💭 Jamie Dimon's 2 Cents

It was painful, but we summarized Jamie Dimon’s 63-page letter… April 9, 2024 | Peel #684 Silver Banana goes to... [Delta. ]( In this issue of the Peel: - 💢 It was painful, but we summarized Jamie Dimon’s 63-page letter… - 🔻 Donald Trump’s media company is really taking a hit… what happened? - 📃 We got the latest Survey of Consumer Expectations on Monday. Market Snapshot 📸 Banana Bits 🍌 - U.S. infrastructure is at the [worst it’s ever been]() - TSMC gets a $6.6bn paycheck to build a [factory in Arizona](=) - The Mag 7 might go back to just the 7 by [Q4 earnings szn]( - A full breakdown of executive pay for [President Trump’s “company”]( How Many Assets Do You Track? Do you hold crypto or stocks? There's one indispensable tool you need: a robust price tracker. We're a big fan of what Delta Investment Tracker has to offer. Delta offers comprehensive tracking of crypto, stocks, ETFs, and commodities – all at the unbeatable price of zero, nothing. It's top-tier financial tracking, entirely free. [Go give it a spin]( Macro Monkey Says 🐒 Dimon’s 2 Cents The printing press, electricity, and Jamie Dimon’s rizz—3 of the most impactful developments in the history of humanity. My bad, it was actually artificial intelligence that was supposed to be in the above list, not something as lame as electricity. Hardly anybody can rizz markets as well as Fed Chair Jerome Powell, but if anyone can, it’s the Chairman and CEO of the world’s most valuable bank, Mr. James “Jamie” Dimon. And our boy Jamie just dropped the ultimate rizz in the form of his 2023 letter to shareholders. So, let’s see what he has to say. The Most Important Thing [Source]( As we can see above, the past 17 years have been pretty damn good for JP Morgan and their shareholders, largely thanks to Dimon’s leadership. Dimon’s shareholder letters, like that of Buffett or way-less-cool CEOs such as Chamath Palihapitiya, are meant to give shareholders an update on their company. But, when you’re as important as JP Morgan, it’s basically an outlook on the entire U.S. Before anything else, Dimon focuses on AI and the impact this technology promises on JP Morgan and the entire economy. “Completely convinced the consequences will be extraordinary” is just one way he describes JPM’s AI outlook. “Think the printing press, the steam engine, electricity, computing, and the Internet,” he goes on to say before adding that the bank now has 2,000 nerds, I mean, *AI/ML employees, now working on over 400 different use cases for the firm alone. [Source](=) The tough part is that a lot of the hype around AI right now is just that, purely speculative. But, when it came to more tangible events impacting the U.S. and the entire world, don’t worry because our boy had a lot to say. Inflation was a big topic. Here, Dimon focused on longer-term inflationary pressures outside of the whims of JPow’s silver fox mind. He pointed out that trends ranging from global re-militarization to the green energy transition involve heavy spending from deficit-plagued governments that could re-trigger inflationary pressures in a more gradual process than recent pandemic spending. High energy costs and mounting fiscal obligations here in the U.S. are primary drivers of long-term inflation, according to Dimon. [Source]( More broadly, Dimon shares his thoughts on commercial real estate, geopolitics, and the “breakdown” going on between U.S. banks and their regulators. However, there were no comments on the [sad state of New York Mets]( baseball games so far this year. Commercial Real Estate: Dimon basically says that he’ll be truly concerned for the asset class if rates surpass 6% as we head into a recession. “There will be plenty of stress... a simple 2% increase in rates… reduced the value of most financial assets by 20%,” he said. Geopolitics: Few people have as much of a red-blooded American outlook and opinion as Dimon. He pointed out that a free Western world can no longer maintain a false sense of security… that dictatorships… won’t use their economic and military powers to advance their aims. He went on to add that these nations largely see the West as “weak, incompetent and disorganized…” Bank Regulations: Unlike many bank leaders, Dimon is one whom regulators seem to actually appreciate and take seriously. So, it might actually matter to them when he says, “There is little real collaboration between practitioners—the banks—and regulators…” He added that “without collaboration and sufficient analysis, it is hard to be confident that regulation will accomplish desired outcomes without undesirable consequences. Instead of constantly improving the system, we may be making it worse.” [Source](=) The Takeaway? In case it’s not obvious, we’re big Dimon fans here at the Peel. But even we could barely get through the egregiously monotonous 63 f*cking pages in this letter. So don’t waste your time. Just know the things that actually matter include: - JP Morgan is still like the damn Death Star of Corporate America - The artificial intelligence trend kickstarted by the launch of ChatGPT is as real as it gets in terms of impactful technological developments - The U.S., in Dimon’s view, needs to grow a pair and start prioritizing the well-being of citizens again - The banking system and related asset classes are fine for now, but we need to be cautious in the event of a “spike” in rates - Regulators are a bunch of dorks that don’t let banks gamble enough It might’ve just been his two cents, but Dimon still dropped a full dime on this one. What's Ripe 🤩 Spirit Airlines (SAVE) 📈6.8% - While Boeing continues to try to kill everyone that sets foot on their planes, Spirit is giving the finger to