MARIA BARTIROMO: JAMIE, THANKS FOR JOINING US.
JAMIE DIMON: MY PLEASURE.
BARTIROMO: CAN YOU CHARACTERIZE WHERE WE ARE RIGHT NOW IN THIS ECONOMIC SLOWDOWN, IN THIS TIGHT CREDIT ENVIRONMENT?
DIMON: YOU KNOW, MARIA, I THINK IT’S ALMOST IMPOSSIBLE TO DO BECAUSE I’VE NEVER REALLY SEEN PEOPLE FORECAST THE FUTURE. THE REAL INFLEXION POINT IS THE ECONOMY. YOU KNOW, WE’VE HAD A PRETTY SHARP DOWNTURN. AND I THINK IT’S BEING SEEN AROUND THE WORLD. AND THE REAL QUESTION IS DOES IT LEVEL OFF FROM HERE OR DOES IT GET A LITTLE BIT WORSE BEFORE IT LEVELS OFF?
BARTIROMO: AND YOU TALK TO SOMEONE LIKE NORO RUBINI (PH), HE SAYS THAT THE WORST IS AHEAD.
DIMON: HE MAY BE RIGHT. YOU KNOW, I MEAN, AS– AS A PRESIDENT OF A COMPANY, WE PREPARE FOR THE WORST AND HOPE FOR THE BEST. SO– YOU KNOW, I THINK THE BEST YOU’RE GONNA REALLY HOPE FOR IS TWO BAD QUARTERS AND THEN A– AND THEN A RECOVERY. I MEAN, IT COULD BE WORSE THAN THAT. BUT I THINK AT LEAST THAT IS IN THE CARDS.
BARTIROMO: SO EVEN WITH THE STIMULUS PACKAGE BEING TALKED ABOUT AND, YOU KNOW THIS EFFORT TO GET THE BANKS TO LEND, A LOT OF PEOPLE SAY, LOOK, THE BANKS STILL AREN’T LENDING ENOUGH. IS JP MORGAN LENDING?
DIMON: YES. SO I DON’T REALLY THINK THAT IS TRUE ABOUT THE BANKS NOT LENDING. AND IF YOU LOOK AT ACTUALLY AGGREGATE NUMBERS, THE BANKS’ BALANCE SHEETS ARE ABOUT WHAT THEY WERE BEFORE. I SPEAK TO A LOT OF BANKERS, A LOT OF BANKS MAKING LOANS. IN FACT, JP MORGAN ALONE IN THE LAST 90 DAYS HAS MADE OVER $150 BILLION OF LOANS, INCLUDING $50 BILLION– WHICH LIKE WE HAVE OUT TODAY IN THE INTER-BANK MARKET. SO I THINK WHAT HAPPENED IS A LOT OF BANKS ARE LENDING. BUT A LOT OF OTHER PEOPLE WHO LENT TO THE MARKETS, MONEY MARKET FUNDS, BOND FUNDS, AREN’T. SO I THINK PEOPLE GET A LITTLE CONFUSED ABOUT WHO’S OUT THERE LENDING AND WHO’S NOT AND– WE’RE– WE’RE GONNA TRY TO GET MORE INFORMATION OUT ‘CAUSE I THINK IT’S A GOOD QUESTION PEOPLE ASK IS, “ARE YOU LENDING?” AND– YOU KNOW, WE ARE.

BARTIROMO: WHAT KIND OF COUNTERPARTIES ARE YOU WILLING TO LEND TO? IS IT CORPORATES, HOUSEHOLDS, OFFSHORE?
DIMON: YOU KNOW, WE’VE DONE MORE CREDIT CARD LOANS, MORE MORTGAGE LOANS, NEW ORDER LOANS– MIDDLE MARKET LOANS. WE– YOU KNOW, TO– GOVERNMENT NOT-FOR-PROFIT HOSPITALS, CORPORATE– YOU KNOW, ALMOST EVERYTHING INCLUDING, YOU KNOW– MAJOR CORPORATE TYPE LOANS TO HELP THEM FACILITATE THEIR BUSINESS ACTIVITIES.
