PMorgan CEO Jamie Dimon Warns of Incoming Economic Hurricane — Says ‘You Better Brace Yourself’

The CEO of JPMorgan & Chase, Jamie Dimon, warned about an incoming economic hurricane Wednesday at a financial conference sponsored by Alliancebernstein Holdings.

“It’s a hurricane,” Dimon exclaimed. While noting that “Right now it’s kind of sunny, things are doing fine, everyone thinks the Fed can handle it,” the JPMorgan executive stressed:

That hurricane is right out there down the road coming our way. We just don’t know if it’s a minor one or Superstorm Sandy … You better brace yourself.

“You know, I said there are storm clouds, but I’m going to change it. It’s a hurricane,” said Dimon.

He also made it clear that JPMorgan is bracing itself and will be going to be very conservative with its balance sheet.

JPMorgan economists recently lowered their growth outlook for the second half of 2022 to 2.4 percent rate from 3 percent after analyzing falling stock prices and higher mortgage rates.

Currently, inflation in the US — the world’s largest economy — is hovering around levels more than three times the Fed’s goal of 2 percent. It faces the Herculean task of bringing down the cost of living for the public without causing a blow to the system.

Dimon is not the only one worried about slowing growth.

Gary Schlossberg, a global strategist at Wells Fargo Investment Institute, expects a difficult period for the markets, as the US and European central banks “will be tested by inflation, which will remain elevated over the next several months”, he told CNBC-TV18.

Effects of Economic Hurricane on small businesses across Kitsap county.

During an economic recession, small businesses are often hit the hardest. Some businesses are affected more than others, and typically luxury services suffer first as both business and private customers cut back on spending.

Budget constraints, reduced spending power and inadequate preparedness for a recession can make it impossible for a small business to survive.

In many cases, this causes companies without adequate supports to be unable to continue operating. In other situations, however, small businesses show remarkable flexibility and find creative ways to survive a downturn.

Small businesses that depend on a few major customers for the bulk of their revenue could lose a significant amount of income if one or more of those customers reduces its purchase amount or stops buying completely.

If a large customer goes out of business, it compounds the company’s problem because not only does it lose regular business, but it also may also fail to get money the customer owes.

It’s not just businesses and consumers who become more cautious with their spending. Lenders tighten their belts as well, which makes it more difficult for businesses to access the usual lines of credit. Interest rates might increase, and lending requirements are stricter.

A reduction in cash flow and profit eventually makes its way to your business’s official financial statements, including the quarterly earnings report. At this point, dividends might decline or even disappear. Shareholders might even call for new leadership as stock prices drop. 

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