Latest news with #JamieDimon
Forbes
6 hours ago
- Business
- Forbes
Will The ‘Beautiful' Bill Increase The Deficit?
NEW YORK - FEBRUARY 19: The National Debt Clock is seen February 19, 2004 in New York City. ... More According to a Treasury Department report, the U.S. governments national debt, the accumulation of past budget shortfalls, reached a total of more than $7 trillion for the first time. (Photo by) The performative exchange of military strikes between Iran and the US means that a nuclear tipped hot war in the Middle East is off the cards for the moment, though the bad news is that a far greater crisis awaits. In the past five or so weeks prominent financiers – Ray Dalio, Jamie Dimon and even Elon Musk – have warned about the burgeoning fiscal deficit and the mountain of debt that the US (and other countries) has accumulated. A very decent blog post by Indermit Gill, the chief economist at the World Bank, outlines the viewpoint. Next week, there is a good chance that the Senate passes President Trump's budget, which according to the independent Congressional Budget Office (CBO) will swell the deficit by close to USD 3trn and push debt to GDP towards an unprecedented 125% in the next ten years Additionally, rumours that the next Federal Reserve chair will be picked soon by President Trump (Powell leaves in May 2026) has upset the dollar, making life even more difficult for foreign holders of US debt. What is interesting is not how gargantuan the world's debt load has become, but how few people care. Politics in the West has changed so much that it has neutered what used to be a political class who in a very Catholic way, pronounced themselves to be fiscally responsible. In the US, it used to be the case that a good number of Senators were what was called 'fiscal hawks', or had an aversion to large budget deficits, and an even greater aversion to resolving them through higher taxes (the US has only produced budget surplus twice – under Lyndon Johnson and then Bill Clinton – and in both cases taxes were raised). Paul Krugman has referred to deficit hawks as 'deficit scolds', because the spend more time warning about the dangers of the deficit than fixing it. Ronald Reagan, and the policy makers who surrounded him – namely James Baker, Nicholas Brady and Don Reagan, were fiscally conservative by reputation but had the luxury of being able to grow the US economy through tax cuts and de-regulation. At the time (early 1980's onwards) some Republicans had a 'starve the beast' mindset, which is to say that they favoured lowering taxes so that the government would have less revenue to spend, but there is little evidence that this worked as a strategy (partly because many of the initial Reagan tax cuts were aimed at the rich). In the post Reagan phase, deficit reduction as a virtue came into its own in the Robert Rubin era (at the Treasury), and many of his former colleagues and acolytes continued this during the early years of the Obama presidency (a relevant private body is the Hamilton Project, where Rubin was a founder). One of the notable initiatives of the Obama White House was the creation of the US National Committee on National Fiscal Responsibility and Reform or the Simpson-Bowles Commission as it became known, a bi-partisan body that aimed to reduce the fiscal deficit and debt. Its most noteworthy aspect, in my memory, was the degree of civility and collaboration between representatives of the Democrats and Republicans. Such a body could not exist today. Indeed, the radicalisation of parts of both parties, in the context of quantitative easing (which has dulled the impact of rising debt and deficits) has broken the link between fiscal responsibility and electability. For example, the first crack in the Republican edifice was the advent of the Tea Party Movement, one of whose tenets was tough fiscal responsibility, as inspired by a 'Chicago Tea Party' rant from CNBC commentator Rick Santelli in 2009. Many of the Tea Party oriented voters and Republican politicians then gravitated to the Trump corner in 2016, the price of which was a surrender of their fiscal sacred cows. Today there is only a handful of fiscally conservative Republican Senators (the Club for Growth publishes an annual scorecard of how fiscally rigorous it thinks members of the House and Senate are). The majority of Republican Senators appear happy to give the nod to a policy that edges the US closer to the financial precipice. Indeed, not only will the Trump budget favour wealthy households but it will increase the number of financially precarious households, and damage healthcare and education provision. The other interesting observation I draw is that the relationship between debt and politics has now reached a turning point, and from here debt will condition politics. I see this happening in at least three ways. The first is that in the context of 'zero fiscal space' the constraints imposed by high levels of debt and deficits, will drive new splits within parties, for example between those who are keen to spend more on defence, versus those who wish to preserve social welfare safety nets. The revolt by a large number of Labour MPs against benefit cuts imposed by Keir Starmer is an example. In the future, this cleavage may inspire new political parties. To echo a recent note (The Power Algorithm) new 'tech bro' parties could materialise that prefer using robots to do the work of immigrants and that technology should be deployed for social control. The second, related scenario is that in the absence of money to spend, the traditional 'pork barrel' cycle of politics disintegrates, and instead politicians tilt the broad political debate to non-fiscal issues – identity, foreign policy, and immigration. A third element in the hypothesis is that voters observe mainstream politicians to be helpless and useless in the face of very high fiscal constraints, and they become largely apathetic about politics and in some cases vote for extreme candidates, such as 'chainsaw economists' as in the case of Argentina. In this way, and perhaps exceptionally in history, the coming debt crisis (if the World Bank's economist is correct) will be intertwined with the current crisis of politics.
