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US Banks As Broken As Ever: JPM Excess Deposits Rise To New Record; Loans At Pre-Lehman Levels

Tyler Durden's picture





 

The final item of note from today's JPM release is perhaps also the most important one, and once again serves as evidence of all that is broken with the US financial system. To wit: deposits held by JPM rose modestly to a new all time high of $1,202,950 million, or $1.2 trillion. This compares to $970 billion in Q3 2008 at the time Lehman failed. What about the flip side of this key bank liability: loans. As of June 30, 2013, total JPM loans declined from $729 billion to $726 billion, the lowest since September 2012. But more disturbing, this number is $35 billion less than the $761 billion at September 2008. It means that JPM's excess deposits have now risen to a new all time high of $477 billion, up from $474 billion last quarter.

Why is this a problem? Two reasons.

First, as most recall, the way the JPM London Whale office was funded, was by using excess deposits over loans to provide the dry powder and collateral which which Bruno Iksil's office tried to corner the IG9 and high yield markets.

That failed, costing the firm $3.4 billion in Q2 2012 revenue (and oddly enough the CIO generated negative $648 million in revenue this quarter: the biggest loss since the London Whale quarter - what else did JPM blow up this time?). But the bigger issue is: what is JPM investing all this excess cash in? Is it plain vanilla safe treasuries? If so, where on the firm's books is this nearly $500 billion "investment" accounted for, and where is the loss associated with holding so much duration on the bank's balance sheet over the past two months?

Second, and just as important, while JPM continues to attract deposits, most of which are merely a matched book entry to account for cash created by the Fed's excess reserves, where is the loan growth? After all the banks are complaining they can't be like normal banks. Perhaps instead of perpetuating a broken banking model, in which deposit funding is used not to grow credit money and be reinvested into the economy as loans, but goes automatically into risk assets, JPM can once again start doing what banks have done for hundreds of years: LEND.

Because while deposits have increased by $233 billion since Lehman, loans have dropped by $36 billion since September 2008! And that's why there is no wholesale (soaring) inflation: the cash deposits are locked into boosting the S&P, instead of growing the economy and broader credit money aggregates.

We understand that JPM generates better returns for its shareholders by simply gambling in the market and using deposits to buy stocks, but at some point this strategy will fail and lead to huge losses. Is Jamie Dimon, who today told CNBC "you'll be surprised at how risk averse we are" simply betting that due to his TBTF status, that he will be bailed out once the market finally does crash, dragging down over a trillion in deposits with it?

Or is that simply when the bank "bail in" regime will finally arrive in the US?

 


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Fri, 07/12/2013 - 15:21 | Link to Comment fonzannoon
fonzannoon's picture

Crude about to bust through $110 and interest rates trending up.

This is fascinating

Fri, 07/12/2013 - 15:23 | Link to Comment Spider
Spider's picture

Lets break the banks together!

A grass roots movement called The Silver Pledge is an effort to beat the banks at their own game by having investors join up and buy physical silver - together we can break this market!

You can read more here:
http://www.communitysynergy.com/subscribe/silver_pledge_site.html

If you dont like it dont sign up - but for people who are sick of sitting and doing nothing at least lets work together to BREAK this silver market and thus break the banks stranglehold on fiat

Fri, 07/12/2013 - 15:28 | Link to Comment thecoloredsky
thecoloredsky's picture

I'll give you one thing, you are really fucking persistant.

Fri, 07/12/2013 - 15:50 | Link to Comment Divided States ...
Divided States of America's picture

3:30 ramp TEN minutes behind schedule....but better late than never!

Fri, 07/12/2013 - 16:47 | Link to Comment NotApplicable
NotApplicable's picture

Silly Tyler, one does not lend in a ZIRP-world. One uses "reserves" to support their partners in crime.

Sat, 07/13/2013 - 09:38 | Link to Comment resurger
resurger's picture

lol

Fri, 07/12/2013 - 16:29 | Link to Comment Spider
Spider's picture

Hey we all work for something - I want to work for a new currency system

Fri, 07/12/2013 - 17:33 | Link to Comment thecoloredsky
thecoloredsky's picture

So how many have signed up? Don't get me wrong, I like the concept, but the sign up form scares the shit out of me.

Sat, 07/13/2013 - 09:23 | Link to Comment pavman
pavman's picture

http://www.communitysynergy.com/subscribe/ ...

