2020-4-11 20:25 |
Big banks are predicting a major recession, the deepest one in the post-war era. JPMorgan Chase CEO Jamie Dimon said his bank cannot be immune to the resulting financial stress while Bank of America expects the U.S. economy to “collapse” and Deutsche Bank has forecasted a severe global recession.
Also read: IMF Declares Global Recession, 80 Countries Request Help, Trillions of Dollars Needed
JPMorgan Chase CEO: ‘We Cannot Be Immune’In his annual letter to shareholders published this week, JPMorgan Chase CEO Jamie Dimon outlined measures the bank has taken to prepare for the “actual new crisis.” Dimon admitted, “We do not know how this crisis will ultimately end, including how long it will last, how much economic damage it will do, or how fast or slow the recovery will be.”
JPMorgan Chase CEO Jamie Dimon said his bank expects “a bad recession combined with some kind of financial stress similar to the global financial crisis of 2008.” He added, “Our bank cannot be immune to the effects of this kind of stress.”Dimon further explained, “We stopped buying back our stock,” noting that halting buybacks was a prudent action. The JPMorgan CEO continued, “we don’t know exactly what the future will hold – but at a minimum, we assume that it will include a bad recession combined with some kind of financial stress similar to the global financial crisis of 2008,” elaborating:
Knowing there will be a major recession mean that we are exposing ourselves to billions of dollars of additional credit losses … Our bank cannot be immune to the effects of this kind of stress.
Bank of America Forecasts a ‘Deep Plunge’Bank of America U.S. economist Michelle Meyer wrote in a note to clients, published in March, “We are officially declaring that the economy has fallen into a recession … and it is a deep plunge.” The economist detailed, “Jobs will be lost, wealth will be destroyed and confidence depressed,” emphasizing that it is only going to get worse.
Moreover, Bank of America expects the economy to “collapse” in the second quarter of this year, shrinking by 12%. The economist opined, “Although the decline is severe, we believe it will be fairly short lived.”
Bank of America’s economist expects the economy to “collapse” in the second quarter of this year.Savita Subramanian, Head of U.S. Equity and Quantitative Strategy for Bank of America Global Research, wrote in a report published on April 2:
Our economists now forecast the deepest recession in the post-war era, and health care experts have extended the timeline for social distancing.
Deutsche Bank Predicts ‘Severe Recession’Deutsche Bank’s economists have forecasted a “severe recession” due to the coronavirus pandemic, according to the company’s report published on March 18. The bank’s team of global economists, led by Peter Hooper, is predicting a severe global recession occurring in the first half of this year, with aggregate demand plunging by about 32% in China in the first quarter. In the second quarter, the economists expect aggregated demand to fall by 24% in the eurozone and 13% in the U.S.
Deutsche Bank economists have forecasted a “severe recession” due to the global spread of covid-19.The economists at Deutsche Bank described:
The quarterly declines in GDP growth we anticipate substantially exceed anything previously recorded going back to at least World War II.
Meanwhile, intergovernmental organizations are also preparing for a severe recession. The International Monetary Fund (IMF) has officially declared a global recession that is as bad as or worse than during the 2009 financial crisis. In addition, World Bank President David Malpass said last week that the bank expects a “major global recession” due to the covid-19 pandemic.
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