Washington Post
a day ago
- Business
- Washington Post
Exploding U.S. indebtedness makes a fiscal crisis almost inevitable
Jamie Dimon, the CEO of JPMorgan Chase, was more tantalizing than illuminating when he recently said, regarding the nation's fiscal trajectory, 'You are going to see a crack in the bond market.' Details, even if hypotheticals, would be helpful concerning the market where U.S. debt is sold. Twenty-five percent of Treasury bonds, about $9 trillion worth, are held by foreigners, who surely have noticed a provision in the One Big Beautiful Bill (1,018 pages). Unless and until it is eliminated, the provision empowers presidents to impose a 20 percent tax on interest payments to foreigners. The potential applicability of this to particular countries and kinds of income is unclear. It could be merely America First flag-waving. But foreign bond purchasers, watching the U.S. government scrounge for money as it cuts taxes and swells the national debt in trillion-dollar tranches, surely think: What the provision makes possible is possible. Such a significant devaluation of foreign-purchased Treasury bonds would powerfully prod foreign investors to diversify away from Treasurys, which would raise the cost of U.S. borrowing an unpredictable amount. Concerning which, Kenneth Rogoff is alarmingly plausible. Before he became an intergalactically famous Harvard economics professor, and a peripatetic participant in global financial affairs, he was a professional chess player. Hence his penchant for thinking many moves ahead. 'I have observed that, although the financial system evolves glacially,' he writes in his new book 'Our Dollar, Your Problem,' 'the occasional dramatic turn is to be expected.' What is expected is considered probable. The nation's exploding indebtedness could presage a 'dramatic turn.' 'The amount of marketable U.S. government debt,' Rogoff says, roughly equals 'that of all other advanced countries combined; a similar comparison would hold for corporate debt.' Furthermore, when in 2023 Silicon Valley Bank and some other small and medium-size banks became actuarially bankrupt because of rising interest rates, the Federal Reserve created a facility that implicitly backstopped potential capital losses of all banks, estimated to be more than $2 trillion. The facility has gone away, but the mentality that created it remains. Therefore, so does another potential large increase in government debt. 'The U.S. government has continually increased the size and scope of its implicit bailout guarantees,' Rogoff writes, 'creating what might be termed 'the financial welfare state.'' Those of the 'lower forever' school of thought regarding interest rates are serene about the challenge of servicing the national debt. Rogoff, however, notes that when Ben Bernanke left as Federal Reserve chair in 2014, Bernanke, then 60, 'reportedly began telling private audiences that he did not expect to see 4 percent short-term interest rates again in his lifetime.' Eight years later, such rates reached 5.5 percent, and long-term rates have risen significantly. Rogoff thinks today's higher rates are likely the new normal, resembling the old normal, for many reasons, including 'the massive rise in global debt (public and private).' And 'if the worldwide rise in populism leads to greater income redistribution, that too will increase aggregate demand, since low-income individuals spend a higher share of their earnings.' This would be an inflation risk. Rogoff warns that many believers in 'lower forever' interest rates express the human propensity to believe in a 'supercheap' way to expand 'the footprint of government.' The nation is, however, 'running deficits at such a prolific rate that it is likely headed for trouble.' He rejects 'lazy language' about U.S. government debt obligations being 'safe.' Debt is a temptation for inflation, which is slow-motion repudiation of debt compiled in dollars that are losing their value. (Ninety percent of U.S. debt is not indexed for inflation.) When President Franklin D. Roosevelt abrogated the gold standard backing the currency, the Supreme Court ruled it a default. Also, holders of U.S. bonds were not safe from significant losses during this decade's post-pandemic inflation, or from huge losses during the 1970 inflation. Investors watching U.S. fiscal fecklessness might increasingly demand debt indexed to inflation. 'How sure are we,' Rogoff wonders, 'that no future president would seek a way to effectively abrogate the inflation link out of frustration' that it impeded 'partial default through inflation.' A president could call this putting America first. Projecting the exact arrival of an economic crisis is, Rogoff writes, 'extremely difficult,' an uncertainty shared with medicine. Physicians can identify factors that increase risks of heart attack in patients who nevertheless escape them. And low-risk patients can suffer attacks after being deemed fit as fiddles. Still, today reasonable fiscal physicians discern not just a risk but a high probability of a debt and/or inflation crisis.
