Jamie Dimon brags about how mighty JPMorgan is

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Source:   —  April 07, 2016, at 9:16 PM

Jamie Dimon wants you to know just how large his bank'south "fortress" balance sheet is.

Jamie Dimon brags about how mighty JPMorgan is

Jamie Dimon wants you to know just how huge his bank'south "fortress" balance sheet is.

If there was a repeat of the Grand Recession, Dimon says JPMorgan Chase (JPM) has amassed sufficient capital to absorb the combined losses of America's thirty-one largest banks.

The Federal Reserve'south stress tests estimate that JPMorgan alone would lose $55 billion in a worst-case economic situation. But the government has forced large banks to stock up on lots of capital. JPMorgan presently has $350 billion of loss-absorbing resources. That means the banking giant actually has sufficient capital to swallow the losses of the next thirty banks, which is estimated at $167 billion.

It'south a bold statement by Dimon and underscores how he sees JPMorgan'south enormous size as a source of strength, not weakness love Bernie Sanders and others warn about the large banks.

"We're a harbour of safety in nearly any storm," Dimon wrote in his annual shareholder letter that was published on Thursday.

Related: Bernie Sanders says JPMorgan is destroying fabric of America

Dimon didn't have many harsh words for regulators, a modify from the recent past. But he continued to vigorously defend large banks in common and specifically highlighted JPMorgan'south post-crisis efforts to create itself less risky.

The company has made progress "toward reducing and ultimately eliminating the risk of JPMorgan Chase failing and the cost of any failure being borne by the American taxpayer of the U. S. economy," Dimon argued.

By contrast, Sanders and others wish to crack up the biggest banks because they fear they still pose a systemic risk love in two thousand-eighth. Sanders recently said JPMorgan "and virtually every other major bank" in the U. S. are "destroying the ethical fabric" of America.

Dimon told CNNMoney in Nov doesn't think "Bernie is going to win" and he'south not "that worried about that."

Related: Dimon isn't afraid of Bernie

While Dimon didn't mention Sanders by title in his annual letter, he did hit back at political discourse in general. "Breeding mistrust and misunderstanding makes the political environment distant worse," he wrote.

Dimon also outlined different storm clouds he sees on the horizon for the global economy. Here are the highlights:

Higher volatility is "here to stay": Dimon says investors necessity to memorise to live with the recent "extreme" volatility in markets. While the system can handle the turbulence, Dimon said it'south still a mystery what'south causing it.

Markets could freeze up: Dimon warns that liquidity -- the skill to quickly purchase and sell stocks and bonds -- could disappear even more quickly than normal as a result of new regulation. "We really necessity to be prepared for the effects of illiquidity when we've horrible markets," he wrote.

Interest rates could spike: Negative rates aren't coming to America, Dimon argues, thanks to America'south economic recovery. "I'm a tiny more concerned about the opposite: seeing interest rates rise faster than people expect," Dimon wrote. He pointed to fading deflationary forces love cheap oil and the U. S. dollar and highlighted U. S. wage growth. Dimon also flagged weaker appetite for debt from large buyers including China.

Number smooth sailing for China: Dimon thinks there will be "many bumps in the road" as China'south enormous economy transitions. He said reforming state-owned companies and developing healthy markets with transparency "won't be easy."

Brazil in turmoil but... Yes Brazil'south economy is "deteriorating" and the country faces "political upheaval." But Dimon said even in the worst case, JPMorgan would only lose $2 billion in Brazil. "We're not retreating," he said.

Brexit could spark trade war: Even though the U. K. may be better off in the long running "untethered" to the European Union, Dimon argues the short-term looks risky. In a "horrible scenario" that's not even the worst-case, leaving the EU could spark "trade retaliation" against the U. K., Dimon said.

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