The extra Jamie Dimon worries, the higher his financial institution appears to do.

As JPMorgan Chase has grown bigger, extra worthwhile and more and more extra essential to the U.S. economic system lately, its star CEO has grown extra vocal about what might go mistaken — all whereas issues preserve going proper for his financial institution.

In one of the best of occasions and within the worst of occasions, Dimon’s public outlook is grim.

Whether or not it is his 2022 forecast for a “hurricane” hitting the U.S. economic system, his issues over the fraying post-WWII world order or his warning about America getting hit by a one-two punch of recession and inflation, Dimon appears to lace each earnings report, TV look and investor occasion with one other dire warning.

“His track record of leading the bank is incredible,” mentioned Ben Mackovak, a board member of 4 banks and investor by his agency Strategic Worth Financial institution Companion. “His track record of making economic-calamity predictions, not as good.”

Over his twenty years operating JPMorgan, Dimon, 69, has helped construct a monetary establishment in contrast to any the world has seen.

A sprawling big in each Primary Road banking and Wall Road excessive finance, Dimon’s financial institution is, in his personal phrases, an end-game winner in relation to cash. It has extra branches, deposits and on-line customers than any peer and is a number one bank card and small enterprise franchise. It has a prime market share in each buying and selling and funding banking, and greater than $10 trillion strikes over its world cost rails day by day.

A evaluation of 20 years of Dimon’s annual investor letters and his public statements present a definite evolution. He turned CEO in 2006, and his first decade on the helm of JPMorgan was consumed by the U.S. housing bubble, the 2008 monetary disaster and its lengthy aftermath, together with the acquisition of two failed rivals, Bear Stearns and Washington Mutual.

By the point he started his second decade main JPMorgan, nevertheless, simply because the authorized hangover from the mortgage disaster started to fade, Dimon started seeing new storm clouds on the horizon.

“There will be another crisis,” he wrote in his April 2015 CEO letter, musing on potential triggers and declaring that latest gyrations in U.S. debt have been a “warning shot” for markets.

That passage marked the beginning of extra frequent monetary warnings from Dimon, together with worries of a recession — which did not occur till the 2020 pandemic triggered a two-month contraction — in addition to issues round market meltdowns and the ballooning U.S. deficit.

However it additionally marked a decade during which JPMorgan’s efficiency started lapping rivals. After leveling out at roughly $20 billion in annual revenue for a couple of years, the sprawling machine that Dimon oversaw started to actually hit its stride.

JPMorgan generated seven report annual income from 2015 to 2024, over twice as many as in Dimon’s first decade as CEO. JPMorgan is now the world’s most beneficial publicly traded monetary agency and is spending $18 billion yearly on expertise, together with synthetic intelligence, to remain that approach.

Whereas Dimon appears perpetually frightened concerning the economic system and rising geopolitical turmoil, the U.S. economic system retains chugging alongside. Meaning unemployment and shopper spending has been extra resilient than anticipated, permitting JPMorgan to churn out report income.

In 2022, Dimon informed a roomful {of professional} traders to arrange for an financial storm: “Right now, it’s kind of sunny, things are doing fine, everyone thinks the Fed can handle this,” Dimon mentioned, referring to the Federal Reserve managing the post-pandemic economic system.

“That hurricane is right out there, down the road, coming our way,” he mentioned.

“This may be the most dangerous time the world has seen in decades,” Dimon mentioned the next 12 months in an earnings launch.

However traders who listened to Dimon and made their portfolios extra conservative would’ve missed out on one of the best two-year run for the S&P 500 in a long time.

“It’s an interesting contradiction, no doubt,” Mackovak mentioned about Dimon’s downbeat remarks and his financial institution’s efficiency.

“Part of it could just be the brand-building of Jamie Dimon,” the investor mentioned. “Or having a win-win narrative where if something goes bad, you can say, ‘Oh, I called it,’ and if doesn’t, well your bank’s still chugging along.”

Based on the previous president of a prime 5 U.S. monetary establishment, bankers know that it is wiser to broadcast warning than optimism. Former Citigroup CEO Chuck Prince, for instance, is finest identified for his ill-fated remark in 2007 concerning the mortgage enterprise that “so long as the music is taking part in, you have to stand up and dance.”

“One learns that there’s a lot more downside to your reputation if you are overly optimistic and things go wrong,” mentioned this former government, who requested to stay nameless to debate Dimon. “It’s damaging to your bank, and you look stupid, whereas the other way around, you just look like you’re being a very cautious, thoughtful banker.”

Banking is finally a enterprise of calculated dangers, and its CEOs must be attuned to the draw back, to the likelihood that they do not get repaid on their loans, mentioned banking analyst Mike Mayo of Wells Fargo.

“It’s the old cliché that a good banker carries an umbrella when the sun is shining; they’re always looking around the corner, always aware of what could go wrong,” Mayo mentioned.

However different longtime Dimon watchers see one thing else.

Dimon has an “ulterior motive” for his public feedback, in response to Portales Companions analyst Charles Peabody.

“I think this rhetoric is to keep his management team focused on future risks, whether they happen or not,” Peabody mentioned. “With a high-performing, high-growth franchise, he’s trying to prevent them from becoming complacent, so I think he’s ingrained in their culture a constant war room-type atmosphere.”

Dimon has no scarcity of issues to fret about lately, even though his financial institution generated a report $58.5 billion in revenue final 12 months. Conflicts in Ukraine and Gaza rage on, the U.S. nationwide debt grows and President Donald Trump’s commerce insurance policies proceed to jolt adversaries and allies alike.

“It’s fair to observe that he’s not omniscient and not everything he says comes true,” mentioned Truist financial institution analyst Brian Foran. “He comes at it more from a perspective that you need to be prepared for X, as opposed to we’re convinced X is going to happen.”

JPMorgan was higher positioned for larger rates of interest than most of its friends have been in 2023, when charges surged and punished those that held low-yielding long-term bonds, Foran famous.

“For many years, he said ‘Be prepared for the 10 year at 5%, and we all thought he was crazy, because it was like 1% at the time,” Foran mentioned. “Turns out that being prepared was not a bad thing.”

Maybe one of the best clarification for Dimon’s dour outlook is that, regardless of how large and highly effective JPMorgan is, monetary corporations may be fragile. The historical past of finance is without doubt one of the rise and fall of establishments, typically when managers develop into complacent or grasping.

Actually, the graveyard of financial institution logos which can be now not used consists of three — Bear Stearns, Washington Mutual and First Republic — which have been subsumed by JPMorgan.

Throughout his financial institution’s investor day assembly this month, Dimon identified that, prior to now decade, JPMorgan has been one of many solely corporations to earn annual returns of greater than 17%.

“If you go back to the 10 years before that, OK, a lot of people earned over 17%,” Dimon mentioned. “Almost every single one went bankrupt. Hear what I just said?

“Virtually each single main monetary firm on this planet nearly did not make it,” he said. “It is a tough world on the market.”