Times
2 days ago
- Business
- Times
How Jes Staley's gamble to save his reputation backfired
F or much of Jes Staley's more than four-decade career in international finance, his clean-cut reputation appeared to be beyond reproach. Jamie Dimon, the Wall Street veteran who runs JP Morgan Chase and was Staley's boss at America's biggest bank, said 15 years ago that his former protege had 'impeccable character and integrity'. At the same time, a senior executive at one of the biggest pension funds in the United States described Staley as a man who eschewed 'innuendo'. 'There is no grey area,' Britt Harris, who was then chief investment officer of the Teacher Retirement System of Texas, said in a profile of Staley in 2010. 'He has a well-developed sense of right and wrong.' He was lauded as 'a man of enormous integrity' in 2015 by John McFarlane, who was chairman of Barclays when Staley reached the peak of his career: the role of chief executive at the FTSE 100 bank.
Time of India
3 days ago
- Business
- Time of India
Jamie Dimon warns of a scary global labour crisis: JPMorgan CEO says 'world is short on skills, not people'
At a time when Gen Z is being warned of a so-called 'job-market bloodbath', JPMorgan Chase CEO Jamie Dimon has made one thing clear: there are still jobs—just not enough skilled people to fill them. 'There are some areas where businesses are short on skills and desperately need young people to plug that gap,' Dimon said during the Business Roundtable's CEO Workforce Forum. The real challenge, he stressed, isn't the number of graduates entering the market—but what they've actually learned. Jamie Dimon warns of a skill gap labour crisis Dimon didn't mince words. 'We are short on labour,' he said, 'but we all have needs for cyber, we all have needs for coding, we all have needs for programming, we have needs for financial management and program management, things like that.' Despite companies like Amazon cutting staff due to artificial intelligence, and warnings from tech leaders such as Anthropic CEO Dario Amodei that AI could replace half of all entry-level white-collar jobs, Dimon insists that students who gain skills in high-demand areas still have solid prospects. Live Events Education must focus on employment, not just degrees Dimon has long criticised the education system for falling short of job-market needs. 'Too much focus in education has been on graduating college… It should be on jobs,' he told WISH-TV. 'I think the schools should be measured on, did the kids get out and get a good job?' This isn't a lone voice. Over 250 CEOs—including Microsoft's Satya Nadella, Airbnb's Brian Chesky, and Salesforce's Marc Benioff—have signed an open letter to lawmakers, urging them to make computer science and AI education widely accessible in schools. Their reasoning is direct: 'A basic foundation in computer science and AI is crucial for helping every student thrive in a technology-driven world. Without it, they risk falling behind.' The widening skill gap and the urgency to close it Backing Dimon's argument is the World Economic Forum's Future of Jobs Report 2025, which found that 63% of employers identify skill gaps as a top barrier to business transformation. By 2027, nearly 60% of workers will require retraining, particularly in areas like artificial intelligence, analytics, creative thinking, and resilience. The WEF projects that by 2030, 39% of essential job skills will be outdated. More alarmingly, it estimates that 10 million jobs worldwide could remain unfilled due to a lack of qualified workers. This, Dimon argues, could slow growth not only in technology but also in healthcare, financial services, and advanced manufacturing. Bridging the gap starts in classrooms Dimon is urging employers not to sit back. 'What you're truly lacking are the necessary skills,' he said, calling on companies to partner directly with schools and universities. It's about rethinking what education should deliver—and how quickly. He added, 'We must dismantle the barriers between education and employment. It's crucial to establish a system that supports lifelong learning, adaptation, and career growth—not just initial job placement.' The idea is simple: students should graduate ready for the demands of real-world jobs—not just holding a certificate. A payoff for skills: The data speaks Dimon's push is not without evidence. A University of Maryland study found that students who take a high school computer science class earn, on average, 8% more in their first job. While AI tools like ChatGPT have made it easier to generate code or content, Dimon believes that basic tech skills still matter—and will continue to matter. 'If you look at kids,' he said, 'they gotta be educated to get jobs.' It's not just what you know, it's who you are But technical expertise isn't the only thing on Dimon's radar. Gen Z workers, he noted, must also develop professionalism, communication, and reliability. These are often the deciding factors in hiring—and keeping—a job. At JPMorgan, character still counts. 'It almost doesn't matter to tell you the truth because you're looking for smart, ethical, decent people,' Dimon told The Wall Street Journal. His view is shared across corporate America. The message is blunt: a degree alone won't cut it—but the right mix of skills and values will. For Gen Z, the job market may seem full of contradictions. Automation is replacing roles, yet employers are scrambling to hire. Dimon believes the disconnect can be resolved with action—not alarm. Students who choose to study cybersecurity, coding, project management, or financial literacy can still build lasting careers. But the time to act, he warns, is now. Because by 2030, if the skills gap remains, millions of vacancies will stay open—and young professionals may find themselves shut out, not because of who they are, but because of what they weren't taught.
