Asks if Dimon is surprised markets have been sanguine about geopolitical disruption.
Lisa
Jamie Dimon
Not surprised. Wars since WWII rarely have long-term market effects except 1973 oil shock. Current geopolitics (Ukraine, Russia, Iran, North Korea, China) is more complex and could have an effect, but may not.
Asks about stagflationary shock risk given current disinflation comfort.
Lisa
Jamie Dimon
Inflation is the 'skunk at the party.' It has been coming down but may have leveled off around 3%. Many factors (medical, construction, insurance, wages) could push it up.
Asks how vulnerable the US economy is to a geopolitical shock.
Lisa
Jamie Dimon
Geopolitics and large global deficits are 'large moving tectonic plates' that may not affect the economy short-term but could be determinative in the longer run (5+ years).
Asks what the credit cycle will look like and what could crack it.
Lisa
Jamie Dimon
There will be a credit cycle, usually caused by a recession. Stagflation is very different from a normal recession. The coming cycle will be worse than people expect.
Asks how JPMorgan guards against a worse-than-expected credit cycle.
Lisa
Jamie Dimon
JPMorgan runs the company looking at a range of outcomes and can handle it. They tighten standards, want more covenants/collateral, do less subprime.
Asks about the mood being negative on the economy and credit, noting Dimon doesn't sound that negative.
Lisa
Jamie Dimon
There are big geopolitical and sovereign debt risks. Inflation is not beaten. The probability of something going south is higher than other people think. There's 'a little bit too much exuberance' in markets.
Asks if the bigger risk is inflation or an economic downturn.
Lisa
Jamie Dimon
Inflation can cause an economic downturn. History shows it's usually a confluence of events, not one thing.