Search Results for: trillion

By Pam Martens and Russ Martens: October 16, 2023 ~ On May 1, the Federal Deposit Insurance Corporation announced that First Republic Bank had failed and that it was being sold to JPMorgan Chase. At the time, JPMorgan Chase was already the largest and riskiest bank in the United States. The sweetheart deal the bank got from the FDIC to take over First Republic included the FDIC eating 80 percent of any losses on single-family residential mortgages for 7 years and 80 percent of any losses on commercial loans, including commercial real estate, for five years. The FDIC also provided JPMorgan Chase with a $50 billion, five-year fixed-rate loan at an undisclosed interest rate. According to the filing that JPMorgan Chase made with the Securities and Exchange Commission last Friday, the deal also gave JPMorgan Chase something that it desperately needed: deposits. According to the 8-K filing that JPMorgan Chase made with the … Continue reading →

By Pam Martens and Russ Martens: October 12, 2023 ~ On Monday, Michael Barr, the Vice Chair for Supervision at the Federal Reserve, addressed a contentious issue in a speech before the American Bankers Association’s annual convention in Nashville. The topic was why federal banking regulators have proposed higher capital levels for the largest U.S. banks, those with assets over $100 billion. As we reported on September 20, there has been aggressive pushback on the proposal from large banks, their lobbyists and their trade associations. (Community banks are not impacted by the proposal.) During his speech, Barr put a staggering dollar figure on the destruction to the U.S. economy that could materialize from another major financial crisis. Barr said this: “Research suggests the costs of a financial crisis are sizable. While estimates vary widely, the cumulative loss in economic activity is consistently estimated to lie above 20 percent of annual GDP—and in … Continue reading →

By Pam Martens and Russ Martens: October 5, 2023 ~ As evidenced by the speech that the FDIC Chair, Martin Gruenberg, delivered at a conference yesterday, the FDIC is very much aware that both the level of uninsured deposits and the concentration of those uninsured deposits among a handful of mega banks is a serious problem for the U.S. banking system. Gruenberg didn’t name names, but we will do that in this article. Gruenberg pointed out in his speech that year-end data for the three banks that failed this past spring indicated that anywhere from 90 percent to 70 percent of their deposits were uninsured. (During a banking panic, uninsured deposits are typically those that head for the exits at the fastest clip.) But those three failed banks (Silicon Valley Bank, Signature Bank and First Republic Bank) were minnows compared to the asset-size of the banking whales which now account for … Continue reading →

By Pam Martens and Russ Martens: July 25, 2023 ~ In June, Reuters reported that JPMorgan Chase was expanding the reach of its commercial bank into two additional foreign countries – Israel and Singapore – bringing its foreign commercial bank presence to a total of 28 countries. Those plans could potentially add billions of dollars more to its already problematic uninsured deposits. Why federal regulators are allowing JPMorgan Chase to continue to expand, despite it admitting to five criminal felony counts since 2014 and currently facing three lawsuits in federal court for facilitating Jeffrey Epstein’s sex trafficking of underage girls is drawing attention from watchdogs. According to its regulatory filings, as of December 31, 2022, JPMorgan Chase Bank N.A. held $2.015 trillion in deposits in domestic offices, of which $1.058 trillion were uninsured. It also held another $418.9 billion in deposits in foreign offices, which were also not insured by the … Continue reading →

By Pam Martens and Russ Martens: July 3, 2023 ~ According to S&P Dow Jones Indices, component companies of the Standard & Poor’s 500 spent $922.7 billion in 2022 buying back their own stock. That was $41 billion more than the S&P 500 companies spent in 2021, which came in at a lofty $881.7 billion. One of the companies leading the stock buyback parade is Apple. Of the $922.7 billion spent on stock buybacks in 2022 by all companies in the S&P 500, Apple represented 10 percent of that spending with $90.2 billion in buybacks of its own stock. On Friday, June 30, 2023, Apple, the iPhone manufacturer, closed the trading day in New York with a market value (market capitalization) of just over $3 trillion, an historic record. Apple’s $3 trillion market value is eight times that of the second largest mobile phone manufacturer, Samsung. We decided to dig into … Continue reading →