Yahoo
4 days ago
- Business
- Yahoo
Chicago-based Northern Trust said it plans to remain independent, despite reported BNY merger talk
Northern Trust, the oldest major Chicago bank left standing on its own in the age of consolidation, said it plans to remain independent, despite reports that New York-based banking giant BNY reached out last week to discuss a possible merger. Top executives at the banks had at least one 'extremely early stage' conversation, perhaps as prelude to a formal bid by BNY to acquire Northern Trust, a source familiar with the matter said Monday. The potential merger discussion was first reported by The Wall Street Journal. A BNY spokesperson declined to comment Monday, while a Northern Trust spokesperson issued a statement essentially declaring that the Chicago bank is not for sale. 'While our policy is to not comment on market rumors, I can tell you that Northern Trust is fully committed to remaining independent and continuing to deliver long-term value to our stakeholders, as we have for the past 135 years,' the Northern Trust spokesperson said. News of the potential merger played well on Wall Street on Monday, with investors boosting Northern Trust's stock to a 52-week intraday high. The stock closed up about 8% to $120.81 per share, giving Northern Trust a market cap of $23.5 billion. BNY closed down about 2% to $89.63 per share, with a market cap of just over $64 billion. If a deal gets done, it would create a top-10 national bank in combined assets, but could cost Chicago another legacy banking headquarters. A source familiar with the discussions said New York would likely be the home for the combined entity. BNY is the 12th largest bank in the U.S. with $356 billion in consolidated assets, according to the latest Federal Reserve data. That's just ahead of BMO, the largest Chicago-based bank, which has $257 billion in consolidated assets, according to the March 31 report. Northern Trust, the second-largest Chicago-based bank, is ranked 25th with $165 billion in consolidated assets, according to the Federal Reserve data. Founded in 1889, Northern Trust is a quintessentially Chicago institution, and the longest-tenured major bank born and headquartered in the city. Meanwhile, other legacy Chicago banks have answered the call for consolidation, a process that has accelerated during the new millennium. Founded in 1863, the First National Bank of Chicago was the city's leading financial institution for more than a century, marking its turf with an eponymous 850-foot Loop skyscraper built in 1969. In 2004, New York-based JPMorgan Chase bought Bank One, the successor to First National Bank of Chicago, shifting the headquarters to New York, but creating the largest U.S. bank in the process. In a 2024 interview with the Tribune, Jamie Dimon, chairman and CEO of JPMorgan Chase, who engineered the merger, said it created a 'great bank' that enabled the former Chicago-based financial institution to weather the post-millennium financial crises to come, while retaining jobs and benefiting the city. Harris Bank, another storied Chicago institution, was acquired by Bank of Montreal in 1984, but the city has remained the corporate nexus for the merged U.S. entity. Renamed BMO Harris, the bank jettisoned its last name after merging with Bank of the West in 2023. BMO, the largest Chicago-based bank, moved into its new West Loop skyscraper in 2022. While a potential BNY-Northern Trust merger would likely change the corporate address to New York, a source familiar with discussions said Chicago would be central to the combined bank, pointing to the 2007 merger between Bank of New York and Pittsburgh-based Mellon Financial, which created the largest custodian in the financial services industry. BNY is overseeing more than $53 trillion in custodial assets as of March 31. The Pittsburgh office has the largest BNY employee presence in North America and the bank has remained heavily invested in the community, something the New York-based bank hopes will assuage civic concerns over the potential loss of another Chicago banking headquarters. rchannick@ Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
