Epstein and Madoff’s Banker , 5 Time Felon but Too Big To Jail -JP Morgan -Gets Bigger
Yup, the same guy (Jamie Dimon) who proposed to seize your land by eminent domain for Climate Change and One Health is at it again, and so continues the Herding of Americas Depositors into SIFI’s (Systemically Important Financial Institution) where their Deposits become subject to Bail-Ins under the Dodd Frank Act
JPMorgan Chase & Co. (JPM) will pay $10.6 billion to the Federal Deposit Insurance Corporation (FDIC) to buy First Republic Bank (FRC)—after the latter was seized—and it may be getting a quite a bit more than its money's worth.
https://www.investopedia.com/what-does-jpmorgan-get-in-first-republic-deal-7487296
JP Morgan is acquiring around $173 billion of loans and about $30 billion of securities of First Republic Bank along with roughly $92 billion of deposits. That includes the $30 billion deposited by large banks in March to stabilize the beleaguered San Francisco bank. Those deposits will be repaid post-close or eliminated in consolidation. The banking giant is not assuming the bank’s corporate debt or preferred stock.
As part of the agreement, the FDIC will provide loss share agreements to cover the single-family residential mortgage loans and commercial loans acquired under the transaction. In addition to $50 billion of five-year, fixed-rate term financing.
The banking regulator currently estimates that the cost to the Deposit Insurance Fund will be about $13 billion according to a statement. However, the final cost will be determined when the FDIC terminates the receivership.
Lol- they spend $10 billion for First Republic and get $203 billion in assets and $90 billion in deposits, are given a $50 billion loan (terms not disclosed) and get protection against losses on those assets. What a deal,
Clearly, there is quite a lot of consolidation going on in the Banking Industry (lost almost 20% of banks over the last decade) and as I said awhile back this is by design, as its necessary to facilitate the roll out of CBDC.
It also serves another purpose as I mentioned in my previous post on the Dodd Frank Act. Thus far, bank failures on non-Crypto non-SIFI banks has kept depositors whole and wiped out the shareholders. Thats is how it should be. Under Dodd Frank, should a SIFI be in danger of failure, there will be no Bail Out, instead there will be Bail Ins. To keep the SIFI balance sheet clean, any deficit in assets will be accompanied by a reduction in liabilities, among which include bank deposits, as we saw in Cyprus
But to save the SIFI’s, the banking industry must be consolidated to drive depositors to these TBTF banks. That means small and medium banks must merge with SIFI’s somehow.
This will make rolling out CBDC easier as only the SIFI’s will be able to make the transition quicker.
In any event, CBDC can’t happen smoothly if at all if the Derivative Bomb goes off too early and Fed also has another problem .
Despite the higher interest rates banks earn on their deposits, as part of a monopoly (shareholders in the Federal Reserve Bank), they don’t pass this on to depositors .
So why would the wealthy bother to keep their money in a bank earning 0.2-0.6% when they can buy safe treasuries at 4.5%. Unlike banks, the Treasury is backed by the Fed will never go bankrupt. Its safer than FDIC insurance.
So its seems to me the Fed will either need to roll back interest rates, or SIFI’s will need to offer much higher interest rates on deposits, perhaps limited to big uninsured accounts, to keep big depositors from fleeing to greener pastures
Furthermore, the Fed will need to increase liquidity
https://pete843.substack.com/p/was-svb-a-victim-of-a-conspiracy
2010 Dodd Frank Act, which eliminated taxpayer bailouts by requiring insolvent SIFIs to recapitalize themselves with the funds of their creditors. “Creditors” are defined to include depositors, but deposits under $250,000 are protected by FDIC insurance.
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 states in its preamble that it will “protect the American taxpayer by ending bailouts.” But it does this under Title II by imposing the losses of insolvent financial companies on their common and preferred stockholders, debtholders, and other unsecured creditors, through an “orderly resolution” plan known as a “bail-in.”
Depositors are classed as “creditors.” A general deposit is a loan made to a bank. This means that the bank is the general depositor’s debtor, but that the bank has legal title to the funds deposited; these funds may be commingled with the bank’s other funds. All the general depositor has is a general, unsecured claim against the bank …. The bank is free to use the deposit as it sees fit.
