By Fareed Zakaria
While all eyes have been on the presidential and vice presidential debates, arguably the most important piece of political news from last week may have slipped through the headlines. Announcing a record $5.7 billion profit for the third quarter, JP Morgan Chief Executive Officer Jamie Dimon sounded unexpectedly upbeat about the U.S. housing market:
"Importantly, we believe the housing market has turned the corner," he said in a statement. "In our Mortgage Banking business, we were encouraged that credit trends continued to modestly improve."
True, this did come with a caveat – the bank also expects to "see high default-related expense for a while longer."
But the surprisingly positive pronouncement is worth taking notice of because it comes from a guy who does not speak loosely. In fact, Dimon was so bullish that he suggested the Fed would likely raise interest rates sometime in 2013, despite the bank having said it will keep them near zero for the next few years.
This suggests to me that Dimon is expecting an upside surprise. With news today that home building also jumped to a four-year high last month, there seem now to be some welcome bits of good news amongst all the sound and fury that is the presidential campaign.