JP Morgan (JPM) at Various Conferences Notes

Jamie Dimon at Bernstein Conference

JP Morgan (JPM) CEO Jamin Dimon sounded the alarm bell on the frothiness in the auto loan market

“Auto is clearly a little stretched, in my opinion.  Someone is going to get hurt.  We don’t do much of that.”

Daniel Pinto – CEO of the Corporate & Investment Bank at Deutsche Bank Conference

Our inventories would probably be lower even without Volcker

“Clearly, we’ve been for a number of years very disciplined about margin risk and sizing the size of our positions to whatever is necessary to provide liquidity to our clients, and in an environment where the liquidity in the market is lower, you want to be a little more careful about how you manage your inventories. So even if Volcker would have not existed at all, some of the things that we do today, they’re exactly the same things that we’ve done with or without it.”

People have to trade with whoever is available and there are fewer players now

” I think that, obviously, the clients need to trade wherever they need to trade, and there is less players, they have to trade with whoever is available. So I think that by definition, that will produce a redistribution of that wallet into the bank that is still on a — in that business.”

Less players mean less liquidity mean higher volatility

“I think that less players also means less market liquidity, which is not good considering that the market in itself is at lot of — more liquid that it used to be. Less player means that less market liquidity, it means higher volatility, which really it will affect the overall level of spreads in the system.”

The market is now pricing a Fed hike in July

“I think that the market is now pricing, that the Fed go probably in July and there is a high probability of that, that is being priced in the market and the market is not pricing a lot about the Brexit, so a negative event could really produce some correction in the market. Clearly, in the short-term, it’s always going to be at this level of liquidity quite painful – how sustainable is, in the long-term is hard to see but economies are going so bad, so overall probably you have some volatility, if those haven’t been happened, then the market will recover back.”

Signs of recovery in the IPO market

“I think there is some signs of recovery, if I look at the — month of IPO in the second quarter is larger than the total amount of IPOs in the whole first quarter. So — and when you look at the pipeline that is quite a lot come in, so as market stays stable for a longer period of time, if that happens we are going to see — and valuations have recovered, you’re going to see more activity. When you look at the performance of the IPO, 73% of the IPOs that took place this year are trading above the offer price. Last year, for the whole year, it was 58%. So the fact that there are plenty of IPOs from last year, that they are trading weak is really so hard in some way or the other the possibilities of the follow-on.”

Incorporation of blockchain would allow us to be more efficient, drive down costs

“The other one is, when you look at the processes that we run today in every bank. So they are — some of them, they’re good, some of them, they are quite inefficient. So the incorporation of these technologies will help to make those processes more efficient. So therefore it will have an impact [indiscernible] if they work in the long run. So, I think that it’s quite exciting. So it’s still early days. But important thing here is that you really, as a company, you are very focused on that, and then you really invest, and you’re really disrupting the way that you do things to incorporate your technologies, you’re really at the forefront. Because whoever gets it, it will make all our — whoever gets it right, it will make all of our business more scalable and therefore be able to process a little more with existing infrastructure that is revenues that fall all the way to the bottom line.”