Jamie Dimon Says He's Unsure If Elizabeth Warren Understands Global Banking System

JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon took aim at U.S. Senator Elizabeth Warren, a critic of large banks, as he expressed broad concerns about leadership in Washington.
“I don’t know if she fully understands the global banking system,” Dimon, speaking Wednesday at an event in Chicago, said of the Massachusetts Democrat. Still, he said he agrees with some of her concerns about risks.
Warren, a Senate Banking Committee member, has won popular support and gained influence in her party by openly challenging the size of large lenders and their political power. She has said it was a mistake for the U.S. government to refrain from breaking up big banks, such as Citigroup Inc., after the 2008 financial crisis. Last month, as firms including JPMorgan pleaded guilty to resolve probes into market-rigging, she criticized regulators for granting waivers that let the companies continue operating certain businesses.
Dimon, who runs the largest U.S. bank by assets, said he would meet with Warren any time she wants. A spokeswoman for the lawmaker declined to comment. In an April speech, Warren, a former professor, chided “finance guys” who assert she and others can’t grasp their business.
“The finance guys argue that if you’re never in the club, you can’t understand it, but I think they have it backward,” she said. “Not being in the club means not drinking the Kool-Aid.”

Asia's Small Businesses Really Love Skype

Businesses from Vietnam to the Philippines are turning small budgets and traffic jams to their advantage by harnessing employees' familiarity with online platforms to exploit the latest and cheapest technologies to boost productivity.
A Microsoft-backed survey found small and medium firms in emerging economies in the Asia Pacific embracing tools such as Skype, Dropbox and Whatsapp more readily than their peers in advanced nations. Vietnam and the Philippines topped the region in using four or five such online tools, including e-mail, social networking, file sharing, document collaboration and virtual meetings, according to the survey of 10 countries excluding China and India.
Of the 2,000 respondents from small and medium-sized businesses, about 80 percent from Vietnam and the Philippines said they used four or five of these tools, compared with 35 percent in Australia and 40 percent in Taiwan.

China Industrial Output Gains in Sign Economy May Stabilize

China’s industrial production gained momentum in May while growth in retail sales kept pace with the previous month, showing signs of stabilization in the world’s second-biggest economy.
Industrial output rose 6.1 last month from a year earlier, the statistics bureau said Thursday, accelerating from 5.9 percent in April and beating the median estimate of 6.0 percent in a Bloomberg survey. Retail sales added 10.1 percent in May, while fixed-asset investment excluding rural households climbed 11.4 percent in the first five months.
“A stabilization in production, or a modest acceleration, shows that the Chinese economic performance won’t be bad in the coming months,” said Li Wei, China economist for Commonwealth Bank of Australia in Sydney. “Both industrial production and consumer spending are likely to turn better in the second half of this year.”
The numbers broaden the view on the economy after inflation and trade data released earlier this week showing a sluggish domestic environment. Signs that the economy may be bottoming amid its weakest growth since the 2009 global recession could be enough to keep the People’s Bank of China on the sidelines as it waits to see the impact of interest-rate cuts and loosened fiscal policy.
The Shanghai Composite Index rose immediately after the data, before declining 0.3 percent as of 1:55 p.m. local time. The statistics bureau said after the release that demand is still weak and the base for the pickup in industrial output isn’t solid.
“The lack of funds and insufficient new projects are the key factors weighing on investment growth,” the bureau said in a statement.
Bloomberg’s monthly gross domestic product tracker, a weighted average of monthly economic indicators, rose to 6.55 percent year-on-year in May from 6.4 percent in April.

Pimco May Have Averted Fire Sale After Gross’s Exit

When Bill Gross stepped down from the Pimco Total Return Bond Fund in September, traders across Wall Street anticipated that the world’s biggest bond fund would be forced to dump holdings at fire-sale prices to meet record client withdrawals.
So why didn’t it happen? One explanation, according to a regulatory filing last month, may be that Pacific Investment Management Co. held the fund’s clearance sale in-house. The firm sold about $18 billion of Total Return’s assets to other Pimco funds and accounts between October and March, helping it meet more than $100 billion of redemptions that followed Gross’s surprise exit.
Pimco, among the largest bond managers with about $1.6 trillion in assets, made use of a provision in the Investment Company Act of 1940 allowing funds within the same family to trade with one another under limited circumstances. Such cross trades are tightly regulated because they pose potential conflicts of interest, and can only be done if they’re beneficial to the buyer and seller. In this case, their use may also have limited the fallout in areas of the bond market where the fund traditionally held large chunks of debt, such as Treasury Inflation Protected Securities, or TIPS.
“There was this perception that Pimco would have to dump stuff on the marketplace and that just kind of tanked prices,” said Claude Erb, a former fund manager at TCW Group. “Pimco’s forced selling did not materialize,” though, “so things recovered fairly quickly.”
Agnes Crane, a spokeswoman of Newport Beach, California-based Pimco, declined to comment.