JP Morgan Chase, the great US financial empire


While the Federal Reserve (Central Bank) raised the benchmark interest rate again by 0.25% and placed it above 5% against inflation, the First Republic Bank became the fourth bank to go bankrupt in the middle of of a crisis, which, far from over, may worsen in the coming months in the US. 

Now the Central Bank finds itself caught in the web of inflation, the banking crisis and a government in Washington whose economic policies have put the United States (US) in an extremely adverse position.

The impact of interest rate hikes is now much more visible on the economy, and in a way, somewhat frightening. The consequences are already ramifying towards different regions of the planet, as happened in 2008. 

government crises

On the one hand, the internal situation with an intransigent position of President Joe Biden and the extreme left in the face of negotiations with the Republicans to raise the debt ceiling and on the other, the also failed foreign policy with a bogged-down war in Ukraine and paid for by US taxpayers (+150 billion dollars, plus huge spending for partisan purposes in dozens of countries and foreign organizations).

But, in addition, Washington is also dealing with the conflict in Sudan, in Taiwan, and is facing constant threats from North Korea and Iran, together with the worsening of tensions in various regions of the planet that China is taking advantage of to get the best of it.

The Biden government has made it easier for China to be the world’s leading negotiator against the US, which, in the eyes of international public opinion, is the consummate warmonger.

The Joe Biden administration’s confrontation with the fossil fuel industry and the armed conflict in the so-called “breadbasket of the world” intensified problems inside and outside the US, a destabilizing economic and political move similar to the George W. Bush governments. and Barack Hussein Obama.

banking crisis

The US financial authorities took possession of the First Republic Bank on May 1, after the bankruptcy of Silvergate, Silicon Valley and Signature, an unprecedented crisis in US history that the White House played down and considered it over and “controlled”; however, it is already much worse than 2008, when [only Washington Mutual] declared insolvency and was also taken over by JPMorgan Chase.

Several other regional banks are in line for possible bankruptcy.

US regional banks suffered heavy losses on Wall Street May 2, dashing hopes that fixing First Republic Bank’s woes would end the crisis.

Even big banks like Citigroup and Bank of America fell on the stock market, but the biggest losses occurred in the same regional banks that have been under pressure since March due to the loss of deposits. Among them, PacWest Bancorp (-24%), Western Alliance Bancorporation (-16%), Zions Bancorporation (-11%) and KeyCorp (-9%).

On this occasion, and in search of the best profit and power, JPMorgan Chase returned to the charge and stays with the First Republic, becoming a [financial empire], something perhaps unthinkable less than 20 years ago.

For its part, the First Republic, based in the city of San Francisco, became the second largest bank to collapse in US history, after revealing a loss of more than 100,000 million in deposits since the third month of this year. anus.

At the end of March, the First Republic’s assets were $233 billion. Its fall represents the second largest destruction of a financial entity in the US, excluding investment banks such as Lehman Brothers, and after the collapse of Washington Mutual.

The bank failed to come up with a satisfactory bailout plan and its shares continued to plummet; the authorities intervened and solicited offers from potential buyers.

The financial empire

As part of the agreement reached in the early hours of June 1, the California state regulator named the Federal Deposit Insurance Corporation (FDIC) as the receiver of First Republic, which was immediately sold to JPMorgan Chase.


The settlement means that JPMorgan has repossessed all of the First Republic’s deposits and almost all of its assets, according to an FDIC statement.


The federal agency estimates that it will have to pay around $13 billion to cover the First Republic’s losses. That same day, the 84 branches of the bank reopened under the control of JPMorgan Chase, the biggest beneficiary in this crisis and in that of 2008.


“Our government invited us and others to step up, and we did,” Jamie Dimon, JPMorgan’s chief executive, said in a statement.

“Hopefully this will help stabilize everything,” said Dimon, who is now “the emperor” in Washington of the US financial system and the central figure between the banks, the Treasury, the White House and the Federal Reserve.

In the first quarter of 2023, JP Morgan Chase increased its profits by 52% (12.6 billion dollars) compared to the same period of 2022, when dividends also rose significantly compared to the previous year.

The turnover of the largest US bank in volume of assets, which has become the largest financial empire in the US, rose 25%, a record number in the first quarter of the year

“A troubled river” …

In the midst of the storm, America’s big financial institutions are cashing in on the banking crisis and using their political connections to their advantage, particularly JPMorgan Chase and its CEO Jamie Dimon, which many say cements their legacy as The most powerful on Wall Street. Others say he is the “true shadow chairman of the Federal Reserve.”

Dimon directs financial decisions in the US together with Larry Fink, from Black Rock (the largest fund manager in the world with assets of almost 9 trillion dollars), the latter in the background due to interests of the firm itself.

JP Morgan has not only taken large deposits of funds, but retains the majority of clients from established technology companies and from various sectors, as well as companies that have decided to exit small and medium-sized banks or other lenders.

Dimon has personally arranged these “bailouts” with the Treasury Department and the Federal Reserve to calm the markets, when he himself affirms that the crisis continues.

The large funds in which these financial giants invest to a large extent managed in March, in the midst of the crisis, to get hold of a coffer of 7,200 million dollars in bets against bank actions; that is, the crisis is for “those below”, and not for “those above”.

Of that number, $1.3 billion came from bets against Silicon Valley Bank, $848 million against First Republic and another $684 million against Credit Suisess.


Only with these three banks, “those above” “put on their boots” in just two or three weeks. And looking ahead to the coming months, these hedge funds anticipate more turmoil in the banking sector.

In April, the US Federal Reserve also authorized the purchase of Credit Suisse’s US subsidiaries by UBS Group AG, under a bailout plan for the second largest Swiss bank.

The government’s seizure and sale of the First Republic comes two months after the liquidation of Silvergate Bank, a favorite bank among cryptocurrencies, and the rapid demise of Silicon Valley Bank (SVB), after it took a risk excessive interest rate.

To prevent another banking collapse, authorities struck a deal led by JPMorgan Chase bank with 11 major banks in March to provide a $30 billion lifeline to the First Republic, but those funds were totally insufficient to save it.

At the Wall Street close on April 28, First Republic was worth just $654 million compared with more than $20 billion at the start of the year and $40 billion at its peak in November 2021.

At first glance, the First Republic seemed well positioned because it had a wealthy clientele that deposited large sums.

However, the series of bank defaults made customers uneasy, and most of the First Republic’s loans were fixed-rate mortgages, which lost value because of interest rates.

New York-based Signature Bank also closed days after Silicon Valley Bank did.

The Treasury Department, in an effort to allay concerns, offered immediate statements, just as it did when Silicon Valley went bankrupt, now owned by First Citizens BancShares.

“The banking system remains strong and resilient, and Americans should feel confident in the safety of their deposits and in the banking system’s ability to fulfill its essential role of providing credit to businesses and families,” a Treasury spokesman said.


the royal origin

The banking sector crisis broke out after the Federal Reserve took extremely belated aggressive action to counter high inflation. Those moves sent Treasuries revaluing, along with the plunge in the shares of big tech companies on the stock market and their mass layoffs.

But the true origin of the problem has been the economic platform of the Biden administration, with the same agenda as former President Barack Obama and with a greater incidence of plans from the most radical Democratic branch (“progressives”).

The signs of the slowdown in the world’s largest economy are diverse since 2022, including a record trade deficit of 948.1 billion dollars, 11 consecutive months of falling home sales, inflation that reached 9.1 by mid-year %, manufacturing activity in 5 consecutive months of strong contraction and a public debt of more than 31.4 trillion, among other parameters.