Search Results for: JPMorgan

By Pam Martens and Russ Martens: April 19, 2023 When JPMorgan Chase, Bank of America, Citigroup and Wells Fargo announced on March 16 that they were plunking $5 billion each of their corporate funds as uninsured deposits into the sinking First Republic Bank, they tied their corporate brand and their own bank’s image of safety and soundness to that of a teetering lender. Here’s what happened in short order thereafter: First Republic Bank’s stock closed on Thursday, March 16, the date of the announcement of the big infusion of money during market hours, at $34.27. On Friday, March 17, First Republic’s stock closed at $23.03. On Monday, March 20, the stock closed at $12.18. What the mega banks had hoped would be a vote of confidence in First Republic Bank was viewed by the composite wisdom of the markets as an act of desperation and the market savaged the stock price … Continue reading →

By Pam Martens and Russ Martens: April 12, 2023 Four of the eleven big banks that announced on March 16 that they were going to dump a combined $30 billion of their own money as uninsured deposits into the plunging coffers of First Republic Bank were also the underwriters of $3.6 billion in preferred stock for First Republic Bank. Units of JPMorgan Chase, Bank of America, Morgan Stanley and Wells Fargo were underwriters of the majority of the preferred stock outstanding at First Republic Bank. UBS, which did not contribute to the $30 billion deposit infusion, was also one of the primary underwriters. UBS was otherwise occupied last month by having a gun put to its head by the Swiss government to “rescue” the tanking Credit Suisse. The Swiss government also denied shareholders on both sides of the deal the ability to vote on the matter. All of First Republic’s outstanding … Continue reading →

By Pam Martens and Russ Martens: April 11, 2023 To read the headlines in the major business press, one would think that since the upheaval began in the U.S. banking system, the largest U.S. commercial banks have been the beneficiaries in terms of deposit inflows. For example, on March 13 the Financial Times ran this headline: “Large US banks inundated with new depositors as smaller lenders face turmoil.” The subhead was even more questionable, reading: “Failure of Silicon Valley Bank prompts flight to likes of JPMorgan and Citi.” (JPMorgan Chase has been charged with five felony counts by the U.S. Department of Justice over the past nine years while Citigroup’s stock has been a basket case since the financial collapse in 2008. Citi did a 1-for-10 reverse stock split in 2011 to window dress its stock price.) See Citigroup stock price chart below. On March 25, CNBC ran a similar article … Continue reading →

By Pam Martens and Russ Martens: April 10, 2023 Jamie Dimon, the Chairman and CEO of JPMorgan Chase, has cranked up his public relations machine since March 16 to promote the narrative that he came to the “rescue” of the plunging regional lender, First Republic Bank. The so-called “rescue” consisted of 11 banks, including JPMorgan Chase, dumping a total of $30 billion in “uninsured” deposits into First Republic. But one of the bank’s key problems was that it already had too many uninsured deposits. (This was like seeing a house on fire and throwing 11 expensive martinis at it.) According to First Republic’s regulatory filings, as of December 31, 2022, it had total deposits of $176.25 billion, of which $119.47 billion (or 68 percent) were uninsured. The Federal Deposit Insurance Corporation (FDIC) caps federal deposit insurance at $250,000 per depositor, per bank. But banks such as First Republic, that cater … Continue reading →

By Pam Martens and Russ Martens: April 5, 2023 Millions of Americans are beginning to ask themselves this question: Is the Federal Reserve (the “Fed”) a competent central bank or a terminally compromised regulator that simply does the bidding of Wall Street’s mega banks to the peril of average Americans and the U.S. economy? Millions of other Americans have already made up their minds on this point. These persistent doubts about an institution with an $8.8 trillion balance sheet – that is backstopped by the U.S. taxpayer – is very bad for confidence in the U.S. banking system, especially when the Fed pivots from one banking bailout to the next. (What was the size of the Fed’s balance sheet prior to its serial bailouts? On December 26, 2007, the Fed’s balance sheet stood at $929 billion. It has soared by 847 percent in just over 15 years of serial bailouts.) Let’s … Continue reading →

By Pam Martens and Russ Martens: April 4, 2023 ~ The New York Times has been able to fly below the radar in terms of its insufferable ability to muck up the financial system of the United States and then canonize its aiders and abettors with puff pieces. It was none other than the New York Times that repeatedly used its editorial page to advocate for the repeal of the Glass-Steagall Act, which had protected the U.S. financial system from crisis for 66 years until its repeal under the Wall Street friendly Bill Clinton administration in 1999. It took only nine years after its repeal for the U.S. financial system to crash in 2008, requiring the largest public bailout in U.S. history. We’re now in banking crisis and bailout 3.0. The 1933 Glass-Steagall Act was passed by Congress at the height of the Wall Street collapse that began with the 1929 … 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 29, 2023 ~ Silvergate Capital, the parent of Silvergate Bank – which has lost 90 percent of its share price year-to-date and announced it is winding down and liquidating — is still running a website that is putting a rosy glow on the bank’s operations. For example, under the heading of “Banking for the future,” the Silvergate website shares this: “Silvergate Bank has served entrepreneurs in unique and niche industries for over 20 years. Recognizing digital currency’s potential during the sector’s infancy, we built strong relationships with pioneers who were turned away by traditional banks. This solidified our position as industry-leading partners and innovators which remains true today.” Wait. What? (What ever happened to the Federal Trade Commission’s Truth in Advertising Law?) Those so-called “strong relationships” with digital currency firms turned into highly-fickle hot money once markets learned that Silvergate had been doing highly … Continue reading →

By Pam Martens and Russ Martens: March 27, 2023 ~ On Sunday, Financial Times reporters Brooke Masters, Harriet Clarfelt and Kate Duguid published an article under the headline: “Money market funds swell by more than $286bn as investors pull deposits from banks.” This article needs some important clarifications. First is the fact that money market funds had to be bailed out by the government during both the 2008 financial crisis and the more recent financial panic of 2020 stemming from the COVID pandemic. On September 19, 2008 (four days after Lehman Brothers was placed into bankruptcy), stocks were crashing and investors were in a panic, the Department of the Treasury announced that it would provide a guarantee for money market mutual funds, standing behind more than $3.5 trillion in money market fund assets. In mid-March 2020, as the share prices of mega banks on Wall Street were plunging in price and … Continue reading →

By Pam Martens and Russ Martens: March 24, 2023 ~ The reassurances of Federal Reserve Chairman Jerome Powell and U.S. Treasury Secretary Janet Yellen that the U.S. banking system is sound, stand in sharp contrast to what is happening in markets. This week, the shorts have found another easy new global bank target to try to take down after making a bundle of money betting against Credit Suisse, which was taken over for 82 cents a share on Sunday by its Swiss competitor, UBS. This time the global banking target is Deutsche Bank, a global behemoth we have warned about ad nauseum here at Wall Street On Parade. Deutsche Bank was a $120 dollar stock prior to the financial crisis in 2008. It closed yesterday at $9.65 in New York and is down another 10 percent in early morning trading in Europe. The weakness in Deutsche Bank is spilling over into … Continue reading →