Jamie Dimon Sees 'Dumb Things.' The ETF Market Might Be a Good Example.
JPMorgan CEO Jamie Dimon warned Tuesday that he's seeing 'a couple of people doing some dumb things' describing reckless behavior among investors and lenders in the current market environment. Perhaps he’s been watching the ETF market.
The ETF boom
Firms launched a record 997 new ETFs in 2025, according to the Wall Street Journal, nearly double the 584 launched in 2024, and three times the five-year average. ETFs (exchange-traded funds) have historically been simple, low-cost products that track broad market indexes or sectors. The new wave is different. Many of the new products feature significant leverage (amplifying both gains and losses), heavy crypto exposure, or complex derivative structures that most retail investors (and probably many institutional investors!) would struggle to fully understand.
The prediction market ETFs
An extreme example: last week, three separate firms registered ETFs that aim give investors exposure to prediction markets for the 2028 elections. These funds will effectively let investors bet on which party wins the White House, Senate, and House of Representatives. Back the right party and you profit. Back the wrong one, and, as the companies disclosed to the SEC in their filings, the funds could 'suffer a catastrophic loss in value.' That means going to zero…
To be clear: a financial product being sold to retail investors that can go to zero based on an election outcome is a meaningful escalation in risk. It also illustrates exactly the kind of innovation that tends to emerge late in a market cycle, when investor appetite for risk has outrun common sense.
The bigger pattern
New, complex, hard-to-understand investment products proliferating at the end of a bull market is not a new story. Similar dynamics appeared before the dot-com crash (internet day trading), before 2008 (mortgage-backed securities), and before the 2022 crypto collapse (leveraged crypto ETFs, NFTs). None of that means the market is about to crash. But Dimon's 'dumb things' comment lands differently when we have products being registered that are literally designed to go to zero based on an election outcome.
Sources: Wall Street Journal, CNBC, SEC filings