FED ON JP MORGAN: YOUR BANK'S "WIND DOWN PLAN" IS SERIOUSLY FLAWED

FED ON JP MORGAN: YOUR BANK’S “WIND DOWN PLAN” IS ...

Mr V.K. sent this article along, and when you read it, I think you'll see why he did. But the problem is, where to "file' it, because its contents are so stunning. Here's the article:

The Fed Sends a Frightening Letter to JPMorgan and Corporate Media Yawns

The crux of the problem, I suggest, is outlined by the following paragraphs:

  1. All the "big banks" are overexposed to each other as a result of trading "bad derivatives" paper

A rational observer of Wall Street’s serial hubris might have expected some key segments of this letter to make it into the business press. A mere eight years ago the United States experienced a complete meltdown of its financial system, leading to the worst economic collapse since the Great Depression. President Obama and regulators have been assuring us over these intervening eight years that things are under control as a result of the Dodd-Frank financial reform legislation. But according to the letter the Fed and FDIC issued on April 12 to JPMorgan Chase, the country’s largest bank with over $2 trillion in assets and $51 trillion in notional amounts of derivatives, things are decidedly not under control.

At the top of page 11, the Federal regulators reveal that they have “identified a deficiency” in JPMorgan’s wind-down plan which if not properly addressed could “pose serious adverse effects to the financial stability of the United States.” Why didn’t JPMorgan’s Board of Directors or its legions of lawyers catch this?

Then, a little farther down the page:

How could one bank, even one as big and global as JPMorgan Chase, bring down the whole financial stability of the United States? Because, as the U.S. Treasury’s Office of Financial Research (OFR) has explained in detail and plotted in pictures (see below), five big banks in the U.S. have high contagion risk to each other. Which bank poses the highest contagion risk? JPMorgan Chase.

IN other words, folks, the big banks were busily pumping up each other's ledger sheets by trading the credit defaul swaps/derivative bundles (and bundles of bundles), one key component of which were mortgages (many of them fraudulent), and when the housing bubble burst...well, you know the story.

But now comes a second point in the article, and it's a stunner"

2. JP Morgan's exposure extends to "foreign jurisdictions" which, in order to "resolve" and :solve" their own exposure, could seize Morgan's liquidity:

Apparently, the Federal regulators believe JPMorgan Chase has a problem with the “location,” “size and positioning” of its liquidity under its current plan. The April 12 letter to JPMorgan Chase addressed that issue as follows:

“JPMC does not have an appropriate model and process for estimating and maintaining sufficient liquidity at, or readily available to, material entities in resolution…JPMC’s liquidity profile is vulnerable to adverse actions by third parties.”

The regulators expressed the further view that JPMorgan was placing too much “reliance on funds in foreign entities that may be subject to defensive ring-fencing during a time of financial stress.” The use of the term “ring-fencing” suggests that the regulators fear that foreign jurisdictions might lay claim to the liquidity to protect their own financial counterparty interests or investors. (All emphases added)

Now, all this lovely rhetoric about "third parties" and "foreign jurisdictions" means, effectively, that a kind of banking "mafia wars" looms, with the spectre of a run on banks not by the public, but by other banks, as they seize liquidity to doctor their own derivatives exposure. And if the banks don't do it, "foreign jurisdictions", i.e., those "old fashioned obsolete nation-states" that Mr. Global hates so much, will. And hey, let's give Mr. Rockefeller a pat on the back for his bold vision of a world run by banks and corporations: they're doing a great job, aren't they?

And then comes another whopper doozie:

3. Dodd-Frank solved nothing: derivatives trades (yes, the very same trade that stacking up a whopping 17 quadrillion dollars in paper assets bearing no connection to productive and economy reality) are still traded over the counter:

But the OCC has now released four separate reports for each quarter of 2015 showing just the opposite of what the President told the press and the public on March 7. In its most recent report the OCC, the regulator of national banks, states that “In the fourth quarter of 2015, 36.9 percent of the derivatives market was centrally cleared.”

Equally disturbing, the most dangerous area of derivatives, the credit derivatives that blew up AIG and necessitated a $185 billion taxpayer bailout, remain predominately over the counter. According to the latest OCC report, only 16.8 percent of credit derivatives are being centrally cleared. At JPMorgan Chase, more than 80 percent of its credit derivatives are still over-the-counter.

Three of the five largest U.S. banks (JPMorgan Chase, Bank of America and Wells Fargo) have now had their wind-down plans rejected by the Federal agency insuring bank deposits (FDIC) and the Federal agency (Federal Reserve) that secretly sluiced $13 trillion in rollover loans to the insolvent or teetering banks in the last epic crisis that continues to cripple the country’s economic growth prospects.

