In the 2nd quarter of 2020, JPM shocked the market by posting record trading revenue. Yes, record, like never before had the bank ever posted that much revenue from trading in its entire operating history!
Way to go JP!!
But in the midst of a global pandemic and an economic shutdown of the likes the world had never seen, how is it even possible for any company, in any sector for that matter, to be breaking performance records? 2nd quarter 2020 was quite literally the worst GDP quarter in American history, and up to 95% of the country was under some form of a lockdown order. At the time, analysts were even going so far as to compare the unemployment rate to what was seen during not just the Great Recession, but the Great Depression itself!
How is that possible?!
Well, JPM isn’t just your average company. They enjoy a unique, and exclusive relationship with the FRBNY, where, in addition to the right to borrow exorbitant sums of money at bargain level interest rates that practically nobody else has access to, the mega-bank also gets to act as the second largest shareholder of its respective district bank, giving the bank direct influence over who sits on the board of its federal reserve branch, which in the case of JPM, is the FRBNY, the largest CB branch in America, representing 55% of all CB banking assets in the country. Read more
But here’s an even better question, one that most people are probably secretly wondering to themselves, but few usually care enough ask..
Is this even fair?
Technically those profits were the direct result of unprecedented central bank stimulus programs, so why should JPM’s shareholders be allowed to collect such massive government subsidized profit without being obligated to give any of this money back? $14 billion is a huge sum of money to be making while the rest of the world suffers. Shouldn’t there be some kind of cap, or limit put into place for situations just like this? It’s not they’re doing anything spectacular with these government subsidized profits anyways, evidenced in a recent report from Bloomberg which showed that starting in 2017, the 4 largest banks returned $1.26 to shareholders over a period of 3 years for every $1.00 that they earned in net income — either in the form of share buybacks or dividends.
The federal reserve act requires that excess profits earned through the collection of interest on loans are to be returned back to the federal government, so here’s an idea: why don’t we start forcing these monstrous ‘too-big-to-fail’ financial institutions to share some of these profits with everybody else?
If governments are going to be playing the role of AIG, shouldn’t they be paid for that..?
Lawsuits have even revealed that in addition to being granted the right to collect such mind-boggling government subsidized profits without having to give any of this money back, these massive corporations are working together behind closed doors under the guise of front organizations for the purpose of conspiring to block competition. Yes, they will even go so far as to band together to block companies from accessing key financial services — the very same financial services that are technically only available through them..
Meaning even if you do — somehow, someway — manage to get your foot in the door at this exclusive, secretive club, apparently it doesn’t even matter what you have to offer sometimes, because they may just wake up on the wrong side of the bed one day and just to block you anyways!!
But of course, if it ever comes to the point where one of these massive, gov subsidized multi-national banking organizations believes that it is more profitable to simply rip you off rather than do their jobs and take actual risk, have fun trying to sue them for the damages. Just ask $COOP investors how long they’ve been waiting on their settlement. Or better yet, the teams of high powered lawyers that allegedly meet in secret on an annualized basis to devise schemes so they can combat all of the pissed off companies and people that are constantly filing lawsuits against them!
Yes, they get together in secret — their lawyers — so you can rest assured that the chances of you being treated fairly are most likely slim to none, especially if you happen to be unfortunate enough to be one of their customers, because if that’s the case, then expect to be automatically stripped of the right to a fair trial, forced into mandatory arbitration, and assessed by FINRA — the self-regulator that they openly admit to owning and controlling.
You can’t make this stuff up!!
One could even go so far as to argue that it is these very relationships that are providing the foundation for the alarming gap between the rich and the poor in the United States. If a small handful of entrenched financial institutions can just simply, at the wave of a wand, subsidize their margins, and their losses, at what point do they cease to be simply ‘private corporations’, and more like extensions of government.