So yesterday I emailed you out exposing all the leverage and emotional issues plaguing retail during this last bullrun, but I want to explore that again a bit differently today!
While I was cruising through the cancer which is twitter today I noticed a gem and quickly remembered that we could have a whole conversation around this one topic, so lets do it!
Strong statement, got those WEF vibes to it doesn’t it? The question is though, is that true?
Part of me says yes the American people still have too much leverage right now, that being said its monkey see- monkey do, where you think they got this idea from?
Lol the bankers!
They have seen now time and time again banks using too much leverage and then getting a bailout when they threaten to take down the whole system with their insolvency. There was a large amount of people who took those piddly stimmy checks and deposited that right into their trading account!
Onto the next part of the question, what about the banks- do they have too much leverage?
In short, yes!
The Office of the Comptroller of the Currency (OCC) puts out a quarterly Report on Bank Trading and Derivative Activities. As of Dec 2021 the 25 largest bank holding companies in the U.S. are sitting on $234 trillion notional (face amount) in derivatives but just 5 bank holding companies are responsible for $200.18 trillion of that exposure or 86% of the total. Those mega bank holding companies are:
JPMorgan Chase (ticker JPM)
Citigroup ©
Goldman Sachs (GS)
Morgan Stanley (MS)
Bank of America (BAC)
Here is the data set, look at the Total Derivatives column at the bottom for total.
That is so disgusting its almost laughable. Meanwhile…
Allow me to further connect dots…
These are the same 5 mega banks that were standing in line for both the 09 GFC and the Emergency Repo Operations in 2019 (minus BOA).
What’s even more interesting is that 4 of those 5 banks are the largest shareholders in the NY Fed
JpMorgan Chase
Citigroup
Goldman Sachs
Morgan Stanley
And Bank Of NY Mellon
And those 4 banks also represent about 2/3rds of the 8 global systemically important banks according to the Financial Stability Board which was formed just after the Great financial Crisis of 2009.
Speaking of 09, you know which Fed branch handed out a majority of the $29 trillion in bailouts? NY Fed!
In summary, if you get liquidated because you overleveraged "you’re an idiot who deserved it” and if the banks do the same thing they get a bailout funded by taxpayers! Any questions?
Ok I tell you the truth, you give me money now…
Resources & Tools
Tools and resources to help you better build your Empire! If you want to support me and my work in anyway this is the easiest way to do it.
Nordvpn:
Regardless if you trade crypto or not, you don’t want your regular IP exposed for data providers to sell off to marketing firms and/or further down the road be used against you. Protect your geo-location with at least one layer VPN with Nord. 2yr deal currently 68% off!
Tip me Crypto! Tip me on Cashapp: $JamesonBrandon
sometimes im not sure if I want it these mega banks to fail or not because wouldn't that be just super pain for myself and everyone here at home? if they crash, doesnt that mean $8 big macs and insane levels of hyper-inflation>into depression economy? Then of course, doesnt that lead to some kind of recovery, like a crackhead who got himself into rehab? thanks jay