MARIA BARTIROMO: CAN YOU LEND AT BETTER RATES NOW THAT THE CREDIT MARKET IS SO TIGHT? IS THIS A BETTER MARGIN BUSINESS FOR YOU?
DIMON: IT IS ACTUALLY– THE MARGINS ARE ACTUALLY BETTER NOW. BUT ALSO THE RISK IS ACTUALLY HIGHER. SO WE– KIND OF SET– SET EACH OTHER OFF.
BARTIROMO: I WAS TALKING TO SOMEBODY ABOUT YOU LAST NIGHT. AND THIS PERSON SAID WE’RE TALKING ABOUT THE ROUGHEST, TOUGHEST GUY IN THE WESTERN WORLD RIGHT NOW. (LAUGHTER) HE’S ACTUALLY PULLING LINES, THAT HE’S SQUEEZING PEOPLE, YOU KNOW, AIG, LEHMAN BROTHERS. THEY SAY, LOOK, YOU’RE CALLING PEOPLE– NOT YOU YOURSELF BUT SOME OF YOUR MANAGERS ARE SAYING THE ENVIRONMENT HAS CHANGED. WE CAN’T HAVE THAT KIND OF EXPOSURE ANYMORE.
DIMON: YOU KNOW, THERE ARE SOME OCCASIONS WHERE THAT HAPPENS. THAT’S ALWAYS BEEN TRUE. THERE ARE SOME LENDERS WHO SHOULDN’T BE BORROWING. THERE ARE SOME PEOPLE WHO THEIR CREDIT SHOULD BE CUT BACK. YOU KNOW, BANKS SHOULD MAKE THE MISTAKE AND SOMETIMES SAY NO TO A C– CUSTOMER, YOU’RE DOING THE RIGHT THING FOR THE CUSTOMER. SO IT’S VERY COMPLEX TO SAY YOU– YOU DID THE WRONG THING. IF YOU SAVED THE CUSTOMER FROM GOING BANKRUPT BECAUSE YOU DIDN’T LEND THEM THE MONEY, YOU ACTUALLY DID THEM A GOOD– GOOD DEED.
BARTIROMO: WELL, AS FAR AS THE TARP MONEY, WHAT’S THE POSSIBILITY OF PAYING THE TARP MONEY BACK? I KNOW YOU SAID IN THE PAST YOU DIDN’T NEED IT. THE GOVERNMENT ASKED YOU TO TAKE IT.
DIMON: THAT’S CORRECT. YOU KNOW, THEY ASKED US TO TAKE IT. AND I THINK THEY DID IT WITH AN EFFORT TO KIND OF LIFT UP THE WHOLE SYSTEM, GET CAPITAL IN THE SYSTEM. AND WE’LL NEVER REALLY KNOW HOW MUCH WORSE IT WOULD HAVE BEEN HAD THAT NOT HAPPENED. SO I THINK IT’S VERY HARD TO SAY THE DEAL THAT WAS SIGNED SAYS YOU CAN PAY IT BACK– YOU– YOU REALLY CAN’T PAY IT BACK UNTIL THREE YEARS. SO OUR INTENT WILL BE SOMETIME AROUND THEN, WE’LL– WE’LL TRY TO PAY IT BACK.
BARTIROMO: HAVE YOU SEEN ANY RESTRICTIONS AS A RESULT OF GETTING GOVERNMENT MONEY? I MEAN, A LOT OF PEOPLE SAY, LOOK, YOU KNOW, THE GOVERNMENT’S TELLING YOU, YOU’VE GOT TO PUT YOUR DIVIDEND AT THIS LEVEL. YOU CAN’T BUY CERTAIN THINGS.
