The Tide Is Going Out and JPMorgan, Deutsche Bank and AIG Appear to Be Swimming (Read Trading) Naked

March 29, 2020

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Closing Price of the S&P 500 Index on Friday, March 27, 2020, Versus Bank of America [BAC], Citigroup[C], Deutsche Bank [DB], Goldman Sachs [GS], JPMorgan Chase [JPM], Morgan Stanley [MS], AIG, and Ameriprise Financial [AMP]. (Source: BigCharts.com)

By Pam Martens and Russ Martens

Warren Buffet is credited with the quote: “Only when the tide goes out do you discover who’s been swimming naked.”

Friday’s closing prices among some of the heavily interconnected mega Wall Street banks and insurance companies known to be counterparties to Wall Street’s derivatives appeared to show who’s swimming naked in the realm of derivatives – naked meaning who has sold derivative protection (gone short the risk) on something that is blowing up.

As the chart above shows, the S&P 500 stock index (SPX) closed with a loss of 3.37 percent while the following three stocks closed with more than double that percentage of loss: Deutsche Bank was down by 7.44 percent; JPMorgan shed 7.12 percent while AIG was off by 7.27 percent.

When the Federal Reserve needs to create a hodgepodge of secretive Special Purpose Vehicles (SPVs) and run bailouts of $4 trillion; and the Fed gets language in the newly passed stimulus bill that it can hold its meetings in secret with no minutes provided to the public; and the President of the United States signs the stimulus bill with a signing statement announcing only he will determine what Congress gets to know about where the bailout funds go, you know that something is happening under the surface on Wall Street that is just too repugnant to be reported to the American people.

And when you see three firms like JPMorgan Chase, Deutsche Bank and AIG trading as outliers to their peers, only a fool wouldn’t see them as a potential connection to this need for super secrecy.