But what about FDIC?
FDIC fund is sufficient to cover only about 2% of the $9.6 trillion in U.S. insured deposits. A nationwide crisis triggering bank runs across the country, as happened in the early 1930s, would wipe out the fund.
Lets put this in perspective, a bank like JP Morgan holds 12% of all deposits. If the Derivative Bomb goes off, JP Morgan insured Deposits alone would collapse FDIC and its insured depositors would also most likely be given a hair cut (short of a trillion dollar bail out by taxpayers , and multiply that by 10-fold as all the SIFI’s follow suit)
https://pete843.substack.com/p/you-cant-build-back-better-cbdc-before
Lets go back to March 16 when Too Big to Jail - Jamie Dillon came to First Republics Rescue. Anyone smell a rat then? I sure did
I don’t know what terms these banks are setting with First Republic but they are probably getting some access and control over First Republic. I suspect the Fed might be subsidizing this somehow
https://pete843.substack.com/p/was-svb-a-victim-of-a-conspiracy
What they got was time to develop a takeover plan in which JP Morgan could buy valuable assets and deposits for 10 cents on the dollar and their accomplices could watch depositors flock to their bank when they induce a panic with First Republics takedown
Dimon’s so-called rescue plan, announced on March 16, made no sense from the beginning. It consisted of 11 banks chipping in a total of $30 billion to place into First Republic Bank as uninsured deposits for 120 days. Four banks contributed two-thirds of the total deposits with JPMorgan Chase, Bank of America, Citigroup and Wells Fargo sluicing $5 billion each. Morgan Stanley and Goldman Sachs deposited $2.5 billion each; while BNY Mellon, State Street, PNC Bank, Truist and U.S. Bank each deposited $1 billion.
JPMorgan Chase said in its statement that it will be repaying the 10 banks for the deposits they each contributed.
JPMorgan Chase is already ranked by its regulators as the riskiest bank in the U.S. (See Federal Data Show JPMorgan Chase Is, By Far, the Riskiest Bank in the U.S.) Making it bigger simply makes it more systemically riskier.
JPMorgan Chase’s purchase of Washington Mutual in 2008 – WaMu was the largest bank failure in U.S. history. JPMorgan Chase is now being allowed to purchase First Republic Bank, the second largest bank failure in U.S. history.
This flies in the face of President Biden’s Executive Order of July 9 2021, where he promised that his administration would “guard against excessive market power” and enforce antitrust laws. With regard to banks, the President wrote:
“To ensure Americans have choices among financial institutions and to guard against excessive market power, the Attorney General, in consultation with the Chairman of the Board of Governors of the Federal Reserve System, the Chairperson of the Board of Directors of the Federal Deposit Insurance Corporation, and the Comptroller of the Currency, is encouraged to review current practices and adopt a plan, not later than 180 days after the date of this order, for the revitalization of merger oversight under the Bank Merger Act and the Bank Holding Company Act of 1956 (Public Law 84-511, 70 Stat. 133, 12 U.S.C. 1841 et seq.) that is in accordance with the factors enumerated in 12 U.S.C. 1828(c) and 1842(c).”
See In 16 Years, the Fed Has Approved 4,506 Bank Mergers and Denied One.
The Bank Holding Company Act, a federal law, prohibits banks that control “more than 10 percent of the total amount of deposits of insured depository institutions in the United States” to purchase another bank.
According to its call report to federal regulators, as of December 31, 2022, JPMorgan Chase held $2.01 trillion in deposits in domestic offices and $426 billion in deposits in foreign offices, for a total of $2.4 trillion. According to the FDIC, as of December 31, 2022, there was a total of $17.7 trillion in domestic deposits in all U.S. banks and savings associations. That means that JPMorgan Chase held 11.36 percent of total U.S. domestic deposits, well in excess of the 10 percent cap, and should have been ineligible to buy yet another bank and become even more systemically dangerous.
But some smart Wall Street lawyer or lobbyist had the clever foresight to stick into the legislation that the market share cap could be waived if the acquisition involved one or more banks in default or in danger of default.
