Engorged JPMorgan Zombie Says It Still Won’t Lend Any Money
May 1, 2023, 2022 (EIRNS)—As JPMorgan Chase continues to gobble up regional banks like Silicon Valley Bank and First Republic Bank, its CEO Jamie Dimon admitted that their longstanding policy of refusing to lend money will continue. According to Zero Hedge, in “JPM CEO Says ‘System Is Very, Very Sound,’ After Second Largest U.S. Bank Failure in History,” Jamie Dimon told investors during a call on Monday, May 1, that, “we are clearly going to see some reduction in bank lending.” Zero Hedge’s analysis of Dimon’s statement implied that JPMorgan will be doing “God’s work” for the Federal Reserve “by contracting credit without the need for rate-hikes.”
In that call, Dimon also told investors, “We need large, successful banks in the largest economy.” Perhaps indicating their strategy to consolidate control over the U.S. banking system to become “large” and “successful,” Dimon told investors that JPMorgan will continue to “support community banks” and that “banks will consolidate.” In a pithy analysis of JPMorgan’s intentions, Zero Hedge said that of course these moves will continue, “once the banks are pushed into FDIC hands and assets scooped up by JPM with govt bankstops....” Zero Hedge translates that to mean: “We [JPMorgan] will wait for the bank run (thanks Fed for the hike to 5.25%) to cripple them all, then buy them all for cents on the dollar with the FDIC keeping the toxic crap.”
People with deposits in the regional banks are now beginning to see a pattern after the failures of Silicon Valley Bank and First Republic, where the larger “too big to fail” banks are now being seen as safe havens, regardless of whether they refuse to lend. Reuters had a May 1 article that noted the shares in regional lenders fell in morning trading after the collapse of First Republic Bank. The KBW Regional Banking Index was down nearly 1%. Among individual movers, Citizens Financial Group, PNC Financial Services Group, Trust Financial Corp., and U.S. Bancorp fell between 2.2% and 7%.
The United States now faces the end result of the Fed’s disastrous monetarist policy of the recent years—with previous decades bad too. Low interest rates fueled the addiction to high returns on speculation by the “too big to fail” banks engorged by bailout cash and disinterested in lending to the real economy, while the regional banks that previously saw new openings for lending to the real economy at decent rates are now being smashed by the rapid pace of interest hikes by the Fed. Meanwhile, for the City of London and their lackeys like Dimon, they have long been disinterested in lending to the real economy and real people. It appears Dimon prefers to cannibalize the remains of the real economy, including the regional banks, in order to become a large bank that doesn’t lend in the largest economy—a success when you’re the only one left standing ... at least for now. Perhaps this was behind his reasoning when Dimon told investors today, “the system is very, very sound.”