JPMorgan: "Large Parts Of Society Are Not Seeing Any Growth In Income And Job Opportunities At All"

Tyler Durden's picture

Last week, BofA's HY credit strategist Michael Contopoulos, laid out a list of the four things that keep him up at night, which included:

1. Zombie Companies And Massive, Rising Student Debt Loads 

2. Sliding Used Car Prices, Rising Delinquencies And Subprime Defaults

3. Declining Loan Growth, Lack of commodity rebound and tighter balance sheet

4. Lack of Investment, No Small Business Creation And No Earnings growth

(there was more in the full article)

Having let the genie out of the bottle, just 24 hours later it was JPM's turn to unveil its own answer to this same question, and in his weekly Froday note, JPM's Jan Loeys said that when it comes to what "keeps the bank up at night" in the context of the bank's economic outlook "regime change is the main risk."

While that in itself is hardly unexpected or new, what we found surprising is that even JPM now admits that "large parts of society are not seeing any growth in income and job opportunities at all and thus demand change"  and as a result "regime change could thus come from politicians deciding we have gone too far in the trade-off between stability and growth."

And in a preview of things yet to come, JPM concedes that "the anger of those left behind by slow and stable growth could lead to more populist measures that eventually give us both less stability and less growth."

Or, alternatively, just wait until all those who voted for Trump in hopes of a radical systemic overhaul, end up being disappointed.  That's when the real regime change will begin.

Here is the full excerpt from JPM's note explaining what keeps America's most valuable bank up at night:

The most frequent question we receive from you today is: What keeps us awake at night? To us, the main risk to our strategy and markets is a change in what we like to call the regime we are currently in.

The regime we believe we are in is one of a slow and stable global expansion, with cautious economic agents, conservative fiscal authorities, and determined central banks that provide easy money, but retain strict control on financial leverage. We note there are many potential shocks, from political turmoil to policy errors, that could disturb markets, but we will treat them as just volatility that should not affect our strategy if these shocks do not change the regime we are in. The shocks that keep us awake are the ones that could change the current regime into another one.

  • Regimes do not last forever. Some die because they do not deliver the goods to society and voters demand change. Some die of their own success. The Global Moderation Regime from the mid-80’s to 2007 brought good growth, low macro volatility and shallow recessions. The longer it lasted, though, the more agents assumed it would be forever, thus inducing them to apply less caution and more leverage. This ultimately made the regime vulnerable to a regional fall in house prices in 2006-07 that would otherwise not have done that much damage.
  • We note the current slow-and-stable regime risks coming to an early end if too many economic agents are dependent on easy money, or if it does not deliver the goods to society. This analyst thinks the latter risk is more acute as large parts of society are not seeing any growth in income and job opportunities at all and thus demand change.
  • Regime change could thus come from politicians deciding we have gone too far in the trade-off between stability and growth, and that it is time to let companies and banks loose, through deregulation and tax reform/stimulus. Alternatively, the anger of those left behind by slow and stable growth could lead to more populist measures that eventually give us both less stability and less growth.
  • The alternatives to our Slow-and-Stable regime could thus be called Growth, and Populism. Slow-and-Stable has been good for both equities and fixed income, with equities outperforming. A Growth Regime could boost equities even more, but would likely hurt fixed income badly as it would bring more inflation and monetary policy tightening than investors are prepared for. Populism would likely hurt both equities and bonds.

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Giant Meteor's picture

wow, that is good to know ..

vato poco's picture

feature, not a bug. 

can't have neofeudalism without serfs, now can ya

His name was Seth Rich




remain calm's picture

So the regime, TPTB, that has been in power the last 50 years gave us this shit pot economy. But if we elecect a populist it will get worst. Hey JPM go fuck ypurself.

Croesus's picture

Geeh, it's nice to know that "the people who caused the problem" have seen a consequence of it.

I honestly cannot wait for the day when bankers are jumping from the rooftops; I'll hopefully have a chance to throw a few off myself, but I'm saving my real hatred for the politicians who sold us out.

Kill every last damn one of them.

Love this:

"Populism would likely hurt both equities and bonds."

So, in order to be considered a real Patriot, we should all change our views, to suit the needs of the bankers...because ONLY "paper assets matter".

Who gives a shit if you're starving, as long as bankers turn a profit.

Twee Surgeon's picture

What the fuck is this bullshit ? As plain as fucking day and they are doing a 'Discovery by carefull analysis' , Shtick !

There is no mystery about why everything is going Tit's-Up, at least not for the at least Vaguely coherent fuckers on the planet.

Free fucking cash window for club members. Free fucking cash window for club members. Free fucking cash window for club members.

Ad Infinitum.


My Lawnmower is fucked... Can I get a Bailout ?

Giant Meteor's picture

Heh, funny you mention lawn mowers ..