DIMON: NO, THEY HAVEN’T DONE ANY OF THAT. I THINK THERE’S OBVIOUSLY A LOT OF PUBLIC ISSUE ABOUT WHAT THE PEOPLE ARE DOING WITH THE TARP MONEY. AND I THINK SOMETIMES PEOPLE DIFFERENTIATE BETWEEN THE PEOPLE WHO GOT IT AND DIDN’T NEED IT AND THE PEOPLE WHO REALLY WERE BEING AIDED AND HELPED AND SUPPORTED. BUT NO REAL RESTRICTION. WE SIGNED A RESTRICTION NOT DEDUCTING EXECUTIVE COMP AND THINGS LIKE THAT. SO, YOU KNOW, WE OBVIOUSLY ARE GONNA ABIDE BY THE RULES THAT WE SIGNED.
BARTIROMO: YOU HAVE CLEARLY EMERGED REALLY UNSCATHED OR AS CLOSE TO UNSCATHED AS YOU’RE GONNA GET IN THIS REALLY INCREDIBLY TOUGH PERIOD. BUT YOU’VE GOT REAL EXPOSURE TO THE CONSUMER. CAN YOU TELL US A LITTLE ABOUT WHAT THE CONSUMER’S DOING RIGHT NOW?
DIMON: YEAH, I WOULDN’T SAY WE’RE UNSCATHED. I WOULD SAY BATTERED AND BRUISED (LAUGHTER) BUT– BUT STILL STANDING–
BARTIROMO: I’M SORRY.
(OVERTALK)
DIMON: –AND– YOU KNOW, THERE’S A NORMAL CYCLE. AND WHEN THE CYCLE GETS BAD, BANKS ARE GONNA GET HURT. THIS HAS GOT NOTHING TO DO WITH ALL THE OTHER MISTAKES THAT WERE MADE. SO WHEN UNEMPLOYMENT GOES UP, CONSUMER LOSSES GO UP, COMMERCIAL LOAN LOSSES GO UP, COMMERCIAL REAL ESTATE DETERIORATES. AND, YOU KNOW, WE’VE SEEN THAT HAPPENING CONSISTENTLY FOR THE LAST 12 MONTHS. AND YOU KIND OF WOULD EXPECT IT’LL CONTINUE TO HAPPEN AT SOME PACE IN THE NEXT 12 MONTHS.
BARTIROMO: AND SO YOU DO THINK THAT WE WILL CONTINUE TO SEE SORT OF CONSUMERS FEEL TIGHT, HOARDING THEIR MONEY THEMSELVES. AND THAT PEOPLE ARE AFRAID THAT THE BANKS ARE GONNA START CUTTING LINES FURTHER FOR CREDIT CARDS.
DIMON: THAT’S A GOOD POINT, TOO, ‘CAUSE ACTUALLY THE LOAN DEMAND, LIKE, FOR SMALL BUSINESSES DROPPED DRAMATICALLY RECENTLY. AND SO A LOT OF PEOPLE ARE SPENDING LESS ON THEIR CARD. I MEAN, SO THE CONSUMERS CHANGED A LOT OF THEIR BEHAVIOR, TOO, AS A RESULT OF BOTH THE ECONOMY AND THE CRISIS.
BARTIROMO: YOU WERE VERY VOCAL RECENTLY AT YOUR HEALTHCARE CONFERENCE. AND IT WAS VERY WELL ATTENDED. AND YOU POINTED TO HEALTHCARE AS A MAJOR ISSUE FOR THE COUNTRY AND THAT JP MORGAN WANTS TO BE MUCH MORE ACTIVE.
DIMON: RIGHT.
BARTIROMO: CAN YOU TELL US ABOUT THAT?
