By Pam Martens and Russ Martens: March 15, 2023 ~
The “Related Articles” linked below (a tiny sampling of relevant articles) will remind our readers just how long and in how many different ways we have been attempting to warn that the U.S. banking system was incompetently structured and at risk of systemic contagion. We have also repeatedly warned that the crony, captured Fed was the worst possible banking supervisor and should be stripped of its bank regulatory powers and restricted to setting monetary policy. We have repeatedly cautioned, citing experts in the field, that the Fed’s stress tests were little more than a placebo and would not prevent the next banking crisis. (Check out our numerous articles at this link. Scroll down.)
On July 29 of last year we wrote that Wall Street Megabanks’ Multi-Billion Dollar Blunders Suggest Money Controls as Good as George Bailey’s Uncle Billy and summed up our analysis with: “This is the stuff of banana republics – not a financial system befitting a superpower.”
On a regular basis, we emailed these articles to key staff of the Senators and House Reps who sit on the Senate Banking and House Financial Services Committees.
Late Monday, the credit rating agency, Moody’s, downgraded the entire U.S. banking system outlook to negative from stable. (Let that sink in for a moment – a downgrade of the entire U.S. banking system.) The news of the Moody’s downgrade did not hit the wires until yesterday, which should have cratered the most vulnerable bank stocks. Instead, there was a highly suspicious short squeeze that fueled a big rally in the prices of publicly-traded banks.
That unwarranted optimism has now been reversed this morning with Dow futures down more than 600 points just after 8:00 a.m. in New York; major banks in Europe temporarily halted from trading after steep selloffs; and troubled Swiss behemoth bank, Credit Suisse, down 24 percent to a new all time low of $1.74 in morning trade in Europe following multiple trading halts. For the systemic contagion posed by Credit Suisse, see our February 10 article: Credit Suisse Tanks Yesterday to $3.02; It’s Lost Over 90 Percent of Its Market Value Since 2007; It’s Not Alone.
We say in our headline above that this is Banking Crisis 3.0 because this is the third time (excluding the emergency measures taken in 2020 as a result of the COVID pandemic) that the Federal Reserve has deployed emergency measures to bail out the U.S. banking system in the past 15 years. (Prior to the repeal of the Glass-Steagall Act in 1999, which prevented the combination of Wall Street trading houses with federally-insured banks, there had been no major Fed bailouts for 66 years.)
The banking crisis of 2008 was widely covered by the media, which even went to court to get the Fed to come clean on the dollar amounts and names of the banks that received trillions of dollars in secret, cumulative loans from the Fed. (See our report last year: Mainstream Media Has Morphed from Battling the Fed in Court in 2008 to Groveling at its Feet Today.)
But because Congress failed to restore the Glass-Steagall Act after the 2008 financial crash – the worst since the Great Depression – the Fed was back to secretly bailing out the trading units of the behemoth depository banks in September 2019. Mainstream media – across the board – censored this critical story. See our report: There’s a News Blackout on the Fed’s Naming of the Banks that Got Its Emergency Repo Loans; Some Journalists Appear to Be Under Gag Orders.
That censorship allowed Congress to kick the can down the road, leading to this even greater Banking Crisis 3.0 today.
Secretary Yellen, We’ve Got a “Staggering” Problem: New Report Shows Foreign Banks Have Secret Derivative Debt that Is “10 Times their Capital”
Evidence Grows that Crypto and Federally-Insured Banks Are a Combustible Mixture
Casino Banking: Wall Street Mega Banks Traded More in their Federally-Insured Bank than the Total for their Bank Holding Company
Shhh! Don’t Tell the Fed or Mainstream Media that Systemic Contagion at Wall Street Banks Is Already Here
Another Dangerous Virus Hits the U.S. – Wall Street Bank Contagion
Wall Street Banks Tank Yesterday as Contagion Threat Grows
Contagion – What the Next Wall Street Crisis Will Look Like
Add 4,281 Hedge Fund Clients to What Makes JPMorgan Chase the Riskiest Mega Bank in the U.S.
New Study: Wall Street Banks Are Doubling Down on Risk by Selling Credit Default Swaps on their Risky Derivatives Counterparties
Internal Charts Show Treasury Agency Assigned to Measure Risk in U.S. Markets Slept through the Repo Crisis of 2019 and the Fed’s $19.87 Trillion Bailout
The Fed Has Misled the Public about the “Strength” of the Wall Street Mega Banks: This Chart Shows the True Picture
An Insider Blows the Whistle on How the Fed Has Allowed Crypto to Invade Federally-Insured Banks