Pam and Russ Martens — U.S. Quietly Drops Bombshell: Wall Street Banks Have $2 Trillion European Exposure

Wall Street On Parade
U.S. Quietly Drops Bombshell: Wall Street Banks Have $2 Trillion European Exposure

Pam Martens and Russ Martens

Pam Martens and Russ Martens — The Fed Sends a Frightening Letter to JPMorgan and Corporate Media Yawns

Yesterday the Federal Reserve released a 19-page letter that it and the FDIC had issued to Jamie Dimon, the Chairman and CEO of JPMorgan Chase, on April 12 as a result of its failure to present a credible plan for winding itself down if the bank failed. The letter carried frightening passages and large blocks of redacted material in critical areas, instilling in any careful reader a sense of panic about the U.S. financial system.…

At the top of page 11, the Federal regulators reveal that they have “identified a deficiency” in JPMorgan’s wind-down plan which if not properly addressed could “pose serious adverse effects to the financial stability of the United States.”…

It’s important to parse the phrasing of that sentence. The Federal regulators didn’t say JPMorgan could pose a threat to its shareholders or Wall Street or the markets. It said the potential threat was to “the financial stability of the United States.”…

How could one bank, even one as big and global as JPMorgan Chase, bring down the whole financial stability of the United States? Because, as the U.S. Treasury’s Office of Financial Research (OFR) has explained in detail and plotted in pictures (see below), five big banks in the U.S. have high contagion risk to each other. Which bank poses the highest contagion risk? JPMorgan Chase.…

The Federal Reserve and FDIC are clearly fingering their worry beads over the issue of “liquidity” in the next Wall Street crisis. That obviously has something to do with the fact that the Fed has received scathing rebuke from the public for secretly funneling over $13 trillion in cumulative, below-market-rate loans, often at one-half percent or less, to the big U.S. and foreign banks during the 2007-2010 crisis. The two regulators released background documents yesterday as part of flunking the wind-down plans (living wills) of five major Wall Street banks. (In addition to JPMorgan Chase, plans were rejected at Wells Fargo, Bank of America, State Street and Bank of New York Mellon.)…

Wall Street On Parade
The Fed Sends a Frightening Letter to JPMorgan and Corporate Media Yawns
Pam Martens and Russ Martens

ht Don Quijones at Raging Bull-Shit

Katelyn Fossett — U.S. Banks Too Big to Fail, or Just Too Big?

“You’re not going to win this tinkering with the rules,” Neil Barofsky, former special inspector general of TARP....

“I think as long as [the too-big-to-fail mentality] exists, the administration of justice is severely undermined in this country,” said Brooksley Born, a former chairperson of the Commodity Futures Trading Commission (CFTC), a government regulator....

Dennis Kelleher, CEO of Better Markets, a financial reform advocacy group, says that any move to break up the banks would come in one of two guises: either as a prohibition on banks dealing with more than a certain amount of gross domestic product, or government regulators using all the authority already vested in Dodd-Frank....

IPS — Inter Press Service
U.S. Banks Too Big to Fail, or Just Too Big?
Katelyn Fossett