(Lauren Hirsch / The New York Times) – JPMorgan Chase CEO Jamie Timon’s annual letter to shareholders was released on Wednesday morning, April 7th. This document, widely read on Wall Street, not only provides an overview of the bank’s business: it covers Timon’s thoughts on everything from leadership lessons to public policy recommendations.
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“The U.S. economy is experiencing a boom.” The combination of excess savings, scarcity costs, vaccinations and the “ecstasy surrounding the end of the epidemic” is expected to create a boom “easily accessible by 2023”. This would justify the high valuation of the shares, but not the price of US debt, given the “biggest offer” to reach the market soon.
He wrote that the rise in inflation was “more than temporary”, forcing the Federal Reserve to raise interest rates aggressively. He wrote that “rapidly rising rates to offset the heat of the economy is a common cause of the recession,” but he expects “a golden situation” of rapid growth, a slight rise in inflation and a moderate rise in interest rates.
“Banks play a lesser role in the financial system.” With the exception of “Amazon, Apple, Facebook, Google and now Walmart”, Timon cited the competition of already substantial shadow banking systems and fintech companies. He argued that these non-bank rivals should be more strictly controlled; He wrote that its growth was “partially possible” by avoiding banking rules. When it comes to strict regulation for large banks, he wrote that “the cost to the economy of having failure-safe banks is not worth it”.
“Chinese leaders believe the United States is falling.” The United States has faced difficult times in the past, but today, “the Chinese see the United States as losing land in technology, infrastructure and education – a country torn apart by politics, as well as racial and income inequality. , Currency, industry, regulation) could not be integrated, ”he wrote. “Unfortunately, there is a lot of truth in that statement.”
“The solution is not as easy as diverting fossil fuels.” Facing climate change does not mean “abandoning” companies that produce and use fossil fuels, Timon wrote, but works with them to reduce their environmental impact. He sees “low carbon, sustainable technologies and a great opportunity in businesses” and plans to assess customer progress in terms of reducing carbon intensity – emissions per unit of production – which adjusts to factors such as size.
Other important information (and views) of the letter are here:
– Due to the proliferation of remote jobs, JPMorgan may need only 60 workstations for every 100 employees. “This will significantly reduce real estate needs,” Timon wrote.
– JPMorgan spends more than $ 600 million a year on cyber security.
– Timon cites tax loopholes that the United States can provide: interest rates; Tax incentives for sports cars, private jets and racehorses; And reduction in land protection taxes for golf courses.
This is Timon’s longest letter at 35,000 words and 66 pages. The continued expansion of the letters – with the exception of a short edition last year, a few weeks after Timon underwent emergency heart surgery – can now be seen as a reflection of the range of issues that senior executives are now expected to address – or need.
(Translation by Renato Prilorentzo)