원문 보기
You have always said that people are so relaxed that markets aren't taking threats into account. Is what we saw in yields overnight a sign that risk is being priced in? When I talk about that kind of laziness, I'm talking about the price of assets in the US, which includes a lot of different things.
QE global budget deficits, trade wars, and huge complicated geopolitical situations are some of the things that are at play. And I see that all of those things are probably not priced right for the market. We don't know what will happen though. This is what I saw last night. I don't worry about how the bond market might move one day.
You don't stress about one day. The returns, on the other hand, are higher now than they were before liberation day. We already talked about how 30 is more. Some people say that 10 is getting to five and 30 is getting to 7%. You know, how do you think about that? In other words, how high do yields have to get before they break?
I'm sorry, but I don't know the answer. It doesn't matter what you think. The way we run the business means we're ready for everything. There's a chance that things will go badly and you'll have stagflation. This doesn't mean it will happen. People might think I'm making predictions, but I'm not. We just need to be ready for things like that.
I believe that the world's budget shortfalls cause prices to rise. I believe that making the world more militarized is making prices go up. The changes to trade are making prices go up. This isn't just an American thing either. And the needs for facilities cause prices to go up. Now that you have hedges, the price of oil has dropped a lot, which is very deflationary.
But with all of those things going on, you might be shocked. I also love reading about the past of money to see models. It's also important to look at what happened between 1972 and 1974, 1982 and 1990. Surprises happen and most economists and models don't pick those turning points. Those turning points are often caused by global complexity which you don't always know about.
For example, the oil crisis in 1974. So, we keep serving our clients in thick or thin because we want to be ready for anything. You say you're worried about debt and now they add the tax bill that will be passed on tonight. It's going to get a lot worse. What do you think about that? Yes, the US has the biggest trade imbalance it has ever had during peace time.
It's almost 7% of GDP. No matter how the tax bill turns out, it will likely add a little to that. Still, I believe it's better for us to know for sure what the tax bill will be. I'd rather do that. But I do believe that Americans are attacked at some point. The problem is a shortage. A lot of Republicans also feel that way.
A lot of Democrats agree with you. And the fight isn't just tax hikes. It's having the right rules about rewards and business growth. Also, I just got back from Europe last week, and everyone there is talking about how to grow businesses, get more investment, lower regulations that slow down growth, and make sure everything is safe for banks, food, water, and other things.
But I believe that the government should do that better. So, being pro business and progrowth is a great thing. And maybe one day that will help make up for some of the extra spending. We already said that the yields are high and you said before that markets around the world might rebel in some way.
Could that still happen? What could that look like? Yes. It's not what I would call a high yield setting. Rates have been much higher than this in the past, which surprises people over time. Another thing I think is that a lot of the longerterm trends are inflationary. Credit spreads are low, which is another thing you should know about the person on TV.
There are two things that can go against you. Credit spreads that are too wide and rates that are going up. So, let's see how things go. I don't want to guess what will happen. To be safe, I'm being careful. There are some things that make me doubt that we'll have a soft landing here. Let's look at China from where we are.
Is the market still important? Because while your competitors jump ship from China and backed off, you put your resources here. What do you think about China in the next 12 to 24 hours? That's why we spend for the long term. I don't look at it. We're not going to buy this stock. We say put your money next to all of us.
Also, check out this meeting. That's why there were a few hundred people here the first time I got this 21 years ago. There are now almost 3,000 people here. I believe that 1,300 businesses from 33 countries are investing. It looks into about 400 Chinese companies right now. We plan to stay here for a long time.
All of these other problems are awful, but we have to deal with the world as it is, not the one we wish it were, and we'll keep getting better. I believe we work with about 1,700 global companies in China. These are our customers from Latin America, the United States, Europe, and other places. We also work with many Chinese companies all over the world.
There are people in Brazil who know both Portuguese and Mandarin, which makes it easier for business to go between Brazil and China. So, long-term buyers are worried about the current state of things. But, I hope everything works out in the end. We're not going to back down, though. I think about the story that got out there and now we're back in China.
That is not true at all. That being said, we know we'll be under some political pressure until everything is clear. Now we know that China is one of your top investment targets. In the next 12 months, maybe. Does everyone in charge agree that this is the place to be? You say to look at it in the long run?
Yes. Most people agree that businesses will come here to do business. There might need to be some changes made to the trade talks because the US government wants to leave China. As you may know, our secretary of the Treasury just met with the police here and they're talking about getting along well.
They got us talking about what we can do to make things better, which I like. I hope they do. I have a second round, a third round, or a fourth round, and I hope they do well. Do you think China will grow? But if you look at China, they go back a long way. In the last 20 years, they've done a huge job of helping their people get ahead.
That doesn't mean I grew up there more than they did. I'm a full-blooded American patriot and businessman, you know, but I get what they're doing and think it will help their country. I've seen their cars and AI in this place, too. You know, they did a pretty good job and we should look at America. Okay, we'll have to compete, too.
Because of this, I will let the government handle foreign policy. Business people are stuck in the middle of the trade disputes between the US and China. Think when CTL went public in Hong Kong, JP Morgan got caught up in it. You stayed in your job. Why? To begin, JP Morgan does not make foreign policy.
The government does. Also, CL was not approved by the government. There are many people who didn't want us to do it and some of their reasons may be somewhat valid. However, I believe that the government should decide what to do. We're not going to do that. I would have saluted and moved on if they had told us we couldn't.
I would have no choice. Because of this, there are real concerns about national security. I get it if you had all those problems. We don't think it really said anything about that thing. A lot of research was done by us and other investment banks on all the problems that people brought up. That will also get me in trouble, but we wouldn't do it if we thought it was wrong.
Are you ready for more stress? The government is putting pressure on us about everything. We're not eco-friendly enough. We like a lot of oil and gas firms. There are mayors and leaders who tell us this. I get that. We try to answer all of them in a way that makes sense and helps our client. If people have valid issues, we try to change and every once in a while we do.
In this situation, things change all the time. And that level of instability is likely to stay. Why do you think the government is still putting pressure on JP Morgan and other companies like it to move away from does a lot of work with Chinese people? I would be very careful. Both governments have controls on what can be exported, brought in and invested in.
I believe those changes will happen in the morph over time and it will adapt to them. What plan do you have in Asia where the Chinese government has been under a lot of pressure? More and more people are talking about diversity. In what ways do you see your business in Asia? Yes, we look at each country's people, its own schooling, its own culture, its own growth, and its own natural resources or lack of them.
All of these countries and most of them get money from us. We're in touch with them. So, these are banks from all over the world. I know you from Singapore. We have a bank. Singapore. We bank Singapore and other countries and their money goes all over the world. That means that almost every country is growing.
That's the way we do it. We look at all of them. We don't come and go. When we put money into a company or a country, we don't treat it like a stock. Oh, we think Vietnam is going to have a bad year, so we put. That's not what we look at. What we look at is how they're growing their communities, businesses, and economies.
Then there are times when we just follow clients who are already in those places to make their payment systems work better together. Many of the companies we bank with in the US want us to be in more countries.
Comments 0