Agenda: JPMorgan Settlement, McDonald’s, Jobs Day

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Oct. 21 (Bloomberg) -- The ‘Bloomberg Surveillance” team engages in an in-depth discussion of the big stories of the day with Mike Mayo, bank analyst at CLSA and David Herro, chief investment officer at Harris Associates. They speak on Bloomberg Television’s “Bloomberg Surveillance.”

My mail is joining us -- mike mayo is joining us.

The outspoken analyst joins us on set.

Good to see you on this day.

$13 billion record settlement with the possibility open to terminal charges.

What does it say to you, what does it mean for jp -- jamie dimon?

We are in a new era of big brother banking where big rubber in this case will be the regulators and the government, and they decide -- big brother in this case will be the regulators and the government, and they decide who is punished so if you mess up, you will pay.

Having said that, is a completely fair jpmorgan is being -- is paying so much?

Is it because of too big to fail -- i do not think it is part of it but the goal of capital standards to try to motivate them to downside.

$2 trillion of assets is hard to understand.

But i think this issue is trying to get a cathartic event for the investment public to say, look, washington is doing something.

I am not convinced it will help the future but at least it helps to expedite a resolution.

As an analyst, you look at the stock and you have to determine whether it is worth buying or owning.

What does it do not only to jpmorgan pocket earnings power, written to -- reputational damage?

We should have gone to law school instead of business school.

I know you are a csa -- cfa.

Earnings in the last quarter were pretty decent but the eager problem is the regulatory risk.

I think it helps what it behind jpmorgan for legal risk but it does not put it all behind them.

There are still regulatory, legal, and political issues.

And there are repercussions for other banks in the industry.

Bank of america in talks to settle allegations as well, up to $6 billion.

Big brother banking.

That is where we are.

Regulatory risk comes in many forms.

Regulators were absent from the scene leading up to the crisis, and now there is this concern.

Is it priced into the shares?

My view of jpmorgan is it is dead money.

I talked to other names like morgan stanley and citigroup, which have more momentum.

With the two of you -- david herro from oakmark from the buy side and mike mayo on the sell side.

Is this a seachange moment in banking, six years out of the crisis, and then new big finance forward for the next five years question mark you certainly have to prices amid these into the businesses.

You can't assume what we have today will be what we had 5, 10, 15 years ago.

We had the political interference in the banking system that did not exist, and therefore you have to price it in.

Higher capital requirements, you have to price it in.

You now have to price in the new environment.

255,000 bodies at fortressdimon.

-- fortress dimon.

What does it mean for headcount?

It is certainly going down for wall street and the banking industry, but the diverse perspective is what will happen to the assets.

You are still seeing the worst revenue growth and u.s. banking sense of the great depression.

So, this past quarter you saw it once again.

Loans are not growing a whole lot, revenues are not growing.

The issue is has risk then removed so much, whether the legal issues, regular issues, and new rules, as do not have the u.s. banking system operate the way it should?

Do you question jamie dimon's leadership as ceo of the bank question mark jamie dimon won the war but lost the peace.

It is great during the crisis last couple of years the past couple of years.

I love the way you phrase it.

That is great.

Is he being treated fairly to the twitter question of the day?

Is he being treated fairly, or is this what he got providing a lot of assets?

Jamie dimon made a mistake, and he might be singled out.

His mistake was, when he bought bear stearns, he says he didn't think he would have to cover the mortgage legal issues for them.

And he might have gotten insurance is from the government.

Go back to "animal house" -- you trusted us, you messed up.

Jamie dimon trusted jamie dimon -- when he bought bear stearns.

The legendary mike mayo going back to "animal house." let's hear what twitter thinks of the jpmorgan settlement.

$13 billion, is it fair?

Some of the answers -- it goes to the idea of bank of america is next with potential $6 billion settlement.

Finally -- and this is something that i know richard parsons spoke to in his editorial.

Mike mayo, this is a serious question.

If anything be a future banking bailout, will the bankers be able to trust the government?

In writing -- jamie dimon should have gotten it in writing.

He had a "comfort letter." what is that?

The general counsel, default him for not representing jamie dimon?

The first roll of contract law is get it in writing.

I do fall jamie dimon and jpmorgan and the legal staff are not giving adequate protection.

My mail, great to have you here waiting in on the jpmorgan record settlement with the united states government.

He is an analyst for clsa.

On my agenda is mcdonald, set to report earnings any minute now.

The focus is on comparable sales in the united states and overseas.

It has been kind of slowing down, trickling down to a one percent growth rate.

At issue here is the dollar menu.

It is just not doing it anymore in terms of pushing sales.

The talk right now is mcdonald will have to raise the prices on the dollar menu for either two dollars, three dollar, or for dollar menu -- for dollar menu.

A cheeseburger is an incremental fee.

Do you like mcdonald's question -- the like mcdonald's? i prefer a chain that started in wisconsin -- i knew he would bring it back to wisconsin.

They are delicious.

Did you get these at lambeau field?

What you call them, fried cheese?

They are delicious.

Fried cheese curd.

My agenda for tomorrow, tuesday, jobs they.

We will have coverage for you on bloomberg television, radio.

Strange, strange, 8:30 on tuesday.

The economy is all twisted.

Are you running blind because you don't know with the economy is doing because of the shutdown?

I think the beauty of our market-based system is despite all of this political stuff -- the global economy seems to have bottomed and it is picking up a little steam.

You look at europe, japan, even china.

We have learned to deal with ineptitude of decision makers and politicians.

David herro, thank you.

Having said that, the s&p 500 right now is sitting at a record high.

You wonder how much -- the mail to miss him.

This text has been automatically generated. It may not be 100% accurate.


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