RBC Capital Markets managing director Gerard Cassidy reacts to Jamie Dimon’s ‘cockroach’ principle about current auto chapter on ‘The Claman Countdown.’
JPMorgan Chase CEO Jamie Dimon warned this week that there might be credit score dangers lurking within the financial system, saying that “while you see one cockroach there are in all probability extra.”
Dimon spoke on the financial institution’s quarterly earnings name on Tuesday and acknowledged that the agency needed to take a $170 million write-off within the third quarter associated to the chapter of subprime auto lender and dealership Tricolor.
He additionally pointed to the chapter of auto components maker First Manufacturers as suggesting there might be another credit score issues looming within the financial system.
“Whenever you see one cockroach, there are in all probability extra, and so everybody must be forewarned of this one,” Dimon stated. “First Manufacturers, I would put in the identical class, and there are a few different ones out that I’ve seen put in comparable classes. We all the time have a look at these items, and we’re not all-powerful – we make errors too.”
JPMORGAN’S JAMIE DIMON: WORLD NEEDS AMERICA TO BE STRONG AS FIRM PLEDGES STRATEGIC INVESTMENT
JPMorgan Chase CEO Jamie Dimon warned that when one “cockroach” emerges in credit score markets there are probably others looming. (Hollie Adams/Bloomberg through Getty Pictures)
“We have had a credit score bull market now for the higher a part of since 2010,” Dimon added. “These are early indicators there may be some extra on the market due to it. If we ever have a downturn, you are going to see fairly a number of extra credit score points.”
Dimon stated that JPMorgan is reviewing its controls after the Tricolor chapter and stated the $170 million loss is “not our best second.”
“When one thing like that occurs, you may assume that we scour each subject, each universe, every thing about the way it might be happening to ensure it does not happen from right here,” Dimon stated.
JAMIE DIMON WARNS OF MAJOR MARKET RISK IN NEXT FEW YEARS
| Ticker | Safety | Final | Change | Change % |
|---|---|---|---|---|
| JPM | JPMORGAN CHASE & CO. | 297.52 | -1.33 | -0.45% |
“You’ll be able to by no means fully keep away from these items, however the self-discipline is to have a look at it in chilly mild and undergo each single little factor, which you’ll think about we have already carried out,” he added.
First Manufacturers is underneath investigation by the Justice Division’s Workplace of U.S. Trustees, which oversees chapter issues.
The group stated in a Wednesday courtroom submitting that there are “ample grounds to suspect that present members of the debtors’ boards or govt administration crew could have engaged in precise fraud, dishonesty, or felony conduct within the administration of the debtors’ enterprise affairs.”
JPMorgan Chase took a $170 million cost on the chapter of Tricolor. (Tim Clayton/Corbis through Getty Pictures)
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Reuters contributed to this report.