Sonny and I were out and and about almost two years back, and picked up one (lawn mower) off the curb. It seems there was a bit of twisted metal off the body, that was down in such a way to make it impossible to move or mow grass. It looked in pretty good shape otherwise, so we load it into the truck, took her home, and performed surgery with channel locks and a sawzall. 1 minute surgery, a bit of gas, oil check, and vroom, starts right up. Just finished using it today, and she purrrrrrr's like a kitten. Second seasons use ...

As it so happened, I was needing a replacement at that exact time.

Told the kid just the other day, never pay retail ...


Delving Eye's picture

Hey, Giant Meteor, hello!! I've been wondering how you've been doing. Feeling better? I guess if you're mowing the lawn, you are. Excellent!!

All the best, Delving


AtATrESICI's picture

For sure, Seth Rich will not be seeing any growth in income and job opportunities at all. I sincerely hope we can thank the hilldog and Co. for that one very soon.

I would like to give a preemptive F.U. to the demon shift trolles. The parental units' basement is a great backdrop for torches and ropes. I would suggest a google search on how to tie a noose. Once you have noose tying under your skirt please try your handywork firsthand, provide a live stream, and share the url with ZH before you begin with your testing.


Goldenballs's picture

And of course this has SFA to do with the bankers asset stripping western economies and dumping all the loot in tax havens.Lowest interest rates for 500 years ( theft of capital,past labour and security for the mass of the sheeple) and the slowest " RECOVERY " ( Substitute Depression ) in 500 years has nothing to do with A **e !!!!!!!!!!

Lordflin's picture

Exactly what universe is the author living in... not this one... he must be a visitor...

neidermeyer's picture

I want to work for JPM/The FED ,, you only have to be FORTY FREEKING YEARS LATE on your data ...  My mother with dementia knew this decades ago.

Cordeezy's picture

So they are saying " we screwed the majority of the people over for too long now they are turning to people like Trump for help"

VWAndy's picture

 Big government is always looking for people. Stupid is the new growth sector! Its well funded too!

ipsprez's picture

This entire problem is due to the greed of corporate ownership and collusion/corruption in government that has allowed the destruction of blue collar jobs (that pay a living wage) in America. One more comment, they should have added cost of medical to their charts. That would have really shown how fast and large the affordability gap has become

Hobbleknee's picture

I just got a raise, and it was completely eaten by tax increases and then some.

*lives in Sweden*

NoPension's picture

Your Government.....and an anonymous slacker thank you.

Shpedly's picture

Seriously, they really have killed any incentive to work your ass off to make more money.

WillyGroper's picture

""the anger of those left behind by slow and stable growth could lead to more populist measures that eventually give us both less stability and less growth."

i think the pic is a bit less rosy than that...stability.

hope i have enuf popcorn for when someone puts jaymeedemon's head on a pike.

Yen Cross's picture

  Slow and Stable to JP Morgue= $16 trillion in central bank balance sheet expansion over the last 7 years.

Yars Revenge's picture

I wonder if this increase in economic inequality could be attributable to the international banking cartel siphoning off trillions over the past decade?

Hapa's picture

So that's what it comes down to - we can have either growth or populism.  Banker wankers always want to create the false narrative.  The system is set up to push it as hard as it can.  When it breaks, the pitchforks come out.   Nice plan.

Deep Snorkeler's picture

The Human Genome Full of Errors

Doomed as a species.

The collapse of Western culture,

economic stagnation,

sins against nature,

Zika-infected minds,

a dead educational system.

There is no caution,

we are getting to where

we are going, faster.


CRM114's picture

Evolution is a remarkably slow process. All our nature is still suited to survival in small groups, running around the savannah.

We would not have got this far if everyone had a brain and courage. Small, uneducated groups work best with a leader, a couple of subordinates, and the rest as trusting followers.

I spent 12 years surrounded by nothing but highly intelligent, courageous, cunning, trained killers. It only worked because we were all carefully chosen to work well together and share the same noble objectives.

Without that, we'd have all killed each other in no time. Human evolution has given us mostly sheep. All sheep or mostly wolves both died out.

However, we are now in a situation where the power of language and persuasion, and the general absence of continual real threats, has meant that brave, dedicated individuals are no longer the leaders. The nations are led by fast-talking, spineless, selfish ba@stards. The sheep, in a supposed democracy, are now a liability from a survival viewpoint.

We know what happens next.

youarelost's picture

talking down the economy just like they did for 4 years when Bush was in. Progressive assholes

imapopulistnow's picture

The elites and deep state are too adept at manipulation of the masses. I do not see a populist uprising. When the collapse happens, the elites will see to it that the masses assign false blame on ficticious villians.

Fundies's picture

What kept the banks up at night ?...........bailout Viagra.

CRM114's picture

What keeps banks up at night is that their heads will be on spikes in the not too distant future.

I'd say they have a valid concern. What's interesting is that it hasn't changed their behaviour, yet.

