JPM’s Jamie Dimon, other bank CEOs give gloomy 2023 forecasts

Yahoo Finance Live anchors Seana Smith and Dave Briggs review economic outlooks published by various Big Bank CEOs and their forecasts on inflation and the crypto market.

Video transcript

DAVE BRIGGS: Tuesday felt a bit like doomsday when it comes to the economy. Why? Well, the big bank CEOs were out in force across different conferences, and one common thread emerged-- pessimism.

JPMorgan Chase CEO Jamie Dimon did not forecast a hurricane, but he does see, quote, "inflation eroding everything" and says consumers have a half trillion dollars in savings that will run out sometime mid next year, adding that it may very well derail the economy and cause a mild or hard recession that people worry about. Dimon says customers are spending 10% more than in 2021.

Goldman Sachs CEO David Solomon, quote, "you have to assume that bumpy times are ahead," suggesting you have to be a little more cautious with your financial resources, with your sizing and footprint of the organization. He also suggested some layoffs could be ahead.

Bank of America CEO Brian Moynihan says research suggests 3/4 of negative growth next year and sees consumers spending more now than a year ago, but that that rate of growth is slowing. And Seana, it's just one of those days where you feel like you ought to start stuffing your lunch money down your pocket and saving for some rough times ahead. No one is speaking optimistically about what's ahead in '23. None of them.

SEANA SMITH: Yeah, no, there certainly is a lot of caution. We heard it from a lot of the larger bank CEOs earlier today. Brian Moynihan, I want to take a look at Bank of America. That stock, Dave, having its worst day since March. I'm putting this in perspective with what we heard from Brian Moynihan earlier today. There's also some comments that he made about future hiring or, really, lack thereof, saying that the company could potentially slow or will be slowing its hiring as fewer employees leave.

There was also the CNBC report earlier this afternoon, saying that the Bank is cutting 2% of its global workforce. Investment banking fees, like you were saying, has taken a significant hit at Bank of America. They expect those investment banking fees to be down 50% to 60% in the current quarter. There was a little bit of optimism--

DAVE BRIGGS: Oh, please.

SEANA SMITH: --in his voice if we do want to end on--

DAVE BRIGGS: I missed that.

SEANA SMITH: --that upbeat note. Investment banking pipeline, he's saying, should open. So--

DAVE BRIGGS: OK.

SEANA SMITH: --should open investment bank, the investment banking division clearly taking a massive hit in 2022, saying that it should open. We don't exactly know when. I was searching for anything. I know you love all that positive news.

DAVE BRIGGS: Well, I was happy to hear Ray Huang tell us yesterday that he thinks the IPO market will bounce back strong next year. We have seen no real glimpse of that, but he's confident in his talks with chief digital officers, at least, across big technology.

But why do we care so much? And it is obvious, but to remind you, because people like Dimon get such an accurate glimpse, not just at the macro, not just at companies, but a look at the consumer, how much they're saving, how much their credit balances are rising, how much their spending is going up or down. And it's hard to ignore all five big bank CEOs predicting some form of recession in '23.

SEANA SMITH: It certainly is, and it's also I want to bring up some of the comments that we heard about crypto, because that has been such a huge story in recent weeks. Now, Jamie Dimon also giving his take on where we stand. He called crypto tokens, quote, "pet rocks." And drilling down a little bit more, he said, why do we allow this stuff to take place? See, but this was all in an interview with CNBC earlier this morning.

And back in September, he told lawmakers, cryptocurrencies are decentralized Ponzi schemes. On the screen right now is actually an excerpt from what we heard from David Solomon. He's the CEO of Goldman Sachs. In a Wall Street Journal op-ed earlier this afternoon, he wrote that the excitement of the past weeks shouldn't distract us from the opportunity at hand. This is a bit of a different take. It is, though, very important to point out David Solomon was talking about blockchain, whereas Jamie Dimon's comments were specifically referencing cryptocurrencies.

But Solomon went on to say that under the guidance of a regulated financial institution like ours, blockchain innovations can flourish. So still some value in blockchains, at least what David Solomon has been saying. Jamie Dimon, it's important to point out, he has said that he does see value in blockchain in the past. A lot of that skepticism, though, specifically comes with the cryptocurrencies for that.

DAVE BRIGGS: And just about any of those big bank CEOs tell you that same thing, that they see intrinsic long-term value in the blockchain, but almost none of them, at least at this point in time, will speak bullishly about crypto. And that analogy of pet rocks really stuck because it's just who determines the value of it. It's built on no fundamentals. It's rising and falling on no real news.

And I don't think we've truly seen the contagion, the true fallout of FTX, but each day, we're learning a little bit more as companies feel a little bit more unstable, and now predictions that Bitcoin could crash and lose some 20% or 30% over the next year. No bullishness-- bullishness, rather, in that crypto space, anywhere in sight. Pet rocks for tokens, love that.

SEANA SMITH: Yeah, not good if you're a crypto investor. Certainly, it's been a very volatile several months. But going back to some of those calls out there, Standard Charter saying that Bitcoin could fall to 5,000. So if they, in fact, are correct, we have a lot of downside--

DAVE BRIGGS: A long way to go.

SEANA SMITH: --to go until we see-- potentially see things turning around.