Hint: turn off directory indexing.  Lots O' Interesting sites there.

Fri, 07/12/2013 - 15:28 | Link to Comment kaiserhoff
kaiserhoff's picture

You don't understand JPM's business plan, Tyler.

It's like Vegas.  When you lose, you just double your bet, and role the dice again.  Sooner or later you'll win.

What could go wrong?

Fri, 07/12/2013 - 15:35 | Link to Comment GVB
Fri, 07/12/2013 - 15:50 | Link to Comment Stuart
Stuart's picture

more like, scared is as scared does. 

Fri, 07/12/2013 - 15:57 | Link to Comment CaptainSpaulding
CaptainSpaulding's picture

What can go wrong. Just call customer service. They will handle it

Fri, 07/12/2013 - 15:47 | Link to Comment Non Passaran
Non Passaran's picture

I made buying silver a habit, so I won't pledge but I support the idea. I bought some this week and in 3 weeks I'll do it again.

Fri, 07/12/2013 - 16:30 | Link to Comment Spider
Spider's picture

Thats the concept - you dont need to sign on the list.  But this is a way to join together and by being together we can encourage each other.

Plus I give away free silver (out of pocket) every month - so it doesnt hurt

Fri, 07/12/2013 - 15:26 | Link to Comment NOTW777
NOTW777's picture

remember, your pres told you this is a sign of a strong economy :)

Fri, 07/12/2013 - 16:47 | Link to Comment NotApplicable
NotApplicable's picture

How so? I don't have a pres.

Fri, 07/12/2013 - 15:27 | Link to Comment Its Only Rock N Roll
Its Only Rock N Roll's picture

Fonz, you still think the Fed has control of things?

BB is pissed he can't get rates to go down...no matter what he utters. 

But Jamie D. doesn't care about raising rates....JPM will just be fine.

Fri, 07/12/2013 - 15:41 | Link to Comment fonzannoon
fonzannoon's picture

I am agnostic on interest rates right now so I still think he has some control. If they push through 2.7% again I will be surprised. That being said I see them trending higher, but between mortgage related issues and crude oil, I think we are heading towards a terrible gdp print and moar QE.

Nothing makes sense.

It looks like china's gdp is going to be shit sandwich, but everyone knows that already and crude is still heading north. No one really knows why.

 

 

Fri, 07/12/2013 - 15:46 | Link to Comment kaiserhoff
kaiserhoff's picture

Crude is heading north..., because we have a few trillion of momo money sloshing around?

It could easily be that simple, and that stupid.  Squeezing a balloon.

Fri, 07/12/2013 - 15:55 | Link to Comment Its Only Rock N Roll
Its Only Rock N Roll's picture

All of Benji's huffing and puffing got the 10yr to 2.60%.  In today's highly leveraged world that is unacceptable.  They will push through 2.7% on their way to 3% soon. 

He lost control of the one market he wants to control the most.   

He will try to do something that will end up making it worse.

Things don't make sense when markets are manipulated like this.  Prices lie.  People are getting caught offsides.

 

 

Fri, 07/12/2013 - 15:57 | Link to Comment fonzannoon
fonzannoon's picture

I want to agree with that pretty badly. It makes a lot of sense.

Fri, 07/12/2013 - 16:07 | Link to Comment Its Only Rock N Roll
Its Only Rock N Roll's picture

Toothpaste is out of the fucking tube...your words not mine

Believe it because it is true

Fri, 07/12/2013 - 16:11 | Link to Comment fonzannoon
fonzannoon's picture

I do think it is out of the tube. Fucking stawks have laughed in my face since I said it. I feel like I am half right and yet still half an asshole.

Fri, 07/12/2013 - 16:36 | Link to Comment Tinky
Tinky's picture

No, you're just not trying to time things perfectly like the true assholes.

Fri, 07/12/2013 - 16:04 | Link to Comment kaiserhoff
kaiserhoff's picture

Good point.

Ben's been so lucky for so long, we tend to forget that, at the margin, no one wants reward free risk.

Eventually, you run out of stupid.

Fri, 07/12/2013 - 16:50 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

@fonzanon:  ... "nothing makes sense".

Agreed.  But what should one do when nothing appears to make sense?  Stick to time-proven basics.  Which ones?  Well, how about...