I submit that amid all this by now to-be-expected news of bankster corruption, that it is the second of these three disturbing points that lies at the center of the problem, and is yet another indicator that perhaps the sharks are beginning to circle each other. "Foreign jurisdicions" might be willing to step in an vacuum up what little is left in the cob-web-filled vaults of JP Morgan Chase.

Ok, so where's the high octane speculation in all this?

Well, recall my News and Views from the Nefarium from last week, where I advanced the idea that the Panama Papers story, the secret meetings at the Fed with Mr. Obama, Mr. Biden, and Ms. Yellen, the subsequent meetings of the world's major banksters in Washington, and the looming Deutsche Bank crisis, were all connected.

But then I also took issue with the major theories being offered for the Panama Papers, of which there are principally two: (1) The "West" did it, in all its variants - CIA, PEntagon, etc., and (2) The Russians did it. I  have taken the view that this is someone else entirely, and that the Panama Papers affair was really about sending messages to all the west's financial elite; they are, so to speak, the "pink slip" that they are about to be "downsized." A third player, in other words, stepped on to the scene, and in so far as the Western media has been concentrating on the Panama Papers, it has done so not because this was part of the "original plan" of its leakers, but rather because they represented a genuine message and challenge, and for those willing to connect dots, presented precisely that "third player" hypothesis. The powers that be could not afford to have anyone entertaining that third  player hypothesis, and hence, decided to kill two birds with one stone, and spin the event as a crisis of opportunity to demonize Mr. Putin once again, thus directing attention away from that "third player" hypothesis.

But now, the FED has obliquely confirmed what I have suspected since 9/11: that a third player has been on the stage, for in its letter to JP Morgan, note that it states "JPMC's liquidity profile is vulnerable to avderse actions by third parties," in the same document that talks about "foreign jurisdictions." To be sure, the two phrases might be referring to the same things, but then again, just as possibily, they might be referring to entirely different things.

The bottom line: did the FED just inadvertently confirm the presence of that "third player"?

See you on the flip side....

32 thoughts on “ FED ON JP MORGAN: YOUR BANK’S “WIND DOWN PLAN” IS ...”

  1. Sorry I just don’t see this phatom third party, I just see a bunch of psychopathic banksters and (psychopathic by definition) corporations bleeding the world dry for un and profit. They are reckless because they are thrill-seeking alpha-psychos and each one wants to to top the other in Competitive Parasitism — one of the NWO Summer Olympics’ most popular sports competitions, alond with the Trilateralathon and the 500 meter Bohemian Crawl.

  2. Maybe the third party is “time”.

    They all seem to be in a great fluster about getting all their boxes ticked fast. The question is why? What is looming ahead that they want so desperately to complete all their agendas?

  3. The article brings up an interesting scenario: During the Cold War, the biggest threat to human survival was some nation perceiving itself to be in an against-the-wall situation and letting-go with a first strike. Today, I believe we are in the same situation with banks:

    An economic ‘first strike’.

    With today’s Ph.D. math-analysts, algorithms, and computer power, it should not be too hard to ‘war game’ just-when you are going to fail. Or, when some other bank has the economic power to bankrupt one’s own bank with some maneuver. Especially, when it is simple ‘trend analysis’ and not a ‘black swan’ event.

    Given this, there is the temptation to ‘move first’ to capitalize (pun) on any perceived advantage. For example, the first bank to dump derivatives en-masse will probably get the best price for them. Late-sellers will find them nearly worthless. So, there will be a danger of some bank in-trouble (say, Deutsche Bank) to let-loose with a financial ‘first strike’. Tricky…

    There has always been valid reasons for ‘firewalls’, whether computer, biological, or financial. (Imagine yourself without a hard-skin ‘firewall’.) The financial industry’s dismantling of firewalls – in the name of greed – has led to an immense possibility of unstoppable ‘contagion’ at computer-like speeds. If some bank does a ‘first strike’ with no firewalls in-place, I expect the whole system to crash within minutes…

    In engineering, we build-in calculated ‘weak’ parts, to fail before the whole structure goes. A physical firewall. There is a part in each jet-engine pylon that is sized to fail if an engine physically seizes-up, allowing the engine to twist-off of the pylon rather than ripping-off the wing.

    I see no equivalent firewall ‘part’ in the financial structure…

  4. No Such Agency in alliance with Naval Intelligence. They monitor everything and have been playing the markets with insider info and are now firing warning shots across the bow of the old order. They have the goods on all of them and in the intelligence wars they have now broken away from their originators and former masters.

  5. I’d like to hear what Catherine Austin Fitts thinks about all this.
    If Mr. Global isn’t happy, then it looks like the third player is the party pooper.
    Add in The Fed, and lots of money laundering and whamo…financial war!!

