“It’s Incredible. The Scale Of What JPMorgan Is Doing Is Mind-Boggling”

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05-11-19 09:32:00,

Shortly after our latest discussion how JPM’s drain of liquidity via Money Markets and reserves parked at the Fed may have prompted the September repo crisis and subsequent launch of “Not QE” by the Fed in order to reduce its at risk capital and potentially lower its G-SIB charge – currently the highest of all major US banks – we not only got confirmation that the biggest US bank has been quietly rotating out of cash, but was also busy repositioning its balance sheet in another major way.

According to an overnight report from the FT which confirms what we already disclosed previously, namely that JPMorgan pushed more than $130bn of excess cash away from reserves in the process significantly tightening overall liquidity in the interbank market, the bulk of this money was allocated to long-dated bonds while cutting the amount of loans it holds, in what the FT dubbed was a “major shift in how the largest US bank by assets manages its enormous balance sheet.”

The moves saw the bank’s bond portfolio soar by 50%, and were prompted by capital rules that treat loans as riskier than bonds. And since JPM has been aggressively returning billions of dollars to shareholders in dividends and share buybacks each year, JPMorgan has far less room than most rivals to hold riskier assets, explaining its substantially higher G-SIB surcharge.

An executive at a large institutional investors told the FT that what JPM did “is incredible”, adding that “the scale of what JPMorgan is doing is mind-boggling . . . migrating out of cash into securities while loans are flat.”

The dramatic change, which occurred gradually over the year, and which may have catalyzed the spike in repo rates in September, was first flagged by JPMorgan at an investor event back in February. Then CFO Marianne Lake said that, after years of industry-leading loan growth, “we have to recognize the reality of the capital regime that we live in”.

So what exactly did JPMorgan do?

The biggest US bank by assets shrank its loans portfolio by 4%, or about $40bn, year to date; at the same time as selling off mortgages, the bank has reduced the amount of cash on its balance sheet and used it to buy long-dated bonds.

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The Incredible Shrinking Overton Window

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04-11-19 09:28:00,

“The smart way to keep people passive and obedient is to strictly limit the spectrum of acceptable opinion, but allow very lively debate within that spectrum — even encourage the more critical and dissident views. That gives people the sense that there’s free thinking going on, while all the time the presuppositions of the system are being reinforced by the limits put on the range of the debate.”
~ Noam Chomsky

The plutocrat-owned narrative managers of the political/media class work constantly to shrink the Overton window, the spectrum of debate that is considered socially acceptable. They do this by framing more and more debates in terms of how the oligarchic empire should be sustained and supported, steering them away from debates about whether that empire should be permitted to exist at all.

They get people debating whether there should be some moderate changes made or no meaningful changes at all, rather than the massive, sweeping changes we all know need to be made to the entire system.

They get people debating whether they should elect a crook in a red hat or a crook in a blue hat, rather than whether or not they should be forced to elect crooks.

They get people debating violations of government secrecy laws, not whether the government has any business keeping those secrets from its citizenry in the first place.

They get people debating how internet censorship should take place and whom should be censored, rather than whether any internet censorship should occur.

They get people debating how and to what extent government surveillance should occur, not whether the government has any business spying on its citizens.

They get people debating how subservient and compliant someone needs to be in order to not get shot by a police officer, rather than whether a police officer should be shooting people for those reasons at all.

They get people debating whether or not a group of protesters are sufficiently polite, rather than debating the thing those protesters are demonstrating against.

They get people debating about whether this thing or that thing is a “conspiracy theory”, rather than discussing the known fact that powerful people conspire.

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France: The Incredible Shrinking President

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09-11-18 11:36:00,

I’ve said it before and I’ll say it again: Emmanuel Macron, the current president of the French Republic, is a weird dude. Now, after just 18 months in power, he is also a very unpopular dude. The French media have been making much of the fact that Macron’s prime minister, Édouard Philippe, has been slightly more popular than the president in certain polls. But really, what we are seeing is an almost perfect parallel collapse in popularity of both personalities

That French presidents are unpopular is nothing new. However, there is a secular trend in them getting unpopular more and more quickly upon getting into office. True, Macron is not as unpopular after 18 months as was the hapless and squishy François Hollande, who could deliver on virtually none of his Socialist economic promises. However, Macron as collapsed in popularity more quickly than Nicolas Sarkozy did, who was a one-term president.

The English-speaking Macron said he wanted to turn France into a “start-up nation.” A bold ambition, but it’s worth remembering that 90% of start-ups go bankrupt.

I personally don’t understand the French electorate on these matters. Macron in particular did not promise anything other than to deliver more of the same policies, albeit with more youth and more vigor, as a frank globalist. Who, exactly, was excited at his election but is disappointed now? People with a short attention span or susceptibility to marketing gimmicks, I assume.

It is hard to talk about the French media without getting a bit conspiratorial, at least, I speak of “structural conspiracies.” Macron’s unabashed, “modernizing” globalism certainly corresponds to the id of the French media-corporate elites and to top 20% of the electorate, let us say, the talented fifth. He was able to break through the old French two-party system, annihilating the Socialist Party and sidelining the conservatives. The media certainly helped in this, preferring him to either the conservative François Fillon or the civic nationalist Marine Le Pen.

However, the media have to a certain extent turned on Macron, perhaps because he believes his “complex thoughts” cannot be grasped by journalists with their admittedly limited cognitive abilities.

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