1.  "When things appear not to make sense, we are either lacking key information, or are using an inadequate or wrong  model." - my view

2.  "When fraud is rampant, possession is 10/10s of the law" is what LoP would say, I believe.

3.  When you cannot proceed on a robust model, reliable info or on trust, use 1 & 2 above, plus "diversify in asset classes & geography" - my view

"All else seems like Quantum Economics at this point", to coin a phrase.  Test the Uncertainty Principle at own peril.

Fri, 07/12/2013 - 15:46 | Link to Comment ekm
ekm's picture

the gov can controls the paper market but at the cost of double killing the economy and dollar avoidance by the world

 

USD world currency status is at stake.

Something will be happening extremely soon, by executive order, not because of the market

Fri, 07/12/2013 - 15:51 | Link to Comment fonzannoon
fonzannoon's picture

ekm you think we are going to get a crash and you think interest rates have to go up right?

If we gate a major crash, you don't think treasuries won't be massively bid, sending yields....i don't know...sub 1%?

The only way you get a crash and yields rise is if the U.S dollar crashes and if it does that is the end of the end. That is massive inflation and you don't get cheaper housing or a breather for the economy.

How do you reconcile a crash and rising yields at the same time?

Fri, 07/12/2013 - 15:56 | Link to Comment ekm
ekm's picture

USTs are purchased at 1.5% margin and 98.5% leverage.

 

When the margin call is made (executive order), leverage will suck money into ..literally nothing, hence forced sale.

 

However, the money moving hands will bid short term USTs since there's nowhere to go, so it will be volatile

Fri, 07/12/2013 - 16:00 | Link to Comment ekm
ekm's picture

reposting copy/paste 

 

Seeing how 10yr yield collapsed from 2.52 to 2.60 in 2.5 hrs, the end is near, and all preplanned

 

1) The Fed has to buy bonds

2) Repo market needs the same bonds to be pledged as collateral

 

Hence,

either yield skyrockets thus imploding derivatives and triggering margin calls, since UST are bought at 1.5% margin and 98.5% leverage

 

or. repo market ceases to function due to shortage of collateral, hence collateral calls.

 

Current reality:

- margin calls

- collateral calls

- crude oil super inflation

- extremely expensive Dow, S&P (overpriced by 100%)

- extremely expensive housing (overpriced by 100%)

- high unemployment

- China imploding due to politburo infighting

 

It cannot get any worse than this, unless civil war in USA.

Collapse imminent, not because of market, but because of executive order, same as in 2008.

The collapse will fix the debt ceiling issue, easy peasy.

Fri, 07/12/2013 - 16:04 | Link to Comment fonzannoon
fonzannoon's picture

"The collapse will fix the debt ceiling issue, easy peasy"

define fix? How is 17 trillion in debt going to get fixed?

 

 

Fri, 07/12/2013 - 16:07 | Link to Comment Tinky
Tinky's picture

"Debt ceiling", not extinguish the debt itself

Fri, 07/12/2013 - 16:08 | Link to Comment ekm
ekm's picture

correct

Fri, 07/12/2013 - 16:13 | Link to Comment fonzannoon
fonzannoon's picture

This comes back to the same idea though. If some big banks go bust, are you going to bail them out again? Or let the depositors lose their ass. Because if you let depositors lose their ass, you get the mother of all bank runs and this morphs into something more.

Fri, 07/12/2013 - 16:20 | Link to Comment Tinky
Tinky's picture

No easy way out, for sure. That's what makes it possible to enjoy some schadenfreude before the event even occurs!

Fri, 07/12/2013 - 16:08 | Link to Comment ekm
ekm's picture

I meant that there won't be a fight over it, due to the collapse

they'll agree somehow to extend it let's say for 1 year

Fri, 07/12/2013 - 16:17 | Link to Comment Divided States ...
Divided States of America's picture

thats what they been doing the past few years...its just kicking the can a bit further down the road...been there done that...

Fri, 07/12/2013 - 16:57 | Link to Comment CaptainSpaulding
CaptainSpaulding's picture

Thanks for the warning. I wont be home that day. Robidoux suggested i head due west where the sun sets. Turn left at the Rocky mountains

Fri, 07/12/2013 - 16:08 | Link to Comment Yen Cross
Yen Cross's picture

   Hey fonz, ultimately in a collapse I think you get a huge spike in the $ and in bond prices initially. [Global safeheaven flows]. If it's a massive sustained crash then bonds and the $ cave in, and commodities skyrocket. Over the last month yields continued to rise and the $ continued to strengthen. Lot's of times investors sell bonds  just to  hold cash, which increases cash demand and value.