Karl Marxist's picture

Hey, Dimon, could that be in part because of your "too big to fail" rubbish?

Sudden Debt's picture

large parts of society are just lazy and afraid that something might change in their comfort zone.


We're at the peak of society, if you fail now you've only got yourself to blame.

Remember when America was about "all you can be"? Well, now it's "be fat and lazy and pray for the best"

CRM114's picture

"the anger of those left behind by slow and stable growth"

There is no growth, except in the growth industry of manipulating statistics.

People are not buying things, not with real money.

People don't have jobs, not ones that pay anything.

Eventually, the ponzi scheme must crash.

The only thing we all want to know is when.

"I'm just looking for clues, at the scene of the crime"

Good old Joe, Life has been good so far.

Personally, another 6 or 7 months and it can crash whenever it likes.

Dilluminati's picture

Last raise?  

Don't remember one.

I create my own by spending less.

Now onto cutting $30/month of waste.  (good day)


small axe's picture

"what keeps the bank up at night" is the little kernel of fear behind the locked doors of every megamillion hedgie home that perhaps, just perhaps, tonight is the night when the serfs figure out the scam and come calling with pitchforks and rope.

gigadeath's picture


Umh's picture

JPMorgan finally heard the choir. Maybe they should shut up more often. Wag more and bark less.

Sonny Brakes's picture

I thought it was just me. I'm wondering if the BLM are following where the jobs are coming from and who's getting them? What if the job postings aren't actually being filled?

SilvaDolla's picture

Newsflash!!! Whoa! J.P. Morgan finally realized why their profits are down and it's because they're hoarding 'wealth' so vast that the bottom 98% has no money.

Fucking brilliant, Guys! Good Job. The NEXT problem they won't see until it's too late: How to breath with a broken neck while dangling from lamp posts.

Archive_file's picture

I'm going to roll a joint and take a nap in the park...

gregga777's picture

JP Morgan: "Large Parts of Society Are Not Seeing Any Growth in Income And Job Opportunities At All"


That's because the Goldman Sachs Feral Reserve System, the banking gangsters, CON Street Swindlers and the Crony Capitalist CONporations are stealing everything for themselves.  That's something that the banking gangsters at JP Morgan should know all about.  

gregga777's picture

To Big To Fail means Too Big To Jail


Globally Systemic means Above The Law


I hope that the banking gangsters at JP Morgan remember that when the mobs with pitchforks, torches, lots of guns and lots of rope come a'calling to deliver street justice to all of the "above the law" banking gangsters and CON Street Swindlers.

thisguyoverhere's picture

You living in the 1950s?

The millitary has wave form weapons that would appear to be 'signs from god' to your local athiest chapter.

Heart attacks or arythmia; nervous system damage; hearing voices, buddy you name it they have it. Plus Quantum computers, older 1024 model which have a livre earth simulator that predictively interprets future events with all the data it collects.

The new 4096 model willnbe run at CERN and LHC to open additional dimensional portals. They've already extracted dark matter and data is pouring in from the portals already opened. The power used at these sites makes the hydrogen bomb look like an incandescent light bulb.

Make no mistake about it the weapons programs at CERN and LHC are unimaginable, but go ahead and tell me about guns.

shovelhead's picture


And I'm still worried about the 'Men That Stare at Goats'.

CRM114's picture

As someone who's been to CERN, and understands it, could I just say "Bollocks"?


gregga777's picture

100% of the blame goes to the criminals at the Goldman Sachs Feral Reserve System.  Those in their "club", like the Musks, Ackmans, Cohens, etc., get $ billions at 0% interest.  Those with the least are the ones paying for that.  The motto of the Goldman Sachs Feral Reserve System is:


"We steal from those who can least afford and give it to those who least deserve it."


The Musks, Ackmans, Cohens, etc., don't even say "Thank You" to all the suckers who fund their lavish lifestyles.  

Snout the First's picture

Its fine for the politicians / bureaucrats in DC and the bankers in NYC, so what's the problem? Its not as if anyone besides these two groups matter (at least to them).

XRAYD's picture

Of course, now JPM, GS, Blackstone will only be too happy to design programs to creat jobs, get rich again, and crash the system.


Rinse, repeat, rinse ... !

OKUSA's picture

Impossible! I just saw where a bimbo on the Faux News channel said stocks were at all time highs.

Let it Go's picture

The real economy is what exist somewhere far from Wall Street and can be seen in parts of America where most of us live. After eight long years of near or zero interest rates, massive government deficits, and watching tons of money and stimulus being poured into the economy we remain mired in slow growth.

In the end  our future has a way of being tied to reality and certain economic laws as well as laws of nature that hope and delusion cannot defy. While these bonds can be ignored for a time the force they have over us at some point will suddenly pull us crashing to the ground. More details in the article below.

milking institute's picture

Populism is very popular with the population but not with the elites,that's why it's called populism...