America’s top bankers worry more about the world than a recession


London
CNN Business

Some top names on Wall Street think a US recession is imminent, if not inevitable. But they have bigger concerns on their minds.

JPMorgan Chase ( JPM ) CEO Jamie Dimon said Tuesday he is more concerned about global geopolitics than slowing U.S. economic growth.

“There are a lot of things on the horizon that are bad and they may – they may not – but they could put the US in trouble,” he said at the Future Investment Initiative conference in Riyadh, Saudi Arabia.

“It is not the most important thing that we think about. We can get through it. I would be very concerned about the state of the world today,” said CNN’s Richard Quest, who moderated the discussion among American economists. at the event, also known as “Davos in the Desert.”

Mr Dimon said he was referring to Russia’s war in Ukraine and the strained relationship between the United States and China, where President Xi Jinping has consolidated his power and sidelined officials who want to reform and open up the world’s second-largest economy.

“The relationship with the West would worry me more than if there is a slight or moderate recession. [in the United States],” he he added.

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The breakdown of relationships – with negative effects on everything from national security to energy and food security – was a persistent theme during the discussion. Dimon and Blackstone Group (BX) CEO Stephen Schwarzman explained the impact of the pandemic, which he said has affected people’s communication and ability to learn from each other.

“We’ve gotten ourselves into an ever-increasing crisis,” Schwarzman said.

Ray Dalio, the billionaire founder of the hedge fund Bridgewater, said there is a “threat of global war.” What is needed is “a strong political center” that is “stronger than the extremists,” he added.

According to Dimon, the source of many of these problems is the lack of American leadership.

“If you don’t have strong American leadership — not bad American leadership, not ‘our way or the highway’ — as something to hold the West together, you’re going to have chaos like you’re seeing in Ukraine,” he said. he said.

Dimon said he was confident that relations between the United States and Saudi Arabia would remain strong, despite tensions rising following OPEC+’s decision to cut oil production earlier this month.

“Saudi Arabia and the United States have been allies for 75 years. I can’t imagine that allies can agree on anything and not have problems. They will deal with it… and be allies in the future,” he said.

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Commenting on the possibility of a recession in the United States, Dimon said that although business and consumer spending in the US remains strong at the moment, Americans will probably run out of “more money” by the middle of next year.

David Solomon, CEO of Goldman Sachs (GS), speaking at the same meeting, also thinks that a recession in the US is likely to happen.

“There is no question that economic conditions will tighten from here,” Solomon said, referring to the Federal Reserve’s interest rate hike. “When you find that inflation is fixed, it is very difficult to get out without a recession,” he added, suggesting that Europe may already be in recession.

Schwarzman also pointed to rising interest rates and “problems in international relations” as the biggest challenges facing businesses.

To that list he added social media.

“One of the things we don’t know is how difficult it is for governments to operate in social media,” Schwarzman said. Efforts to “make the world a better place” are being undermined by “less vocal” people who are trying to do something good for the world, he added.

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Dimon said social media users should be authenticated in the same way that people need to be authenticated for banking, which would help “weed out the bots.”

Social media users should also be given “choice lists” of algorithms that define how each one works. “They should give you a choice instead of tricking you,” he added.

When asked what kind of algorithm he would choose, Dimon replied: “I don’t look for any of these scams.”

Despite the difficulties of social media or political and economic divisions, The leaders were optimistic about the power of technology to improve the world.

“We can sit here and talk about all the things that are driving growth … but the new economy is doing well,” Solomon said.

Technological advances in a variety of fields – from quantum computing, artificial intelligence and advances in education and healthcare – were “very powerful” and “capable of lifting us up and moving us forward,” he added.

Saudi Arabia’s Future Investment Initiative, which runs until October 27, began in 2017 under Crown Prince Mohammed bin Salman’s “Vision 2030,” a plan to attract international investment and move the economy away from oil.

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