updated 5/12/2008 5:26:41 PM ET 2008-05-12T21:26:41

JPMorgan Chase & Co.'s chief executive said Monday that while the crisis in the credit markets appears to be three-quarters over, he believes a U.S. recession is just beginning.

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"Even if the capital markets crisis resolves, it does not mean that this country will not go into a bad recession," said CEO James Dimon, whose bank saw its first-quarter profit fall by half due to the recent collapse of the U.S. mortgage market. "The recession just started."

"We don't know if it's going to be mild or severe," he continued, speaking at a conference in New York hosted by Swiss bank UBS AG. "We're thinking there's a third of a chance that it's going to be pretty bad ... closer to the 1982 recession than the very mild recessions we had in 2001 and 1990."

Also incomplete is JPMorgan's acquisition of Bear Stearns Cos., the toppling investment bank that JPMorgan offered to buy in March.

"I want to make it perfectly clear: Mission not accomplished," Dimon said. He warned investors that while he still believes the deal was a good decision, "we are bearing an awful lot of risk" by taking on Bear Stearns' assets.

Bear Stearns is expected to post 2009 earnings of $800 million to $1.13 billion, Dimon said.

JPMorgan has so far found positions for 40 percent of the 14,000 Bear Stearns employees and job opportunities outside the company for an additional 1,500 people, Dimon said.

Bear Stearns shareholders are scheduled to vote on the proposed acquisition on May 29.

JPMorgan shares rose 67 cents to $47.24. Bear Stearns shares rose 15 cents to $10.38.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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