoin as it gets really big, and I just have a different opinion than other people. I’m not interested that much in the subject at all.”

I fail to see how tax-cut "deal making" is going to do a damn thing for the economy. Here's what it will do:

  • Over-leveraged companies will buy other over-leveraged companies at ridiculous prices.
  • Companies will buy back more of their shares are at absurd prices.

As for a couple years of growth justifying the stock market, Dimon is full of more than hot air.

Finally, Bitcoin is a bubble, but it isn't a fraud. Dimon is the fraud.

Mike "Mish" Shedlock

Comments
No. 1-7
johnegordon
johnegordon

Well said, Mish!

Stuki
Stuki

If you conflate GDP growth with “the economy”, and measure GDP growth in such a way that commissions and other, whether explicit or implicit, cuts of “asset” transfer transactions, add more to GDP the higher they are, companies buying each other, and people buying and selling their decaying shack, back and forth at ever more ridiculous prices, does indeed boost “the economy.”

Of course, in reality, all the whole scam does, is lightly obfuscate stealing from those further from the pumped-up asset price nexus, in order to hand the loot to those closer to it. Dimon, like most of his clients, being situated very much in the latter group.

Mike Mish Shedlock
Mike Mish Shedlock

Editor

The yield curve is un-flattening - will cover it tonight

tedr01
tedr01

Exactly.

El_Tedo
El_Tedo

The yield curve is unflattening ...

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