What’s ole Jamie up to?

01 Nov What’s ole Jamie up to?

Image by Jan from Pixabay

What’s ole Jamie Dimon up to?

Jamie Dimon will do something he has never done before in nearly two decades as the head of JPMorgan Chase & Co. – sell shares in the company.

The top executive of the nation’s largest bank will sell 1 million shares starting next year, according to a regulatory filing this week.

JPMorgan sought to reassure investors that the stock sale is not a matter of concern.

–https://apnews.com/article/jpmorgan-dimon-bank-stock-8bf2366793488eed0c0b5327a7ad19a3

😆

I’m dumping my stock and it’s something I’ve not done before, but, like, it’s not a matter of concern. Nothing to see here, investors. Move along, move along.

Let’s say it together in unison: don’t pay attention to what they say. Watch what they do!

When the bank posted another blockbuster earnings report two weeks ago, Dimon warned, “This may be the most dangerous time the world has seen in decades.”

Dimon laid out a laundry list of major issues: the Russia-Ukraine War, the new war between Israel and Hamas in Gaza, high levels of government debt and deficits, high inflation, as well as the tight labor market, where worker demands for increased wages have led to high-profile strikes in manufacturing and entertainment.

-AP, Ibid.

Yeah. I dunno about all that. If I had to make a bet, I’d imagine this has more to do with The Fed and the possibility that inflation is gonna eat everyone’s lunch over the next few years (and these stocks are gonna go down). 🤷🏻‍♀️ Just a guess.

–https://unusualwhales.com/news/walton-family-sold-4-39-billion-worth-of-walmart-shares-during-2023s-first-half

I’m no billionaire fat cat out here, but $4.39 billion of stock sounds like a lot to me.

JPMorgan Chase CEO Jamie Dimon is raising the specter of the war on inflation getting worse before it gets better.

In an interview with the Times of India published on Tuesday, Dimon warned that if the Federal Reserve has to keep raising interest rates to cool inflation, it will be painful.

“I am not sure if the world is prepared for 7%,” Dimon told the paper.

He made the comments while attending a JPMorgan investor summit in Mumbai, India.

–https://www.cnn.com/2023/09/26/economy/jamie-dimon-7-interest-rate/index.html

JPMorgan Chase CEO Jamie Dimon issued a stark warning Monday to Wall Street: The Federal Reserve may be far from finished with its aggressive regimen of interest rate hikes in the fight against elevated inflation.

Most analysts say the central bank will raise interest rates just one more time, in November, by 0.25 percentage points from its current range of 5.25%-5.50%. However, Dimon told Bloomberg TV it’s possible the central bank will continue hiking rates by another 1.5 percentage points, to 7%.

That would be the highest federal funds rate since December 1990. In March 2022, when the current hiking regimen began, rates were at 0.25%-0.50%.

Dimon was doubling down on comments he made last week in an interview with the Times of India, when he said the world is not prepared for 7% rates.

It’s also a contrarian take. According to the latest Fed projections, officials forecast just one more interest rate hike this year — and rate cuts next year.

Still, Dimon, who leads the largest bank in the United States, says Americans need to be prepared for interest rates to surge.

–https://www.cnn.com/2023/10/02/investing/jamie-dimon-jpmorgan-7-percent-interest-rate-recession/index.html

So it seems to me that he’s sure enough of his “contrarian take” to start offloading 1 million shares of stock to protect himself. Does this suggest to you that The Fed is winning the war on inflation and all is well?

Here’s a quick TL;DR on what the federal funds rate is:

• The federal funds rate is the target interest rate range set by the FOMC.
• This is the rate at which commercial banks borrow and lend their excess reserves to each other overnight.
• The FOMC sets a target federal funds rate eight times a year, based on prevailing economic conditions.
• The federal funds rate can influence short-term rates on consumer loans and credit cards.
• Investors keep an eye out on the federal funds rate as well because it has an impact on the stock market.

–https://www.investopedia.com/terms/f/federalfundsrate.asp

Catch the last bullet point there? It will have an impact on the stock market as well. Imagine that.

Investors keep a close watch on the federal funds rate. The stock market typically reacts very strongly to changes in the target rate. For example, a small decline in the rate can prompt the market to leap higher as the borrowing costs for companies get lower. Many stock analysts pay particular attention to statements by members of the FOMC to try to get a sense of where the target rate may be headed.

-Investopedia, Ibid.

Got it. So if the rate goes down the market goes up. If the rates go up presumably the market goes down. Looks to me like these billionaires are planning for just such a thing, n’est-ce pas?

Let’s also consider this bullet point: “The federal funds rate can influence short-term rates on consumer loans and credit cards.” Consumer debt becomes more expensive to service. If someone bought an overpriced house at an already elevated rate of 6 or 7% what do you suppose will happen if the federal funds rate goes up again?

Just food for thought.

+++++

This can also be found as a crossover on my podcast: “Sunday Night Special: The Wealthy are Making Big Moves”  https://www.buzzsprout.com/1125110/13866094