US economy stronger than you think: JP Morgan CEO Jamie Dimon

MUMBAI Chatting in a hotel in South Mumbai, he didn’t look particularly worried at the thought that Susan Sarandon, Noam Chomsky and thousands of other bank bashers may have gathered near his office to show their angst against Wall Street.

"I think the American economy is much stronger than what people think. I think you may be a little surprised and I hope I’m right about that," said Jamie Dimon, chief executive of JP Morgan Chase which figures among the very big banks that emerged almost unscathed from the 2008 crisis. He feels that JP Morgan will be as lucky and as smart this time too.

It’s always possible that there can be nasty surprises like a large mortgage loss that has been hidden so far. "But banks today have twice as much capital. There are no off balance sheet vehicles. All the bad actors are gone," said Dimon who thinks that Greece will eventually be restructured and that itself would not create any damage to institutions around the world.

"Is it possible to have a disorderly default and a contagion? Yes. There is a chance it goes the bad way, there is a chance it goes okay, but I still think the higher chance is that it’ll be okay...Hopeful is not quite confident. Hopeful is hopeful," said Dimon minutes before leading ahigh-profile jury that met here on Monday to pick the winners of The Economic Times Awards For Corporate Excellence 2011.

Dimon is not too bothered that consumers are not really spending in the US. "They don’t have to. All they have to do is stay where they are. Incomes are going up, they are saving 5% now. They actually have much better savings now. If consumer income goes up, they spend 95% of it, you can actually see growth." It’s hard for people to sense that things are "still so bad".

In the US, Dimon is in the midst of a raging debate for opposing some of the new capital rules for lenders, which he strongly feels, could backfire on American banks and hamper growth. It’s a reason why he runs the risk of being misconstrued, particularly by the likes of Chomsky. "I am not arguing for deregulation. Don’t make this binary, ok?" said Dimon before rushing for the meeting.

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