4 ms·

Is there? JP Morgan Chase repeated stated throughout 2022 that Fed would lower interest rates; that they'd be foolish not to. And, they haven't. So, if SVB (and

Is there? JP Morgan Chase repeated stated throughout 2022 that Fed would lower interest rates; that they'd be foolish not to. And, they haven't. So, if SVB (and anyone else) took JP Morgan's cavalier assertions as fact when deciding how and where to invest, that would prove catastrophic. Interestingly, majority of the articles highlighting JP Morgan's position are no longer available on the first few pages of DuckDuckGo and Google search engines... Sept 2022: https://markets.businessinsider.com/news/stocks/stock-market-outlook-fed-save-markets-rate-cuts-deep-recession-2022-9 https://markets.businessinsider.com/news/stocks/stock-market... Jan 2023: https://www.barchart.com/story/news/13401774/two-of-the-largest-banks-in-the-world-expect-the-fed-to-cut-interest-rates-in-2023 https://www.barchart.com/story/news/13401774/two-of-the-larg... Here's a June 2021 report stating that JP Morgan would stand to lose the most of all banking institutions under severe recession (roughly 84 billion US dollars), according to Federal Reserve Dodd-Frank Act Stress Test: https://www.risk.net/risk-quantum/7848481/fed-stress-test-jp-morgan-would-bear-brunt-of-losses https://www.risk.net/risk-quantum/7848481/fed-stress-test-jp... "JP Morgan’s loan portfolio would be hit the hardest under a severe recession, according to the results of this year’s Federal Reserve Dodd-Frank Act Stress Test. Bank of America, Wells Fargo and Citi would be the next worst hit. JPM’s losses as projected under the DFAST’s severely adverse scenario, which saw real US GDP drop as much as 4% below end-2020 levels and unemployment peak at 10.75%, would amount to $84 billion, representing 17.7% of total losses across the 23 banks subject to the test..." May be worth rethinking one's opinion about the position of "more trustworthy" + "JP Morgan Chase."

unmole 4y ago
JPMC is the only Tier-4 Global Systemically Important Bank in the world: https://en.wikipedia.org/wiki/List_of_systemically_important_banks https://en.wikipedia.org/wiki/List_of_systemically_important... The reason it would be hit the hardest is because it's literally the biggest among entities deemed Too Big To Fail.
- yourapostasy 4y ago
  Makes one wonder what it takes to be designated Tier 5. On percentage of global GDP basis, surprisingly to laypeople JPMC hardly makes a dent measuring by AUM, but I’d like to see the total transaction value run through them tallied as a percentage of global GDP.
  - credit_guy 4y ago
    Here’s a back of the envelope: the global GDP is about 100 Trillion USD [1]. The annual volume of Fedwire transactions is about 1 Quadrillion USD [2]. The Fed does not disclose volumes by bank, but let’s make the assumption they are roughly proportional with the AUM of the bank. JPMorgan has a 25% market share when calculated by AUM [3]. So a rough approximation would be that the volume of Fedwire transactions where JPMorgan is one of the counterparties is more than twice the global GDP. [1] https://en.m.wikipedia.org/wiki/Gross_world_product https://en.m.wikipedia.org/wiki/Gross_world_product [2] https://www.frbservices.org/resources/financial-services/wires/volume-value-stats/annual-stats.html https://www.frbservices.org/resources/financial-services/wir... [3] https://www.statista.com/statistics/727548/market-share-top-banks-thrifts-usa-by-assets/ https://www.statista.com/statistics/727548/market-share-top-...
- brutusurp 4y ago
  Doesn't make them trustworthy. It makes them a liability.
senttoschool 4y ago
To be honest, I think it's fine to deposit your money into any big bank. They're already deemed too big to fail and will get bailed out. The only question is whether you should invest your money into their stocks, which are riskier.

unmole 4y ago

JPMC is the only Tier-4 Global Systemically Important Bank in the world: https://en.wikipedia.org/wiki/List_of_systemically_important_banks https://en.wikipedia.org/wiki/List_of_systemically_important... The reason it would be hit the hardest is because it's literally the biggest among entities deemed Too Big To Fail.

yourapostasy 4y ago
Makes one wonder what it takes to be designated Tier 5. On percentage of global GDP basis, surprisingly to laypeople JPMC hardly makes a dent measuring by AUM, but I’d like to see the total transaction value run through them tallied as a percentage of global GDP.
- credit_guy 4y ago
  Here’s a back of the envelope: the global GDP is about 100 Trillion USD [1]. The annual volume of Fedwire transactions is about 1 Quadrillion USD [2]. The Fed does not disclose volumes by bank, but let’s make the assumption they are roughly proportional with the AUM of the bank. JPMorgan has a 25% market share when calculated by AUM [3]. So a rough approximation would be that the volume of Fedwire transactions where JPMorgan is one of the counterparties is more than twice the global GDP. [1] https://en.m.wikipedia.org/wiki/Gross_world_product https://en.m.wikipedia.org/wiki/Gross_world_product [2] https://www.frbservices.org/resources/financial-services/wires/volume-value-stats/annual-stats.html https://www.frbservices.org/resources/financial-services/wir... [3] https://www.statista.com/statistics/727548/market-share-top-banks-thrifts-usa-by-assets/ https://www.statista.com/statistics/727548/market-share-top-...
brutusurp 4y ago
Doesn't make them trustworthy. It makes them a liability.

senttoschool 4y ago

To be honest, I think it's fine to deposit your money into any big bank. They're already deemed too big to fail and will get bailed out. The only question is whether you should invest your money into their stocks, which are riskier.