Fri, 07/12/2013 - 16:09 | Link to Comment fonzannoon
fonzannoon's picture

That is the only way I see a global crash playing out Yen, unless we are talking about the big one. The big big one, and I don't know that we are there yet.

Fri, 07/12/2013 - 16:11 | Link to Comment ekm
ekm's picture

There's no such a thing like "the big one".

The big one would be another bretton woods after ww2.

 

It is going to simply be few primary dealers going dust

No biggie, it's catharsis, nothing to worry about.

It's good for the economy

Fri, 07/12/2013 - 16:15 | Link to Comment fonzannoon
fonzannoon's picture

See my point above. If a few pd's go bust, you gotta bail em out, all over again. If you don't, you risk a bank run. Even if you do, you risk a bank run.

and yes the big one is still out there, it's the day rates go the wrong way and everything the fed tries to do/say only exasperates it.

Fri, 07/12/2013 - 16:15 | Link to Comment ekm
ekm's picture

no bank run on the street, the gov can can force that

 

bank run will happen in the repo market, same as in 2008

Fri, 07/12/2013 - 16:17 | Link to Comment fonzannoon
fonzannoon's picture

So you are sying capital controls?

Cyprus?

That's no big deal, and good for the economy?

Fri, 07/12/2013 - 16:18 | Link to Comment ekm
ekm's picture

No, what I'm saying is that the printed money claiming commodites will disappear, hence crude oil and commodities will be available to the real economy for consumption

 

hence, economy restarts

Fri, 07/12/2013 - 16:21 | Link to Comment fonzannoon
fonzannoon's picture

I have to run. If there is one thing I know for sure, it's that we will continue this conversation.

Fri, 07/12/2013 - 17:16 | Link to Comment oddjob
oddjob's picture

hence, the marginal cost commodity producer is gone. Hence higher prices.

Fri, 07/12/2013 - 17:35 | Link to Comment ekm
ekm's picture

Costs are manipulated by false accounting.

Plus, price defines costs, not vice versa

Fri, 07/12/2013 - 15:55 | Link to Comment PiratePawpaw
PiratePawpaw's picture

I agree that reserve currency status is at stake,  but 2 questions/issues:

I dont believe a replacement is ready YET.

And I dont believe there is a thing the pres can do to stop it when it is.

Fri, 07/12/2013 - 15:57 | Link to Comment ekm
ekm's picture

no replacement, just currency swaps between countries

 

it is currently happening

Fri, 07/12/2013 - 15:56 | Link to Comment oddjob
oddjob's picture

The same people that own the Fed hatched the euro. World reserve currency status will be taken taken away at their behest.

Fri, 07/12/2013 - 15:58 | Link to Comment ekm
ekm's picture

there is a civil war between hyper elite, due to leverage.

 

some lost in 2008 preplanned collapse, some others are about to lose now

it's gonna be bloody

Fri, 07/12/2013 - 16:35 | Link to Comment Divided States ...
Divided States of America's picture

so you are saying most of us play the roles of humans in Aliens vs Predators? meaning there's a battle waging on between the elites that we were unfortunately dragged into and there is nothing we can do about it except stand and be devoured alive?

Then what do you suggest we do to prevent or minimize the pain from becoming 'collateral damage'?

Fri, 07/12/2013 - 17:15 | Link to Comment ekm
ekm's picture

unfortunately...nothing

Fri, 07/12/2013 - 18:53 | Link to Comment Panafrican Funk...
Panafrican Funktron Robot's picture

"Then what do you suggest we do to prevent or minimize the pain from becoming 'collateral damage'?"

Move to a farming town away from major metro areas, particularly in the mountain standard time zone.

Fri, 07/12/2013 - 18:58 | Link to Comment fonzannoon
fonzannoon's picture

This is where I am conflicted with ekm's message. He is saying that what is coming will be good for the economy. Yet we will all be collateral damage and there will be blood etc. There is nothing we can do...

If I get wiped out financially, and on the flip side, gas prices drop $150 a gallon and interest rates somehow go up, I don't chalk that up as a win.

