The Arab Spring: Tragic event, or unfortunate setback?
Re-reading can lead you to real gems. Going back over JPMorgan’s annual letter to shareholders, I couldn’t believe that the first time around I missed this quote in the third paragraph of the first page:
In addition to the ongoing global economic uncertainty, other traumatic events — such as the earthquake and tsunami in Japan, the debt ceiling fiasco in the United States, revolutions in the Middle East and the European debt crisis — have impeded recovery. In the face of these tragic events and unfortunate setbacks, the frustration with — and hostility toward — our industry continues. [emphasis added]
There are a lot of ways to describe the Arab Spring. Most do not imply that it was either a tragic event or an unfortunate setback, but Jamie Dimon does. Or, at least, what his ghostwriters did. As a human being, that’s a pretty callous way to describe a series of popular uprisings against autocratic governments. But let’s think like Jamie Dimon. As the Chairman and CEO of a global financial institution, does it make sense?
In a very limited sense, yes. The Arab Spring probably played a role in spiking oil prices. Here’s a chart of Brent crude prices from 2009 to April 2012, from EIA stats:
Oil prices clearly rise starting in the winter of 2010/11, when the Arab Spring began in Tunisia. And they have stayed at more or less elevated levels since. That makes sense given that the overthrows of autocratic governments come with uncertainty and economic disruption. Still, there’s a strong case that overthrowing repressive regimes with calcified economies would be a good thing for markets.
And then there’s the even stronger case that, irrespective of market impact, the Arab Spring is good. But Jamie Dimon will leave those ideas to whatever small portion of his thoughts are not filed under shareholder value.