Jamie Dimon predicts “bad recession” due to coronavirus

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Dimon expects a “bad recession,” he wrote in a letter published on Monday, saying that in the worst-case scenario, gross domestic product could plunge at an annual rate of 35% in the second quarter and that ” A slowdown would last for the rest of the period. year. The unemployment rate could reach 14% in this environment.

But Dimon added that “this scenario is quite serious and, we hope, unlikely.” And even if the worst-case scenario is confirmed, JPMorgan Chase – the largest US bank in assets – still plans to lend another $ 150 billion to its customers.

“By recognizing the extraordinary extension of the new credit … and knowing that there will be a major recession, we are exposing ourselves to billions of dollars in additional credit loss as we help consumers and business customers through these moments difficult, “said Dimon in the letter.

Dimon stressed that the bank is in great shape and has a “fortress” balance sheet. This allows JPMorgan Chase ((JPM) step up lending to small businesses and consumers during this time of crisis.

The bank is now accepting loan applications from the Small Business Administration’s paycheck protection program after a stormy start to the process on Friday morning.

Banks were a problem in 2008. They can help this time

Dimon commended the Federal Reserve and other global central bankers – as well as lawmakers – for taking swift action to try to stimulate the economy with lower rates and tax support for those who needed it.

“We applaud the speed at which the federal government and the Federal Reserve … have put in place a stimulus package and other financial benefits to help individuals, businesses, and state and local entities across the United States and around the world.” beyond, “said Dimon.

JPMorgan Chase shares rose nearly 5% at the start of the session Monday. The bank should talk more about its development in its next earnings report, scheduled for Tuesday, April 14.

Criticize politicians

Dimon also had harsh words for American political leaders for the collective lack of preparation to manage the epidemic.

“The current pandemic is just one example of the poor planning and mismanagement that has hurt our country,” said Dimon in the letter, adding that “there should have been a pandemic manual.”

But Dimon stopped appointing particular political leaders, accusing the system by and large, as opposed to a political party.

“Although some people tend to point the finger and look for blame, I hope we can avoid that. I also hope that we can prevent people from using times of crisis to advocate what they already believe, “wrote Dimon.

“We must demand more of ourselves and our leaders if we are to prevent or mitigate these disasters,” he added. “It can be a time when we all come together and recognize our shared responsibility, acting in a way that reflects the best of all of us. “

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