CNN – Some major names on Wall Street think a US recession is now imminent, if inevitable. But they have bigger problems than that.
JPMorgan Chase CEO Jamie Dimon said on Tuesday that he is more concerned about geopolitics than slowing US economic growth.
“There are a lot of things on the horizon that are bad and could — not necessarily — but plunge the United States into a recession,” he said at the Future Investment Initiative conference in Riyadh, Saudi Arabia.
“That’s not the most important thing we think about. We manage through that. I’m very worried about the geopolitics of the world today,” he told CNN’s Richard Quest, who moderated the discussion among America’s most influential financiers. Also known as “Davos in the Desert” at this event
Dimon said Russia’s war in Ukraine and relations between the United States and China are fraught, as leader Xi Jinping has consolidated his grip on power and sidelined officials who pushed for reforms and the opening of the world’s second-largest economy.
“I would be more concerned with relations in the Western world than whether there is a mild or rather severe recession. [in the United States],” he added.
The breakdown of relations — and the negative consequences for everything from national security to energy supply and food security — was a recurring theme during the discussion.
Ray Dalio, the billionaire founder of the hedge fund Bridgewater, said there was an “existential risk of an international war”. What is needed, he added, is a “strong political center” that is “stronger than the extreme”.
Commenting on the possibility of a U.S. recession, Dimon said that while U.S. business and consumer spending are currently strong, Americans will run out of “surplus cash” in the middle of next year.
Speaking on the same panel, Goldman Sachs CEO David Solomon also thinks a US recession is likely.
“There’s no question that economic conditions will tighten meaningfully from now on,” Solomon said, referring to the Federal Reserve’s interest rate hikes. Europe may already be in recession, he said.
Fix social media
Blackstone Group CEO Steven Schwarzman also highlighted rising interest rates and “problems in relations between countries” as key challenges facing businesses.
He added social media to that list.
“What we don’t know is how difficult it is for governments to function in a social media world,” Schwarzman said. He said initiatives to try to “make the world a better place” have been undermined by “some screaming minority” trying to accomplish something for the good of the world.
Dimon said social media users should be authenticated in the same way people are required to access the banking system, which would help “weed out the bots.”
Social media users should also be given a “choice menu” for algorithms that explain how each one works. “They should make a choice rather than manipulate you,” he added.
Asked what kind of algorithm he would choose, Dimon replied: “I’m not looking at any of that crap.”
The Future Investment Initiative, which runs until October 27, began in 2017 as part of Saudi Arabia’s efforts to attract international investment to reduce its economy’s heavy reliance on oil.
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