Courtesy of Pam Martens
Jamie Dimon Sits in Front of Trading Monitor in his Office (Source: 60 Minutes Interview, November 10, 2019)
The New York Fed is back to subsidizing billions of dollars in profits at Wall Street’s trading houses, just as it did during the financial crisis.
Yesterday, JPMorgan Chase reported that its profits for the quarter ending December 31, 2019 hit an all-time record. (The bank has been around for more than a century, so that’s saying something.) The quarterly profits were $8.52 billion – for the same three-month period in which the New York Fed has been flooding unnamed Wall Street trading houses with hundreds of billions of dollars each week in super cheap loans.
The so-called “repo loans” by the New York Fed are being made at a fraction of where the free market would price loans to these Wall Street trading houses. On September 17, 2019, the first day the Fed began this open money spigot to Wall Street, the market wanted to price these loans at 10 percent. The New York Fed intervened with a flood of cheap money to bring the rate down and has been making the loans at less than 2 percent since then.
Yesterday, the New York Fed pumped out $82 billion to unnamed trading houses on Wall Street at interest rates of between 1.55 and 1.57 percent.
The January 2012 issue of Bloomberg Markets magazine reported the whopping profits reaped by Wall Street’s trading houses as a result of the below-market-rate loans the Fed made to them during the financial crisis, writing as follows:
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