Monday Moneybeat: JPMorgan Chase update

MARY REICHARD, HOST: Next up on The World and Everything in It: The Monday Moneybeat.

NICK EICHER, HOST: Time now to talk business markets and the economy with financial analyst and advisor David Bahsen. He is head of the wealth management firm, the Bahnsen Group. And he is here now, David, good morning to you.

DAVID BAHNSEN: Good morning, Nick, good to be with you.

EICHER: Well, David, just by way of an update on JPMorgan Chase, and for the benefit of the listener who may be unaware, you put forward last week a shareholder resolution calling on JPMorgan Chase, to investigate whether the bank has adopted a policy of so called de-banking. Now, that is canceling the accounts of Christians and conservatives for ideological reasons. And when we talked last week, you were predicting that that resolution would not succeed, but that at least going through these motions would call attention to an obvious and serious problem. So David, maybe just start off by telling us how things went last Tuesday.

BAHNSEN: Yeah, I was really encouraged in the sense that, um, the, the Board of Directors, particularly by the way, CEO Jamie Dimon, he specifically addressed my resolution at the shareholder meeting and his argument for denying it was not No, no, no, we want to be able to keep doing this. We want, you know, some of these religious groups to be scrutinized. Their reasoning is that they didn't want to do an investigation and follow my resolution, the reasoning is because they're not doing it and wouldn't do it, and if he ever finds out they’re doing it, he's going to fire people. So I think that if they were saying, we want to be able to close people like Sam Brownback’s account, it would be a discouraging thing. Now, if they're doing it and denying they're doing it, that's not exactly great, either. But my point is that they are now really on the defensive. I mean, there has been substantial national widespread scrutiny that has the CEO of the largest bank in the country, promising they won't do it again. And I believe that heads will roll if there is additional activity like this. I think this was lower level and regional level woke risk officers and branch managers making individual decisions in certain select cases. And that JPMorgan doesn't have the checks and balances in place to keep it from happening. And so this required some national attention and national attention we gave it and I'm encouraged.

EICHER: All right, David, well, off the top, what would be your big story of the week?

BAHNSEN: Oh, I don't think there was much as far as macro economic news that came out this week, most of the media attention is on the debt ceiling discussions. And I think it's rather obvious that they're in the midst of one of these kinds of painful back and forth negotiations, the deals generally have to die before they come back to life. And that's what will happen here as well. Both speaker McCarthy and President Biden assuring that there won't end up being any kind of a default situation, I mostly find this to be more of a media story that the media coverage of it is so intentionally ignorant and reckless. It's somewhat troublesome, but I can't say it's surprising. And that and so there's a lot of attention around where that is headed. And yet, there was the biggest up week in the stock market and a couple of months. The bond market is obviously not pricing in any kind of a default, you know, yields have dropped, bond prices have gone higher. And we'll there were a couple of Fed governors this week that were coming out saying, Hey, we think we want to keep rates going even higher, although Chairman Powell came out and talked a little different tune Friday. So they're getting some messaging out there from Fed governors to try to see how financial markets respond.

EICHER: Yeah. So to clarify, I listened to the Powell comments Friday of last week, and I was hearing the possibility of a pause. But what is the messaging that you think the Fed is trying to send here? How were you reading it?

BAHNSEN: Well, I don't think that they're trying to do one message. I think that they're trying to put a few messages out there and see how the markets respond to different messages at the Fed Funds Futures is real money from real people, forecasting what they think will really happen and I tend to use the futures market as a heavy indication, and the futures market is reflecting or implying, almost assurance that there will be a pause at the next meeting, but some possibility, it's you know, in the 20% range of one more rate hike. But then what is really interesting is that there is a 100% chance in the futures market have some rate cut from the current level by the end of the year, and actually like a 40% chance of rate cut by July. So that's basically the market saying the Fed will either pause here or maybe even do one more. And then the recession or recessionary indications Come on, the Fed will panic and start cutting the other way. And that's what the market believes is going to happen.

EICHER: All right, and let me mention this morning, we are on the campus of Dort University here in Sioux Center, Iowa. Today is day one of the world journalism Institute collegiate and early career class of 2023. It is an especially interesting time to be in Iowa, because you just never know when you'll get a presidential candidate visit Ron DeSantis, for example, was right here in this little town just about a mile away from where we are now. But, David, I wonder whether you might have a word of encouragement to journalism students, and maybe those who might be interested in a career reporting on business, economics and finance, because we are deliberate about identifying and developing students like that. What would you say, David to this new generation of journalists?

BAHNSEN: Well, there's a lot I would like to say, and if any of them want to become financial media journalism, which by the way, there's more money in financial media journalism than there is in normal media journalism. But if they go into financial media, I would like to say that it is immoral to use fear mongering as a way of getting clicks and ratings. But primarily, as of course, the world journalism Institute, knows advocates and teaches there is such thing as objective truth, and you shall know the truth and it will set you free. I think that this is a big problem. The tendency for the whole society and it's evidenced in our media to hold the idea of objectivity and truth in disdain. And I think that people entering this profession with a high regard for objective truth can change the world.

EICHER: Well, David Bahnson is founder managing partner and chief investment officer of the Bahnson group. His personal website is bahnsen.com his weekly dividend cafe you can find at dividendcafe.com. David, thank you. I hope you have a terrific week.

BAHNSEN: Same to you, Nick. Good to be with you.

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