Fri, 07/12/2013 - 19:07 | Link to Comment ekm
ekm's picture

Think of it like mafia.

When families cooperate and expand as long as the pie expands, they do well, people suffer

 

But, when the pie shrinks, families start fighting against each other, thus eliminating each other, thus good for people.

The blood will be among super elite since now the pie has shrunk and winners and loser will be declared. That is good for us since pie will be available for us

 

This is world history. There's nothing new under the sun

Fri, 07/12/2013 - 19:14 | Link to Comment fonzannoon
fonzannoon's picture

When families fighting over the smaller pie eliminate each other, don't the winning families just end up taking the rest of the pie?

Meaning, using your theory, we keep eliminating PD's and eventually end up with say....JPM as the only bank in town, owning everything....or said another way.....full soviet?

Fri, 07/12/2013 - 19:18 | Link to Comment ekm
ekm's picture

no, few of them will get to a truce, because the big guy on the table are not really banks, are the military industrial complex guys who had enough of them banks

Fri, 07/12/2013 - 19:20 | Link to Comment GoldenTool
GoldenTool's picture

Cyprus makes more sense...

Fri, 07/12/2013 - 15:21 | Link to Comment NOTW777
NOTW777's picture

you heard jamie - the economy is smokin hot, bank loans are flying off the shelf and, to reassure you of these facts we slash gdp estimates

Fri, 07/12/2013 - 15:24 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

"US & Western governments as broken as ever" is more like it...

Ed Snowden’s statement and request for Russian asylum

http://rt.com/news/snowden-meets-rights-activists-013/

Here is the text of his statement: http://homment.com/Snowden-statement

In recent days, a number of ZH bloggers have speculated on his whereabouts, because of the lack of pics that Americans are conditioned to having (almost on demand).  As I indicated, the simple reason is/was:  He went deep under cover and had professional help – for obvious reasons.  I hope that this puts the minds at ease for all these… ‘wannabe analysts’.   You can take some friendly ribbing, right?  Who’s your daddy?  ;-)

 

Fri, 07/12/2013 - 15:28 | Link to Comment Major Major Major
Major Major Major's picture

I got in touch with a strategic development guy at Wells Fargo at the beggining of the year to see if they were interested in acquiring a $3B asset bank.  He said they couldn't look at it right now because they have way to many deposits.  He then asked if I had any loan portfolios for sale.  My bet is they are trying to buy up as many loans as they can (most likely acquiring a lot of shit) just to make their ratios moar normal.  We are not living in normal.

Fri, 07/12/2013 - 15:55 | Link to Comment Peter Pan
Peter Pan's picture

Excuse my ignorance but what is an asset bank? I suspect your post is an eye opener but I want to understand it fully. Thanks.

Fri, 07/12/2013 - 18:09 | Link to Comment Major Major Major
Major Major Major's picture

Excuse my short hand.  Just a bank with $3B in assets.  Regular commercial bank (deposits, loans, etc.) with around $3B in assets. Just mentioned that to give you a sense of the size of the company I was talking with them about.

Sat, 07/13/2013 - 03:30 | Link to Comment pparalegal
pparalegal's picture

Maybe because he knows every FDIC takeover has grossly overstated assets? Ask him if HE owns any silver. :}

Fri, 07/12/2013 - 15:28 | Link to Comment Peter Pan
Peter Pan's picture

Of course banks are broken. If consumers are broke and society is broken, what do we expect banks to achieve other than vacuuming any remaining wealth out of the system?

And that vacuuming is going on full pelt as banks acquire more and more controlling interests in various large enterprises. The enterprises themsleves, in a bid to grow and survive, have been squeezing out the self employed entrepreneur as evidenced a record low percentage of self employed people.

The banks will sooner or later vacuum so much of the wealth that consumers will have not only no means of borrowing more but will also fail to pay off their debt. When that happens we will see inter-geenrational debt in families spike. Gone will be the days when the family home could be paid off in 10 years. We will now see the grandchildren paying off the family home by which time it will be due for demolition and re-building.

Fri, 07/12/2013 - 17:23 | Link to Comment xtop23
xtop23's picture

Great post and mirrors my thoughts to a T.

That would be banks in 100% survival mode though. No way they'd able to perpetuate and increase debt in that type of environment.

