The Top Six Big Banks
Two banks down. How many more to follow? And which banks?
Well, we can assume it will not likely be JP Morgan Chase.
They have seemed to position themselves into very fortuitous circumstances. Perhaps too conveniently:
Prominent venture capitalists advised their tech startups to withdraw money from Silicon Valley Bank, while mega institutions such as JP Morgan Chase & Co sought to convince some SVB customers to move their funds Thursday by touting the safety of their assets.– Bloomberg & The Information
Let us get this straight: the largest US commercial bank was actively soliciting the clients of one of its biggest competitors, and the 16th largest US bank, knowing full well deposit flight would almost certainly lead to the collapse of a bank which courtesy of fractional reserve banking, had only modest cash to satisfy deposit demands: certainly not enough to meet $42 billion in deposit outflows.
Of course, Jamie, who has suddenly emerged as a key figure in the Jeff Epstein scandal alongside Jes Staley, knows this, and would be delighted with an outcome that kills two birds with one stone: take his name off the front pages and also make JPMorgan even bigger. Actually three birds: remember it was JPM that started that “Not QE” Fed liquidity injection in Sept 2019 when the bank “suddenly” found itself reserve constrained. We doubt that JPM would mind greatly if Powell ended his rate hikes and eased/launched QE as a result of a bank crisis, a bank crisis that Jamie helped precipitate.
And while we wait to see if Dimon’s participation in the Epstein scandal will now fade from media coverage, and whether Powell will launch QE, we know one thing for sure: JPM was a clear and immediate benefactor of SIVB’s collapse because in a day when everything crashed, JPM stock was one of the handful that were up.– Zerohedge
I would not be surprised at all if some of the Big Five were involved in this in some capacity. If not directly, then at least cheerleading it indirectly.
The smaller, regional banks are taking major hits, while the larger ones—the ones the Feds previously determined are “too big to fail”—are capturing most of those fleeing deposits.
Those Big Five have been fighting to secure a higher percentage of total assets for decades now. Just look at the progression over time:
They were diving upwards for quite a while, especially preceding recorded data by the Fed. Now, they’ve largely plateaued. Perfect timing for another credit crisis or bank run crisis to help them shore up further percentages.
Centralization, at its finest.
The “Big Five” is also somewhat misleading. It should more accurately be the “Big Six”. Review the largest banks by asset size:
Chase and Bank of America are centralization megaliths. But they aren’t alone. And frankly, Morgan Stanley should be included.
U.S. Bancorp is half the size of Morgan Stanley. But Stanley is not included in the Big Five. Even though it eclipses the old trillion standard.
But returning to the main point, these six institutions have much to gain if the smaller regional institutions start seeing fleeing deposits. In fact, #18 was SBV that recently crashed.
All the institutions outside of the Big 6 are at major risk of unrealized losses on securities. Something that the Big 6 largely hedged against, coincidentally:
All six of these main players have safeguards against what just happened to Signature and SVB. All six also benefit (at least) fourfold if this collapse trend continues. This is because it will force the following:
- End interest rate hikes
- Growth in size through captured deposits and purchasing assets for pennies on the dollar of failed regional banks
- Guaranteed unlimited lines of credit from the Federal Reserve for their own liquidity issues.
- Eyes off of their current corruption investigations.
Yet, no one seems to be picking this story up. There are a lot of dots here that remain to be connected, but the overall picture is already forming.
Very odd coincidence, is all that I am saying.
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