  6. They are eating they’re own.
    First the 1% loaned to the 99%. Then when the 99% were all borrowed up they started going after the bottom 1%; and are presently working up the food chain, until they reach the chosen – the sacred cows.
    They will do Bail-Ins[already inked-into-law by the traitorous bankster collaborators]. At the same time, the burning desire flamed by the Panama Papers…

    1. …will stoke the desire to get those Big Cats & Corps not paying their fair share in taxes. The solution is to go cashless, to expose and subject the tax shore havens to Bail-Ins[except the sacred cows]. All will become debt slaves with no physical means to except their digital debt handcuffs….

    2. The hard assets will become subject to confiscation to become consumed inside the ravenous derivatives black hole of the sacred cows. Even the gold bugs will be raided, as they have been in the past.
      Welcome to the 21st Century NWO Banktatorship…

    3. Behind the Banktatorship are the real players in the shadows. The are putting up a bogey boogeyman to take the public heat; while they cool off in the shadow and watch the fires of[fill-in the blank] burn through societies as they drink their champagne, eat caviar and laugh like [blank] at – from their perspective – the heavens burn.

  7. Argentine president says Obama to visit Bariloche

    3-3-16

    BUENOS AIRES, Argentina (AP) – Argentina’s president says that U.S. President Barack Obama will spend several days in a popular part of Patagonia during his trip to the South American country this month.

    President Mauricio Macri made the comments to reporters Thursday in Bariloche, a visit televised by several local stations.

    The town in southern Argentina is known for its lakes and snow-covered mountains.

    Macri said Obama would “spend a few days” in Bariloche, but didn’t provide more details. A spokeswoman at the U.S. Embassy in Argentina declined comment. A spokeswoman in Argentina’s Foreign Ministry said she couldn’t immediately comment.

    Obama’s visit to Argentina is planned for March 23-24. It was not immediately clear if the trip to Bariloche would be a vacation or if the official visit would be extended a few days.

    http://www.cbs8.com/story/3137

    1. All … yes the visit to Bariloche was a key event and it happened just a few days before the Argentine president was prominently implicated in the Panama Papers. I wrote a blog about the strange decision of the Obamas to spend only 7 hours there, ostensibly “hiking in a remote national park” followed by a quick lake cruise.

      But even more strange was that the Argentine president, Mr. Macri, was being whisked around the same area by a Soros minion and slimeball of his own accord, Joe Lewis. The Argentine press corps complained that they had no access to their president for two days. Macri was spending time at Lewis’s estate during this period and was being shuttled back and forth to Obama up in Bariloche.

      Please take a look at my blog. I welcome comments and discussions because there are more questions than answers in my post:

      http://www.roguemoney.net/stories/2016/4/7/seven-odd-hours-in-bariloche

      1. Its a beautiful area and several presidents seem to think so. Hmmm Carter, Eisenhower, Clinton and a few others that I don’t recall come to mind have visited the place.

      2. debra,
        thank you. sloppy joe (your commenter) has some pertinent wild speculations. his timeline might be off. what think you of sloppy joe’s comments? and everyone else here as well. any thought on sloppy’s joe’s scenario?
        thank you
        zdb

      3. The article and comments were interesting. Thank you.

        sloopyjoe: “After multi-decades of planning and FOUR YEARS to build at a cost of USD$300 million, The New Temple of Solomon was inaugurated on July 31, 2014 in Sao Paolo, Brazil, to house a [Ark of the Covenant] “Replica”. If you think someone went to all this trouble and costs to house a “Replica”, I have a piece of the Brooklyn Bridge to sell you. Is it not a curious thing that a rather significant Jewish Temple is built in a predominantly Catholic country?”

        Also:
        Thorny: “Well, you don’t fly more than half way around the world for 7 hours of recreation. … A friend of mine suggested it was merely a trip so that certain parties could ‘show off their toy’ to certain other parties. Hmmm.”

        Bankster Slayer: “Yes, Thorny, I tend to agree with that theory … that the parties involved had to come down to the Rio Negro province rather than sit in Buenos Aires because whatever ‘it’ is down there in Bariloche can only be viewed down there. And if that theory is true, then there’s probably something going on that involves the Invap nuclear research & engineering company.”

        1. Maybe the replica of the Arc of the Covenant holds the embalmed Fuhrer, like Lenin in Red Square?

          I wouldn’t be surprised, and wouldn’t put it past them.

          1. basta, I lean more to an old Joseph youtube, where he was talking about ‘spoils of war’ being sorted-out by Ninurta. Some were destroyed, some were repurposed, and some were impossible to destroy so were hidden.