By Pam Martens and Russ Martens: May 15, 2023 ~ If you have been following the banking crisis, you have likely read at least a dozen times that on March 12 federal banking regulators, with the consent of the U.S. Treasury Secretary Janet Yellen, invoked the “systemic risk exception” in order to protect both insured and uninsured depositors at the two banks that failed in March – Silicon Valley Bank and Signature Bank. That’s why there were gasps of shock on Saturday evening at around 5:30 p.m. when the Wall Street Journal (paywall) published the stunning news that depositors in the Cayman Islands’ branch of Silicon Valley Bank had their deposits seized by the Federal Deposit Insurance Corporation (FDIC), which they are unlikely to ever see again. As Wall Street On Parade has previously reported, under statute, the FDIC cannot insure deposits held on foreign soil by U.S. banks. What it … Continue reading →

By Pam Martens and Russ Martens: May 11, 2023 ~ If the dark secrets about the U.S. banking system that federal regulators have been keeping since the financial crash of 2008 are allowed to be aired in public Congressional hearings as a result of the current banking crisis – and mainstream media will grow a backbone and cover those hearings – it could help the U.S. avoid a catastrophic financial reckoning down the road. For years, Wall Street On Parade has been reporting that just four banks in the U.S. control more than 85 percent of all the opaque derivatives in the banking system. We have also regularly reported how federal agencies have singled out these four banks for posing systemic risk to the financial stability of the United States. We’re talking about JPMorgan Chase, Bank of America, Wells Fargo and Citigroup’s Citibank. On March 30, we crunched the numbers from … Continue reading →

By Pam Martens and Russ Martens: April 27, 2023 ~ Ever since 11 banks on March 16 donned the garb of heroic fire fighters, rushing to extinguish an inferno at a competitor bank before it spread further, we have been asking ourselves the question – why just this group of 11 banks. We’re talking about the action on March 16 when 11 banks chipped in a total of $30 billion and bizarrely placed those funds as uninsured deposits into First Republic Bank – which was in full scale unraveling mode because of bond losses and – wait for it – too many uninsured deposits. Four banks contributed two-thirds of the total deposits with JPMorgan Chase, Bank of America, Citigroup and Wells Fargo ponying up $5 billion each. Morgan Stanley and Goldman Sachs deposited $2.5 billion each; while BNY Mellon, State Street, PNC Bank, Truist and U.S. Bank each deposited $1 billion, … Continue reading →

Editor’s Update: The FDIC has confirmed that none of the $622.607 billion in deposits in foreign offices/branches of Citibank are FDIC insured. See the stunning information in the ninth paragraph below. By Pam Martens and Russ Martens: March 30, 2023 ~ On Tuesday, Martin Gruenberg, the Chair of the Federal Deposit Insurance Corporation (FDIC), the federal agency that serves as both a bank regulator and the overseer of the federal insurance program for U.S. bank deposits, testified before the Senate Banking Committee. The dangers of U.S. banks holding large amounts of uninsured deposits came up repeatedly in his testimony. For example, Gruenberg’s written testimony included these details about the ongoing banking crisis: “…on Friday, March 10, a number of institutions with large amounts of uninsured deposits reported that depositors had begun to withdraw their funds.” And this: “The FDIC estimates that the cost to the DIF [Deposit Insurance Fund] of resolving … Continue reading →

By Pam Martens and Russ Martens: March 21, 2023 ~ Jamie Dimon is the Chairman and CEO of JPMorgan Chase, the largest bank in the U.S., which is also ranked the riskiest global bank by its regulators. But instead of getting his own house in order in the midst of a banking crisis, Dimon has been peculiarly focused elsewhere. Over the past five days, Jamie Dimon’s legions of publicists have been burning up the phone lines with reporters, pushing the narrative that Jamie Dimon is some kind of financial wizard who needs to have a seat at the table to save the regional bank, First Republic Bank. (Scroll down here to see the exhaustive public relations effort that has gone into this narrative.) Last Thursday, news hit the wire services that Dimon had lined up 11 banks willing to place $30 billion in uninsured deposits into First Republic Bank. JPMorgan Chase, … Continue reading →