How a Jamie Dimon Joke About China Could Cost JPMorgan More Than $20 Billion

Jamie Dimon's quick apology may not be enough.

At the head of JPMorgan since 2004, Jamie Dimon is one of the few billionaire CEOs in the banking world. Not that other American or foreign bank bosses are to be pitied, but Jamie Dimon is an exception. His success at the head of JPMorgan is recognized by all specialists. His move to unload $12 billion of subprime mortgages in 2006 buffered his bank against the 2008 crash.

One could criticize his lack of foresight regarding the world of the future when he continues to claim that Bitcoin is worthless. At the same time, he has been careful to let JPMorgan offer to buy Bitcoin for its clients. A strange duality that shows what bankers are about: they are only interested in making the maximum profit in any situation.

In addition to all this, Jamie Dimon is known to be a fan of good words. A habit that could cost JPMorgan billions of dollars in the months to come.

During a public event in the United States, Jamie Dimon wanted to amuse his audience by talking about JPMorgan's establishment in China:

“We hope to be there for the long term. The Chinese Communist Party is 100 years old, and so is JPMorgan. But I bet you we survive longer.”

If this joke praising JPMorgan's robustness was much more appreciated by Jamie Dimon's audience, the group's general staff laughed much less. A crisis meeting was immediately called to clear the potential consequences with Beijing. It must be said that the timing chosen by Jamie Dimon for his little joke could not have been worse for JPMorgan.

JPMorgan had just obtained the authorization to be the first foreign firm to hold the entire capital of a management company in China. This is a huge sign of confidence from the Chinese government to JPMorgan which is betting a lot on China.

The bank led by Jamie Dimon has nearly 20 billion dollars of exposure to the world's second-largest economy, and above all, great ambitions for its continued expansion. The American bank is therefore doing everything to maintain cordial relations with a government that is extremely sensitive on all subjects that touch on its legitimacy.

Usually quick to point out the misbehavior of foreign companies, the Chinese media have not yet reacted, nor have the Chinese authorities. Aware of his mistake that could cost JPMorgan at least 20 billion dollars, Jamie Dimon has already publicly apologized a few days after his disastrous joke, saying he regrets his comment:

“I wanted to emphasize the strength and longevity of our business.”

Final Thoughts

With his experience, Jamie Dimon knows the ins and outs of a good relationship with Beijing. In 2019, the executive himself reminded his teams of the importance of never referring to Hong Kong, Macau, or Taiwan as independent states.

Before JPMorgan, other American companies have learned the hard way that you have to walk on eggshells about certain issues to stay in China. UBS, the NBA, H&M, Nike, and Adidas are recent examples.

We'll have to see how China reacts, and if Jamie Dimon will have to bear the huge consequences of a seemingly insignificant little joke. But on the Chinese side, it seems crucial not to let anything go by as Xi Jinping has decided to take the country totally in hand for several months by controlling with an iron hand all aspects of the population's life: economic, social, and cultural.

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Some reading

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• Hilary Clinton Sees Bitcoin as a Threat to the US Dollar – That’s the Plan Hilary. Bitcoin is a fairer system that will end America's endless wars to protect the dominance of its American dollar.

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