            Personally, I think that the Ark of the Covenant was originally a ‘container’ for a third-category item from above. This would tie-in with the Ethiopian priest-guardians guarding the item in Axum having cataracts develop, and also their dying at an early age. Something Ancient, which is not understood…

            Also, this would account for the ‘raid’ (nobody would raid for an old, half-rotted wooden box) and the enormous cost of the Sao Paolo Temple. Remember, this is a hebrew (hyksos) temple, and who their founding god was…

        2. The New Temple of Solomon isn’t a Jewish temple. It was built for and by the Unitarians. The Jewish community in Brazil don’t recognize it as a proper recreation and have mixed feelings about it according to articles I read on it.

          1. Unitarians must be different ‘down South’. “The New Temple of Solomon” is a highly-hebrew name, not a ‘religiously neutral’ name. Plus, I know of no Unitarians in the States that would blow such a staggering amount on a building. I might suggest a ‘stealth agenda’…

          2. Wikipedia:
            “The [New] Temple of Solomon is a replica of the Temple of Solomon built by the Universal Church of the Kingdom of God in São Paulo.”

            “Edir Macedo Bezerra is a Brazilian evangelical leader and media mogul… Macedo was raised Catholic, but by 1970 converted to a Pentecostal. He founded with others the Pentecostal Universal Church of the Kingdom of God in Rio de Janeiro state, Brazil in 1977.”

            “Followers are asked to make a financial sacrifice in addition to tithing, the pastor explains that the donations must be proportionate to the benefit sought from God. Twice a year, UCKG pastors take prayer requests to the holy land, each with a monetary donation ‘comparable to the worth of their wish (a new car, to be saved from a sorrowful situation, and to find work)’, according to rates set, ostensibly based on the Bible. The leaders of the church take the envelopes to Israel, where they claim to pray for their followers, but report on their return that they have no firm results; new ‘blessed’ envelopes are handed out requesting more donations.”

            “In 2007 [Edir] Macedo was also criticized by the acquisitions of his church which include, twenty-three TV stations, forty radio stations, two major daily newspapers, a real state agency, a health insurance company, and an airline. The church’s acquisitions seems very suspicious due to the church’s short history of about thirty years.”

            “…Brazilian rabbi Nilton Bonder, who stated ‘on the one hand, there’s the favorable way in which Jewish culture and history are treated in the structure, [but] on the other, there’s the bizarre aspect of the project’s dimensions and aggressive marketing.'”

          3. wow. so he’s the james baker of brazil?

            “Macedo, who is also the founder and leader of the Universal Church of the Kingdom of God, a Pentecostal denomination specializing in prosperity theology, initiated the idea to build the 10,000-seat church by sparing no expense.”

            not sure i wanna see where his tammy faye lives.

            these prophecy fulfilling preachers and politicians will have their day and their way one way or another. ironic that not every single human on the planet sees how plainly it’s a play book and not a prophecy book. aka, it’s a cookbook and not a mission statement

            to serve humanity.

  8. Something is cooking. Belgian citizens are being warned very serious budget cuts are on the way by the governement. All big firms are given total govern rights and most appalling rules suddenly aply at work at a unrolling speed even I can’t keep up to the almost daily rolled out new rules.

    The changes are coming so fast that even the deepest sleeping crowd are aware that something is up and terribly wrong and even communicating amongst themselves about it!!
    My two cents, Europe is on the verge of total collapse and the powers to be don’t know how to soften the blow let alone avert it.

    Pretend time and shoving the cost to the allready downtrodden seems non viable this time around.

    1. Goldman Sachs, but with a new name. There can be only one. Get ready for the collapse and merger of all the banks into one world centralized mega bank. The future will be unlimited digital currency and power for the one. The messiah is about to take his throne overseeing the world. Bad times ahead for the goyim.

  9. The House Of Cards is falling will JP Morgan, Wells Fargo, Bank Of American join Bear Sterns Lehman Brothers in the liquidation bogie of this century. Their creative accounting cooking the books is catching up to them their financial fantasies are crashing and sinking against the rocks of economic reality goodbye yellow brick road it’s off to see the wonderful Wizard Of Oz oh he’s a conman my mistake.

  10. The 3rd-Player has obviously Made-Off(yuk-yuk) with the money. I would put money on the fact this shadowy entity is part and parcel of the Break-Away contingent. Where we are in an open / galactic financial / resource / technology / commerce system. And this new player happened to get their hands on the superior tech and is now well positioned to level threats and pull strings to downsize the 2.0 PTB. The question is what will PTB 3.0 look like? Or will you be able to see it at all?

    Note all the increased seismic and volcanic activity of late. A marker for me will be if the BRICSA block get propotionally walloped > the AngloSphere. I will take that as a sign that the NE Navy has Teslarian Earth Change capabilities in their arsenal. At this time it appears Japan is cracking in two.

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