Fri, 07/12/2013 - 15:29 | Link to Comment TomGa
TomGa's picture

"[...] Cheap money will not induce manufacturers and merchants to increase their borrowings in an unsatisfactory business situation, Dr.Anderson declared. He cited the figures for commercial loans as reported by member banks of the Federal Reserve System in support of this contention.

But if merchants and manufacturers will not use cheap money, he said, speculators will. They will use cheap money in buying stocks, for the prospect of capital appreciation. Security loans of the reporting member banks stood on April 2 at the highest point in history, with the exception of the stock slump period ended Nov. 13 last and the year-end week ended Dec.31. [...]"

-Dr. Benjamin Anderson, Quoted in the NYTimes, April 13, 1930

 

This time is different. Lol.

Fri, 07/12/2013 - 15:37 | Link to Comment NOTW777
NOTW777's picture

monthly wtic triangle BO; USO well above 37.17 - weeklies look nice

Fri, 07/12/2013 - 15:37 | Link to Comment yrbmegr
yrbmegr's picture

Why would a bank lend money?

Fri, 07/12/2013 - 15:53 | Link to Comment Peter Pan
Peter Pan's picture

Why would a bank lend money......to anyone than itself?

Fri, 07/12/2013 - 17:35 | Link to Comment OneTinSoldier66
OneTinSoldier66's picture

When money is being fed to me for free, from something/someone else.

Fri, 07/12/2013 - 15:51 | Link to Comment ChaosEquilibrium
ChaosEquilibrium's picture

same as it ever was(2007).....GS, MS, C, JPM, and large connected HF's slowly accumulating Crude futures and derivatives(control over REAL ASSETS):):)

 

it will be blamed on S/D, inventory, delivery chokes, pipeline chokes, planned refinery maintenance, un-planned refinery maint.

 

What it is NOT:  ECONOMIC GROWTH=GDP

 

the NG market is lit for a blow-out into double digits....guess who is sitting on all those 1.98 contracts?:):)

Fri, 07/12/2013 - 15:53 | Link to Comment Atomizer
Atomizer's picture

http://investor.shareholder.com/JPMorganChase/releasedetail.cfm?ReleaseID=390330

 

June 17, 2009

JPMorgan Chase Repays $25 Billion In TARP Funds In Full

New York, June 17, 2009 -- JPMorgan Chase & Co. (NYSE: JPM) announced today that it repaid in full the $25 billion preferred stock investment it accepted through the Troubled Asset Relief Program (TARP). In addition to this principal amount, JPMorgan Chase has paid the U. S. Treasury an aggregate of $795,138,889 in dividends on the preferred stock, including dividends that had accrued through the redemption date. The company will also notify the U.S. Treasury today of its intent to repurchase the 10-year warrant issued to the Treasury in connection with the preferred investment.

JPMorgan Chase is a leading global financial services firm with assets of $2.1 trillion and operations in more than 60 countries. The firm is a leader in investment banking, financial services for consumers, small business and commercial banking, financial transaction processing, asset management, and private equity. A component of the Dow Jones Industrial Average, JPMorgan Chase & Co. serves millions of consumers in the United States and many of the world's most prominent corporate, institutional and government clients under its J.P. Morgan, Chase, and WaMu brands. Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com.

 

Korn - Blind

Fri, 07/12/2013 - 15:53 | Link to Comment Element
Element's picture

no really, it's just escape-velocity finally being reached ...

Fri, 07/12/2013 - 16:21 | Link to Comment q99x2
q99x2's picture

"you'll be surprised at how risk averse we are"

This is a smart ass remark by Dimon because he was indicating to himself when he said it that he owns Eric Holder and is the main conduit for DHS funding. Somebody needs to call the police on him. 

Fri, 07/12/2013 - 16:36 | Link to Comment Goldbugger
Goldbugger's picture

Three major Western banks are under constant threat of failure overnight, every night, forcing extraordinary measures to avoid failure. They are Deutshe Bank in Germany, Barclays in London, and Citibank in New York. Judging from the ongoing defense from prosecution and cooperation (flipped) with Interpol and distraction of resources, the most likely bank to die next is Deutsche Bank. They are caught with accounting fraud and outright financial fraud over collateral shell games, pertaining to USTreasury Bonds, other sovereign bonds in Southern Europe, and OTC derivatives linked to FOREX currency contracts. D-Bank is a dead man walking.