Under the tenure of Jamie Dimon as Chairman and CEO of JPMorgan Chase, the bank has racked up an unprecedented five felony counts and a rap sheet that is likely the envy of the Gambino crime family. And yet, mainstream media continues to hold Dimon up as the wise and prudent wizard of Wall Street.
FDIC will provide loss share agreements with respect to most acquired loans: Single family residential mortgages: 80% loss coverage for seven years; Commercial loans, including CRE: 80% loss coverage for five years.
JPM also disclosed that it would take a one-time gain of $2.6B post-tax at closing, not including expected restructuring costs of $2.0B over the course of 2023 and 2024; and perhaps more importantly the fair value marks on acquired loans is ~$22B, with an average loan mark of 87%, while the FDIC's loss sharing deal reduces risk weighting on covered loans, with an average risk weighting of ~25%.
As for the deal rationale, well... JPM didn't have to include this slide - after all the rationale was all about taxpayers getting stuck with FRC's toxic sludge while JPM getting all the good assets at pennies on the dollar - but it did anyway, so here you are: 20% IRR (Internal Rate of Return) .
First Republic’s shareholders and debt holders will be wiped out in this deal, a typical occurrence when a bank is put in government receivership
The F.D.I.C. estimated that its insurance fund, which is made up of the fees banks pay the agency for insuring deposits, would have to pay out about $13 billion to cover First Republic’s losses. JPMorgan also said that the F.D.I.C. would provide it with $50 billion in financing and that JPMorgan would pay $10.6 billion to the F.D.I.C.
https://www.nytimes.com/2023/05/01/business/first-republic-bank-jpmorgan.html
The funds required for the sale of First Republic will come out of the Deposit Insurance Fund, a pool of billions of dollars kept in case the government needs to cover insured depositors after a bank failure, the FDIC said.
The Deposit Insurance Fund receives funding from banks, which pay insurance premiums in order to receive protection from the U.S. government and offer that guarantee for customers. The agency also derives income from investments made with the insurance revenue.
In turn, the bailout of First Republic will not draw on individual taxpayers, since the funds do not come from taxes levied on everyday Americans.
https://abcnews.go.com/amp/Business/republic-bank-fails-bailout/story?id=98983413
The Taxpayers will be on the hook when the FDIC goes underwater
Remember, all of this is by design.
Every financial crisis begins when the Fed increases interest rates to curb inflation that exists due to market manipulations and collusion, and thus the interest rate increases do nothing to curb inflation on main street, but they do cause defaults as the money supply dries up. They know this. In the past, the Fed would reverse course before things popped too bad, and heed signs such as banks rushing to FHSB for loans instead of using the REPO market, and they would roll back interest rates. This time the Fed ignored those signs.
My guess is they reverse course soon, but is it too late?
Like in the 2008 Global Financial Crisis and the COVID Genocide, nobody will go to jail. Everyone in the Military Industrial Everything Complex , which is no doubt directed by BIS and Global SIFI’s that are Too Big To Jail and above the law
Global SIFI’s cant be criminally prosecuted according to John Titus (eg HSBC)
https://www.bitchute.com/hashtag/john-titus/
After the Global Financial Crisis (GFC) BIS set up Financial Stability Board (FSB) to monitor Global Financial Stability and systemic risk and they designated 25 banks as Globally Systemically
Important Financial Institutions (G’SIFI’s) which essentially made them protected and essentially free from prosecution
They set up offices is each location to monitor central banks of each country in which these SIFI’s operate in order to protect them
3 members of each country sit on FSB. In US they are the Fed Reserve Chairman, US Treasury Secretary and head of SEC. When one of these SIFI’s run afoul of the DOJ, they intervene to set them straight.
As a result the Too Big to Fail (TBTF) became To Big to Jail (TBTJ). Sure, you can fine them as this comes out of their shareholders pockets, and is written off as a business expense, but jailing the Jamie Dimons of the world can’t happen. According to John, they literally have a license to kill
Makes me wonder how many other Industries management under the Military Industrial Everything Complex enjoy TBTJ status, beyond designated patsies.
I don’t imagine Jamie Dimon is too worried about being questioned over Jeffrey Epstein soon. After all, he was Madoffs banker and partner too, and only one of them went to Jail