Airbus, but for a much different reason. - The near-defunct airline finally had a good day, announcing plans to delay shipment of planes from Airbus and to furlough 260 pilots. - The company says this will add $340mn in liquidity, potentially saving them from bankruptcy after JetBlue led them on worse than a Tinder catfish. SoFi Technologies (SOFI) 📈4.9% - On Monday, SoFi was like the kid who ditched their glasses over the summer and came back to school with contacts—now looking hotter than ever. - The stock has received 3 upgrades in the past week, with Monday’s Buy rating and price target hike (now $11) from Citi holding the most weight. - The idea is that SoFi’s ability to keep growing deposits while focusing on long-term profits provides far greater upside than any recent downside catalysts, like the issuance of new convertible debt. What's Rotten 🤮 Trump Media (DJT) 📉8.4% - Clearly, the fake news media is back at it again, reporting a fake news selloff in Donald Trump’s stock. I guess the Nasdaq is just as bad as Fox and CNN. - Or, maybe we’ve all just realized that former President Trump’s “company” is about as successful as your average lemonade stand… for now. - That could change, given the success of Trump’s other businesses, but right now, it’s performing worse than Nikki Haley in the primaries. Paramount Global (PARA) 📉7.6% - There’s trouble in paradise and Paramount Global this week as existing shareholders look to halt ongoing merger talks. - Matrix Asset Advisors, a large shareholder in $PARA, said that the buyout offer from the consortium led by Skydance Media is “sub-optimal.” - Shari Redstone, owner of National Amusements, which owns $PARA and others, has said the deal offers value outside of simple accretion to short-term EPS. - Monday’s selloff comes as a response to the now-longer merger process. Shari wants out ASAP, but Matrix and others are locked in for the long haul. Thought Banana 🤔 Expect the Expected When I was an intern and “expected” my opinion on things to actually matter to the company, I couldn’t have been more wrong. Most of the time, our expectations have almost no impact on our future reality. And in my case, this 100% worked out a lot better for me and the companies dumb enough to hire me. But sometimes, our expectations matter. And when it comes to inflation, even an opinion as useless as mine can have an impact. What Happened? On Monday, the latest Survey of Consumer Expectations was released from the New York Federal Reserve Bank. [Source]() Expectations matter here because consumers at least attempt to plan their economic futures. If we expect prices to be higher in the future, we’ll spend money now to avoid higher costs later, thus creating an increase in spending and driving inflation. But, when we expect deflation, we’ll wait for lower prices, stifling consumer spending and creating deflationary pressures. Above, we can see that consumers expect inflation to hold at a median rate of 3.0% for the next 12 months. Like my bed sheets, this hasn’t been changed for the past 3 months. Uncertainty around inflation rose slightly along with 3-year inflation expectations, but 5-year expectations fell to 2.6%. But the biggest change in the report centered around our fellow American’s perceived likelihood of losing their job: [Source]( The spike in the blue line, representing the median odds of losing one’s job, spiked to the highest level since the fall of 2020 last month. I don’t know if you guys are just sucking at your jobs all of a sudden, but something’s clearly changed. I’ve been sucking at my job since day 1, and that’s why I’m not one of the people in the below line, expecting a 2.8% increase in earnings over the next 12 months. [Source]() When it came to things consumers actually can control, the vibe was fairly negative as well. Consumers expect to increase spending by only 5% in the next 12 months, 12.9% of us expect to miss a minimum debt payment, and only 39.2% expect markets to be higher a year from now. The Takeaway? Not much has changed over the last month for consumers in their expectations of the future. While things are certainly far from ideal right now and at any point in the past, the lack of overwhelming negativity is at least one positive takeaway. If it ain’t broke, don’t fix it, I guess. 💭 The Big Question 💭: How right, or more accurately, how wrong will consumers be over the next 12 months? Will declines in inflation expectations have a tangible impact? How can consumers best prepare, given increased inflation uncertainty and job anxiety? Banana Brain Teaser 💡 Previous 🗓 Abdul, Barb, and Carlos all live on the same straight road, on which their school is also located. The school is halfway between Abdul’s house and Barb’s house. Barb’s house is halfway between the school and Carlos’s house. If the school is 4 miles from Carlos’s house, how many miles is Abdul’s house from Carlos’s house? Answer: 6 miles Today 🕐 During a certain time period, Car X traveled north along a straight road at a constant rate of 1 mile per minute and used fuel at a constant rate of 5 gallons every 2 hours. During this time period, if Car X used exactly 3.75 gallons of fuel, how many miles did Car X travel? Send your guesses to vyomesh@wallstreetoasis.com Wise Investor Says 🤓 “By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens.” — John Maynard Keynes How Would You Rate Today's Peel? 😁 [All the bananas](=) 😐 [Meh](=) 😩 [Rotten AF]() Happy Investing, David, Vyom, Jasper & Patrick [ADVERTISE]( // [WSO ALPHA]( // [ACADEMY]() // [COURSES]() // [LEGAL]( [Unsubscribe]( IB Oasis Corp. (aka "Wall Street Oasis") 20705 Saint Charles St Saratoga, California 95070 United States (617) 337-3353