 

http://news.goldseek.com/GoldenJackass/1373659200.php

Fri, 07/12/2013 - 19:53 | Link to Comment evernewecon
evernewecon's picture

New


 

http://www.bloomberg.com/news/2013-07-10/reits-deepening-bond-losses-as-leverage-forces-sales.html 


 

Avenue Of Growth Through

LBO's And Privatizations In

The Wake Of Monopolized Monetary

Policy And Fiscal Too As To

Banking?


 

And When A Famous Commentator


 

(Oh, I'm at Zerohedge: CNBC removed the

video, but it was the guy who had the

over the top episode while being

interviewed by Erin Burnett.  In view

of the removal, I have to say this is by way

of my best recollection, which may be

imprecise or totally inaccurate.)


 

Says An Alternate Path Beyond

Recapping Or Even The Resolution

Trust Cp., Which Was Still Socializing

The Cost, Not The Proft, Says

"Socialist," That's The Ultimate In

Disengenuous Childish Demon Word

Slinging.  There's Nothing More

Statist Than Socializing The Cost

And Applying Simpson-Bowles Policy

To Programs Ostensibly Broadly

Bootstrapping Or Providing Safety

Nets But Tapping Out When There's

Nothing Left To Give

Market Controllers.


 

Here's The Med Care Equivalent Of

The Transfers To The Bank, The Latter

Which I'll Leave Others To Enumerate.

However, What Actually Supposedly

Established European Primacy Over

The Post-Liberal Middle East Was The

Recognition Of A Monarch, Prussia's

Frederick II, That Even He'd Be Better

Off Allowing Dissent.   Not Allowing It

Today's Fragile, Not Anti-Fragile, Need

I Say?   Though I Only Use, In My Own

Doings,  Anti-Fragile

In A Guardedly Market Informed

Manner.   Processes Inform Would Be

Absolutes, And Most Causes Of Medical

Need Couldn't Give A Damn About

Incentives.   But Market Can Sure

Be Combined With Process Understood

To Make That Need Manageable While

Satisfying Patients, While Also Making

Doctors, Nurses And The Whole Health

Team, Unfettered-Efficient And Happy

Campers.


 

The Latest

On "Medicare Advantage."

http://www.pnhp.org/news/2013/may/Private-insurers-Medicare-Advantage-plans-cost-Medicare-an-extra-%2434.1-billion-in-2012 


 

Here's The Administration's Yet

Newer Act As To Medicare.

http://www.pnhp.org/news/2013/april/obama-administration-intervenes-to-give-715-billion-to-overpaid-for-profit-medicare- 


 

The Reason The Banks Are Flush

With Cash Is Those Transfers, The

QE'ing Of The Mortgage Securities,

The "Loss Sharing" (Your Share,) And

The Reason For Having Had Little To Do

With The Money To Date Is The

Liquidity Trap (From 0, Or Real Neg.

Rates, It Can Only Later Require Less

Principal For Comparable Return)

Created For Their Pleasure In

 

The First Place.

 

Simpson-Bowles Ad Infinitum Doesn’t

Work.   There’s Ultimately Nothing Left

For The Elite To Take.  


 

That’s The Whole Idea Of The ‘08 Crash.

Batra As To ‘29: Elites Ran Out Of People

To Make High Returns Off Of.   Fast Forward,

Risk Sold, Insured, Shorted.


 

Medicare At Its Outset Was National Health

Insurance For Unwanted Customers, Amtrak

Having Been Created When The RR’s Didn’t

Want To Compete With The Early Growth

 

Phases In Highways/Airlines.


Sat, 07/13/2013 - 03:21 | Link to Comment pparalegal
pparalegal's picture

What could be wrong? I see BB's "green shoots" and Obama's "Putting America to Work with your tax dollars" ditch digger signs up and down my local freeway.

Sat, 07/13/2013 - 06:22 | Link to Comment Catullus
Catullus's picture

What this tells me is that there's never been a better time to break up the banks and return depository banking to simple warehouse game they always have been and should be. You could end fractional reserve banking using on demand deposit accounts and then show everyone that their checking accounts are at least the one true safe haven. They don't even show up on the balance sheet of the banks.

Everything else would be fair game to lose everything.

This is not a sign that banks are broken. This is a sign that the consumer is deleveraging and continues to shun debt (outside of the student loan idiocy, which is quickly becoming the government's game anyway).

Alas, they're probably just stuffing liabilities off balance sheet anyway, so let's not get our hopes up.