DIMON: YEAH, SO THIS IS A LITTLE BIT OF AN EFFORT, YOU KNOW? PRESIDENT OBAMA’S BEEN SPEAKING ABOUT HEALTHCARE FOR EVERYBODY. WE WOULD LOVE AND I THINK A LOT OF CORPORATE CEOS IN THE SAME PLACE, WE’D LOVE TO SEE EVERY AMERICAN INSURED. WELL, I PERSONALLY THINK THAT IF YOU DO IT RIGHT, IF YOU DO IT LOGICALLY, IF THE CONSUMER HAS SKIN IN THE GAME BY– THEY HAVE REAL CHOICE THEY CAN MAKE AND THEY HAVE TO PAY FOR IT SOMEWHAT, I THINK YOU CAN DO IT BETTER FOR THE COUNTRY. YOU’LL– IT’LL BE THE MORAL THING TO DO. IT’LL BE CHEAPER. IT’LL BE MORE EFFICIENT. IT’LL HELP CORPORATIONS. IT’LL HELP– ‘CAUSE THEY NEED TO BE COMPETITIVE. AND IT’LL HELP THE CONSUMER. REMEMBER, A LOT OF THE– YOU KNOW, A LOT OF THE 50 MILLION UNINSURED, THEY GET INSURANCE IN THE WORST POSSIBLE WAY, EMERGENCY CARE AND NO PREVENTIVE HEALTH MEDICINE. AND PREVENTIVE HEALTH MEDICINE ALONE CAN DRAMATICALLY REDUCE THE COST OF HEALTHCARE.
BARTIROMO: AND HAVE YOU SPOKEN ABOUT THIS WITH WHITE HOUSE STAFFERS–
DIMON: YES.
BARTIROMO: OR WITH PRESIDENT OBAMA?
DIMON: I HAVE NOT SPOKEN TO THE PRESIDENT ABOUT IT BUT WITH SOME OF THEIR STAFF, YES.
BARTIROMO: THERE WAS SOME TALK THAT THERE WAS THIS BIG BANKING MEETING COMING OUT WITH THE PRESIDENT. ARE YOU GONNA BE ATTENDING THAT?
DIMON: I HAVE NOT BEEN INVITED TO ANY MEETINGS. SORRY.
BARTIROMO: OKAY. (LAUGHTER) LET ME ASK YOU ABOUT WHAT WAS IN THE PAPER TODAY IN THIS– JP MORGAN EXITED THE MADOFF LINKED FUNDS. YOU KNOW, GREAT FOR YOU THAT YOU TOOK A LOOK AT YOUR HEDGE FUND POSITION AND– AND WERE ABLE TO SAY, LOOK, YOU KNOW, WE WANNA– WE WANNA LESSEN THIS. BUT, YOU KNOW, YOU’VE GOT SOME EUROPEAN INVESTORS UPSET THAT THEY WEREN’T TOLD AN EXIT.
DIMON: YEAH, I HAVEN’T READ ALL THE STORIES YET. AND, YOU KNOW, OBVIOUSLY WE CONSTANTLY KIND OF GO IN AND OUT OF THINGS. AND WE HAVE VIRTUALLY– I THINK WE (UNINTEL) VIRTUALLY NO MADOFF EXPOSURE. THERE WAS ONE THAT WE HAD A LITTLE BIT. AND WE HAD SOME CHECKING ACCOUNTS AND THINGS LIKE THAT. AND– BUT I BELIEVE, AND I (UNINTEL) INFORMATION THAT THE MOST OF THE INVESTORS THROUGH US HAD PRINCIPLE PROTECTED NOTE AND THEY WILL GET MOST OF THEIR MONEY BACK. SO, I MEAN, I THINK THE QUESTION MIGHT BE, WELL, IF YOU DIDN’T THINK IT WAS A GOOD FUND, WHY DIDN’T YOU TELL OTHER PEOPLE? AND WE’RE NOT SAYING IT WAS A BAD FUND. BUT, YOU KNOW, WE DON’T INVEST IN THINGS, DOESN’T MEAN THEY’RE BAD.
BARTIROMO: YEAH, BUT THE BOTTOM LINE IS YOU LOOK AT SOMETHING AND IF IT’S TOO MUCH EXPOSURE, YOU MAKE THE DECISION TO GET OUT.
DIMON: THAT’S CORRECT.
BARTIROMO: JAMIE, THANKS FOR BEING WITH US.
DIMON: MARIA, THANK YOU.
[CNBC's "Squawk on the Street."]