On day three of the Fortune Global Forum, which focused on global risks and opportunities, three bitcoin enthusiasts rhapsodized over breakfast about how a stateless digital currency could change world finance.
But a few hours later, JPMorgan CEO Jamie Dimon – weathered by a decade of costly encounters with regulators – brought their high-flying hopes crashing to earth,
“It’s just not going to happen. You are wasting your time. When the DOJ calls and says, ‘It’s an illegal currency and it’s against the laws of the land, and if you do it again, we will put you in jail,’ it’s over.
“There will be no real-time, non-controlled currency in the world. There is no government that is going to put up with it for long. It’s kind of cute now, a lot of senators and congressmen will say ‘I support Silicon Valley innovation,’ But there will be no currency that gets around government controls.”
Dimon went on to say the blockchain technology used to transport the digital currency could have many uses, and he said his bank is part of a consortium exploring its potential. The blockchain may even be used to transport currency, he said, “but the currency will be U.S. dollars.”
Dimon ended the three-day conference on an optimistic note. Asked for final advice for the group assembled in San Francisco, he responded: “Don’t be so damned depressed.” Leaders have been programmed to be risk averse since the financial crisis, but the economic forces are generally in America’s and the world’s favor.
“We have all become risk experts and are afraid of our own shadow at this point. Move on. The world is going to be fine.”
More news below.
• Yellen: Rate Hike “a live possibility”
Fed Chair Janet Yellen told Congress that a move to increase interest rates for the first time in nearly a decade could be a real possibility next month. The remarks come a day after GOP presidential candidate Donald Trump claimed the Fed kept rates low as a favor to President Obama, a charge that has been dismissed by officials at the White House. Yellen added that a rate decision would depend on economic reports in coming weeks. USA Today
• Expedia to buy HomeAway
Expedia has agreed to pay about $3.9 billion in cash and stock to buy vacation rental site HomeAway, a deal that Reuters says could ramp up competition with unicorn Airbnb. Expedia says the deal will hurt profits next year but boost results down the road. It is the largest deal in Expedia’s history and the latest in a recent buying spree that also includes Orbitz Worldwide and Travelocity. Expedia’s deal lets it tap the massive alternative lodging market, which it estimated is valued at around $100 billion. Reuters
• Whole Foods still under pressure
Shares of Whole Foods slipped after the grocery store chain reported comparable sales slid 0.2% for the latest quarter – the first decline since 2009 and only the third quarter that metric has fallen at Whole Foods since 2000. The chain is under pressure from a handful of rivals that are selling more organic and healthy foods, pressuring sales and profits. Part of the problem? Sales at the company’s older stores are posting mediocre results. Fortune
• Kraft Heinz to close 7 plants
Kraft Heinz has announced it will lay off about 2,600 employees and close several factories, moves that come after the two food giants merged earlier this year in a deal brokered by Warren Buffett and private equity firm 3G Capital. This move shouldn’t exactly come as a surprise to observers of 3G. The cutthroat Brazilian firm is known for swift layoffs and cost cutting, but also strong profits. Fortune
• Media stocks take another dive
Media stocks, which were dented earlier this year after questions were raised about the resiliency of Walt Disney’s ESPN, were stung again on Wednesday as Time Warner lowered its profit guidance and 21st Century Fox missed Wall Street’s expectations for revenue. Time Warner’s comments led to more worries that cord-cutting – the trend of consumers ditching their cable packages in favor of streaming services like Netflix – is picking up pace. Wall Street Journal (subscription required)
Around the Water Cooler
• A particularly bad earnings season
With three-quarters of the S&P 500 already reporting results, profits for the third quarter are down 3.1%, on track to be the worst performance since 2009. The culprit? The energy sector, hurt by weak commodity prices, while the telecom services and consumer discretionary sectors have been strong performers. Earnings growth turned negative in the second quarter for the first time in six years. Bloomberg
• Facebook video is massive
Social-media giant Facebook says users watch eight billion videos a day, doubling the number it announced in April. The huge growth is thanks to a tiny product tweak that autoplays video and the company’s decision to prioritize videos in Facebook’s News Feed. But also keep this in mind: Facebook says any video that plays for three seconds or longer is a “view,” while YouTube requires a view to be at least 30 seconds. Fortune