Sat, 07/13/2013 - 09:36 | Link to Comment Albert_
Albert_'s picture

Just to get this straight

I thought that money created by the FED and "given" to big banks was used only to prop up their capitalization. This explanation was in accordance with the fact that inflation is low due to low lending. 

Does this mean that the FED-money would be kept as reserve cash/capital (i.e. aiming to lower the capital/loans ratio), OR that it would be invested?

The article asks "what is JPM investing all this excess cash in? Is it plain vanilla safe treasuries?".

In other words the article accepts that the FED-money would be invested (although it doubts the wisdom of the investment). So i conclude that the answer to my above question is that such money is to be invested.

In addition: the article asks "where is the loan growth?" But how can a bank BOTH invest in securities and assets and loan the same money? Aren't bying assets and loaning, opposite parts of the balance sheet? 

Sat, 07/13/2013 - 11:35 | Link to Comment Lmo Mutton
Lmo Mutton's picture

"Or is that simply when the bank "bail in" regime will finally arrive in the US?"

"risk averse" bitches!!

Sat, 07/13/2013 - 13:47 | Link to Comment evernewecon
evernewecon's picture

 

 

 


 

They haven’t lent because of the very

mechanics of their own bailout: the

liquidity trap (explained at ZH one or

2 days ago.)


 

Most simply, from 0 or real neg. r’s

affording free reserves, there’s ultimately

only one direction to go: up.


 

It takes less principal for comparable

return then.


 

Hence, this, long ago already.


 

http://www.bloomberg.com/news/2012-07-09/dealers-decline-bernanke-twist-bids.html 


 

People who SOLD their bubble got some/most/all equity out

of their homes.   The int inc on that vs. rent, all after taxes,

is a prime own vs. rent decision input.


 

That income was ripped off.


 

Even a resolution trust cp. type solution would STILL

have been a pvtz the profits/sclz the costs solution

where the thrift, it’s decided, will remain.


 

(Of course equity holders and depositors are

two different animals, but it’s the depositors

whose int inc has been blanked out, whose

balances get whacked by dollar debasing, and who’ve

had moments fearing getting Cyprus’d.)


 

It at least would have been faster doing a resolution

trust thingy (even just taking the cost/losses off the

equity holders’ hands) and thus would’ve avoided

now 5 years of TBTF monopolistic monetary policy.


 

The liquidity trap’s been so dominating that it’s really only

now that the Beveridge Curve matters.

It’s Job Openings Vs.

Unemployment Rate, A Measure

Of Market Efficiency And Sensitivity,

Which Can Reflect Uncertainty, But

The Basis For That Can Be Read Wrongly.

I Think It’s Reflecting  Not Uncertainty

Caused By People At The Receiving

End Of The Blame Game, But The

Expectation Rates Will Rise.

That The Liquidity Preference

Reflected Only Makes Sense In The

Presence Of Uncertainty Is

Confirmed By That Very Expectation,

In Turn Confirming John R. Hicks’

Commentary As To Uncertainty.


 

Naturally, Those Who're Falsely

Blamed Are Simply The Vulnerable.

The Elderly, Kids Seeking A Good

Education, People Suffering At

The Hands Of Corrupted Policy

Making And The Socialization Of

Just Cost, And, Whomever The

Scapegoating Of Whom Appeals

To The Needs Of Those Who

Need To Look For Fault, Though

Humans Suffering Frailties, Incl.,

The Control Freaks Themselves,

Find Friends From All Corners.


 

When Contemplating How Congress

Used To Blame The Yuan And Social

Security And Medicare For America's

Problems, Think Mainly  About The Policy Of

Hand It Over That's Been Aimed At

Everyone Who Sold The Bubble And

These.


 

http://www.bloomberg.com/news/2013-07-04/toronto-reviews-bid-to-become-yuan-currency-trading-hub.html 


 

http://www.bloomberg.com/news/2013-07-06/switzerland-will-join-race-to-be-trading-hub-for-china-s-yuan.html 

The Above Really Also Applies To The IS/LM Curves

Because The Trailing Of The Investment/Savings

Curve Simply Gets Reflected By The Entirety

Of Investors, Including The Ones Interested In

 

The Yuan In Toronto And Switzerland.


Sun, 07/14/2013 - 12:47 | Link to Comment dizzyfingers
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